US:Blackwater, a private security firm that protects United States diplomats in Iraq, has come under heavy criticism from a congressional committee following a report that the company's personnel have been involved in almost 200 shooting incidents since 2005.
House Oversight Committee chairman Henry Waxman pointed out that each Blackwater employee costs the taxpayer six times as much as an equivalent US soldier and questioned the rationale behind outsourcing security in Iraq.
"If Blackwater and other companies are really providing better service at lower cost, the experiment of privatising is working. But if the costs are higher and performance is worse, then I don't understand why we are doing this. It makes no sense to pay more for less," he said.
Blackwater founder and chairman Erik Prince defended his staff, telling congressmen that 30 Blackwater personnel had been killed in Iraq but no American under their protection had been hurt. He rejected claims that his staff had behaved recklessly, despite documented incidents of Blackwater personnel killing innocent Iraqis.
"I believe we acted appropriately at all times," he said.
The FBI is investigating a shooting incident in Iraq involving Blackwater staff on September 16th which left 11 Iraqis dead, although the committee agreed not to discuss that shooting while the investigation continues.
Committee members did question Mr Prince on other controversial incidents, however, including the killing of one of Iraqi vice-president Adil Abd-al-Mahdi's guards by a drunken Blackwater employee on Christmas Eve 2006.
Within 36 hours, Blackwater fired the man and arranged with the state department to fly him back to the US to avoid prosecution in Iraq. The acting US ambassador suggested that Blackwater apologise for the shooting and pay the dead man's family $250,000.
In the end, the company paid the family $15,000 after an embassy diplomatic security official complained that the "crazy sums" proposed by the ambassador could encourage Iraqis to try to "get killed by our guys to financially guarantee their family's future".
Mr Waxman said the handling of the incident raised questions about the state department's "enabling" relationship with Blackwater, which has earned more than $1 billion from US government contracts since 2001.
"This didn't happen out on a mission protecting diplomats - it occurred inside the protected Green Zone. If this had happened in the United States, the contractor would have been arrested and a criminal investigation launched. If a drunken US soldier had killed an Iraqi guard, the soldier would face a court martial," he said.
Mr Prince said he would be happy to see the former employee face prosecution in the US but he insisted that, by firing and fining the man, Blackwater had done all it could to respond to the incident. "But we as a private organisation can't do anything more. We can't flog him, we can't incarcerate him," he said.
A former navy Seal who founded Blackwater in 1997, Mr Prince is the son of a prominent contributor to conservative causes who has himself given more than $160,000 to the republican National Committee and the National Republican Congressional Committee. His sister is a Michigan Republican party former chairwoman, who raised more than $100,000 for George Bush's 2004 election campaign.
As a private company, Blackwater does not publish detailed financial information but Mr Prince said its profit margin is about 10 per cent, netting the company about $100 million in profits from government contracts since 2001.
Democrats pressed Mr Prince on why Blackwater charges the US government $1,222 per day - the equivalent of $455,000 per year - for the services of a private military contractor, whose job would otherwise be done by an army sergeant. The annual salary, housing and subsistence pay of a US army sergeant ranges from $51,100 to $69,350, depending on rank and years of service.
Mr Prince said the fees Blackwater charges include the cost of training and equipping its staff.
Democrats on the committee pointed out that most Blackwater staff are former US military personnel who have already received years of expensive training at the taxpayer's expense. Defence secretary Robert Gates complained recently that the huge salaries offered by firms such as Blackwater were luring highly-trained US soldiers out of the service.