Blackwater USA denied any involvement in illegal weapons smuggling through Iraq to Kurdish insurgents in Turkey, responding to reports the private security contractor is a target of federal prosecutors.
"Allegations that Blackwater was in any way associated or complicit in unlawful arms activities are baseless," the company said in a statement on Saturday. "The company has no knowledge of any employee improperly exporting weapons."
Officials with knowledge of the case said on Friday that the US Attorney's Office in Raleigh, North Carolina, was handling the investigation with help from Pentagon and State Department auditors. While the officials said the case was in the early stage, they added the auditors have concluded there is enough evidence to file charges.
George Holding, the US attorney for the eastern district of North Carolina, has declined to comment, as have Pentagon and State Department spokesmen.
Officials in Washington said the smuggling investigation grew from internal Pentagon and State Department inquiries into US weapons that had gone missing in Iraq. Turkish authorities protested to the US in July that they had seized US arms from the outlawed Kurdistan Workers Party (PKK) rebels.
The PKK is fighting for an independent Kurdistan and is banned in Turkey, which has a restive Kurdish population and is considered a "foreign terrorist organization" by the US State Department. That designation bars US citizens or those in US jurisdictions from supporting the group in any way.
The officials spoke on condition of anonymity because of the sensitivity of the matter, which has heightened since 11 Iraqis were killed on Sept. 16 in a shooting involving Blackwater contractors protecting a US diplomatic convoy in Baghdad.
Iraq's Interior Ministry said on Saturday it had expanded its investigation into similar incidents involving Blackwater.
Major General Abdul-Karim Khalaf said the company has been implicated in six other incidents over the past seven months, including a Feb. 7 shooting outside Iraqi state television in Baghdad in which three building guards were fatally shot.
Also on Saturday, the News & Observer of Raleigh, citing unidentified sources, reported that federal investigators were looking at whether Blackwater had shipped automatic weapons and military goods to Iraq without a license.
The paper said two former Blackwater employees -- Kenneth Wayne Cashwell of Virginia Beach, Virginia, and William Ellsworth "Max" Grumiaux of Clemmons, North Carolina -- are cooperating with federal investigators.
According to court records, the men pleaded guilty early this year to possession of stolen firearms that had been shipped in interstate or foreign commerce, and aided and abetted another in doing so.
Blackwater said on Saturday the company immediately fired the men after learning they were stealing from the company and invited the US Bureau of Alcohol, Tobacco and Firearms (ATF) to investigate.
The company pointed to news coverage from 2005, in which a spokesman for the ATF's Charlotte office confirmed the company came forward to authorities and asked for help.
The existence of a federal probe into Blackwater came to light last week, after State Department Inspector General Howard Krongard mentioned it while denying that he had improperly blocked fraud and corruption probes in Afghanistan and Iraq.
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