The Game Changer

If the Iraqi government repeals immunity for American contractors, all bets are off.

There are relatively few scenarios that have the potential to dramatically alter the U.S. military's mission in Iraq. Political reconciliation within the Iraqi government obviously would change the dynamics on the ground, as would the election of a Democratic presidential candidate running on a withdrawal platform. But, in recent months, a somewhat more under-the-radar, game-changing option has leapt to the forefront-and it can be tracked directly to the most controversial federal contractor in Iraq.

Shortly after guards for Black-water Worldwide fired into a crowd of civilians in Baghdad's Nisour Square on Sept. 16, killing 17 and injuring two dozen others, the Iraqi government announced it was revoking a four-year-old edict handed down by the Coalition Provisional Authority. Known as Order 17, the rule immunizes employees of foreign contractors from prosecution in Iraqi courts for actions while in duty of their contract.

The Cabinet for Iraqi Prime Minister Nouri al-Maliki voted to repeal the order in late October. The Iraqi Parliament still must ratify the law, which states that foreign security contract workers would be subject to both civil and criminal prosecutions. Most expect it to pass. Nonetheless, there have been whispers in recent weeks that American officials are working to reach a compromise with the Iraqi government that would potentially shield its companies from the brunt of the law. Officials with the Defense and State departments declined to discuss the issue.

While most significant for the armed private security industry, the repeal of Order 17 could create a legal, personnel and insurance nightmare for contractors in Iraq-the ripples of which, experts say, could force some firms to abandon their contracts and pull their employees from the region. And, while it's possible that the U.S. government could then turn to Iraqi contractors to take over the work, it's hard to imagine a circumstance in which Iraqis would be hired to protect U.S. diplomats or feed American troops.

Contractors that choose to stay and roll the dice most likely will raise their premiums to the government dramatically to compensate for the greater legal risk they are assuming, not to mention the companies' expected rise in insurance costs, says Peter Singer, a senior fellow at the Brookings Institution who focuses on national security issues.

"The irony of this all is that we need the Iraqis to start acting like a government if we are ever to get our troops out of there," Singer says. "And part of the process is they get control of the armed actors on the ground. And, as the Iraqis start brandishing their national credentials, they are going to make decisions that we may not always agree with."

Contractors that could find themselves in the legal line of fire insist that their trepidation is with Iraq's still immature judicial system. DynCorp International of Falls Church, Va., which along with Blackwater and Triple Canopy of Herndon, Va., hold the State Department's Worldwide Personal Protective Services contract to guard diplomats and infrastructure throughout Iraq, said the country's courts system fails to meet U.S. standards.

"It would be difficult to recruit people if they could be tried before an Iraqi court," says DynCorp spokesman Greg Lagana. "I can't see us being able to recruit people who might have to make life-and-death decisions if they knew that they could be prosecuted in Iraq in what could be a highly charged atmosphere."

DynCorp was the only U.S. security contractor that agreed to discuss the potential implications of the repeal of Order 17 with Government Executive. In fact, Maggie Botes, general manager of the International Contractors Association, says private security contractors have gone as far as to instruct their employees not to discuss the immunity issue with the media or potentially risk losing their jobs.

But it's not only security employees who run the risk of facing prosecution in an Iraqi court. A logistics contract worker who has a fatal car accident while delivering supplies to a U.S. base also could face legal jeopardy-a perilous prospect that many firms recognize. "We are currently reviewing the matter in an effort to determine what impact, if any, we would experience," says Heather Browne, director of communications for KBR Inc. of Houston, which has about 15,000 employees in Iraq, more than any other U.S. contractor.

Most agree it would be next to impossible at this juncture for a U.S. contract employee to receive a fair trial in Iraq. Not a single American has been tried in an Iraqi court since the U.S. invasion in 2003, even for acts that are not considered part of their contract, such as the 2006 shooting of a guard to the Iraqi vice president, allegedly by a Blackwater employee intoxicated after a nearby holiday party. The Nisour Square shooting has only exacerbated the feeling among many Iraqis that American firms are above the law. Experts suspect that if Order 17 is repealed, then U.S. contractors could be the ones to pay for that discontent.

Laura Dickinson, a University of Connecticut law professor whose expertise includes foreign affairs privatization, says Iraqi courts are not the right venue at this point to prosecute allegedly criminal acts by Americans. "The courts do not have the capacity to address this issue," she says. "We need a more effective accountability framework."

A better option, Dickinson says, would be to prosecute rogue workers in American courts. A bill sponsored by Rep. David Price, D-N.C., that passed the House in October would expand the 2000 Military Extraterritorial Jurisdiction Act to cover contractors operating in Defense Department-designated "contingency areas," regardless of the agency that hired them. The law is designed to hold civilians accompanying the military to war zones accountable for criminal actions.

There could be other options, albeit somewhat improbable, for American companies if Iraqis are insistent on repealing Order 17. Singer suggests that the U.S. military could attempt to insulate Defense contractors under the Status of Forces Agreement, which protects American soldiers from prosecution. There also has been some discussion, Singer says, about applying diplomatic immunity to State Department contract employees assigned to protect diplomats, although such a change could face countless legal and bureaucratic hurdles.

"But no matter what, there won't be a get-out-of-jail free card," he says. "This is a major change in the environment that these firms operate in. There is no doubting that."

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