U.S. Still Using Security Firm It Broke With

WASHINGTON — Despite publicly breaking with an American private security company in Iraq, the State Department continues to award the company, formerly known as Blackwater, more than $400 million in contracts to fly its diplomats around Iraq, guard them in Afghanistan, and train security forces in antiterrorism tactics at its remote camp in North Carolina.

The contracts, one of which runs until 2011, illustrate the extent to which the United States government remains reliant on private contractors like Blackwater, now known as Xe (pronounced zee) Services, to conduct some of its most sensitive operations and protect some of its most vital assets.

Disclosures that the Central Intelligence Agency had used the company, which most people still call Blackwater, to help with a covert program to assassinate leaders of Al Qaeda have touched off a storm in Washington, with lawmakers demanding to know why this kind of work is being outsourced. New details about Xe’s involvement in the covert program emerged Friday.

The C.I.A. and the State Department are both trying to reduce their dependence on outside contractors, but the administration is also struggling to deal with an overstretched military and spy service.

In the case of the C.I.A., outsiders still help carry out some of its most important jobs, including collecting intelligence in foreign countries, dealing with foreign agents, and taking part in covert programs.

The State Department continues to use Blackwater guards in Afghanistan, despite the company’s involvement in civilian shootings in Baghdad in 2007, and despite Secretary of State Hillary Rodham Clinton’s pledge to “reduce our dependence on private security contractors.”

The department declined to discuss its ties with Blackwater publicly, but a senior department official said it would be costly for the government to terminate, without cause, the other contracts that are in place. A spokeswoman for Xe Services did not respond to messages requesting comment.

Following the shootings in Baghdad, which killed 17 Iraqi civilians, the State Department required Blackwater contractors to undergo training in “Afghan cultural awareness,” said this official, who spoke on condition of anonymity because he was not authorized to speak publicly.

When the department announced it would not renew the company’s security contract in Iraq, it cited the refusal of the Iraqi government to issue a license for the company to operate in the country. But Xe has continued to supply aviation services to diplomats in Iraq under a two-year contract worth $217 million. That contract expires Sept. 3, and a spokesman for the State Department, Ian C. Kelly, said the work would be given to another security and logistics company, DynCorp International.

Xe’s contract to supply personal security to American diplomats in Afghanistan, which began in 2006 and runs through 2011, is worth $210 million. Xe earns $6 million under a three-year contract to train foreign security guards in antiterrorism tactics.

This web of ties is drawing the attention and anger of lawmakers, including Senator John F. Kerry, the Massachusetts Democrat who is chairman of the Senate Foreign Relations Committee.

On Friday, Mr. Kerry wrote to the founder and chairman of Xe, Erik D. Prince, asking for details of his company’s dealings with the C.I.A. In the letter, a copy of which was supplied to The New York Times, Mr. Kerry expressed concern that contractors could have used their State Department assignments as a “cover to gather information for the targeted killing program.” Leon E. Panetta, the C.I.A.’s director, canceled the program this year, in part because he learned the C.I.A. had used an outside company for the program, government officials who spoke on the condition of anonymity have said.

This week, government officials and current and former Blackwater employees said the company had also taken on a role in the United States’ most important counterterrorism program: the use of remotely piloted drones to kill Al Qaeda leaders.

Mr. Kerry also plans to write to Mrs. Clinton to raise his concerns, said one of his aides.

In a meeting with department employees in February, Mrs. Clinton said, “I certainly am of the mind that we should, insofar as possible, reduce our dependence.” But she added, “Whether we can go all the way to banning, under current circumstances, seems unlikely.”

The decision to use Blackwater contractors in the assassination program starting in 2004 was born partly out of desperation, said former C.I.A. officials: the spy agency had tried to operate the program in house, and had failed. The agency was still reeling from the botched assessments about Iraq’s weapons programs, said the officials who spoke on the condition of anonymity, and was desperate for information about Al Qaeda’s top leaders.

“You want to have everything when you know nothing,” said one former official familiar with details of the canceled program.

Top C.I.A. officials — including Jose A. Rodriquez Jr., the head of the agency’s clandestine service — found outside help.

Mr. Rodriguez had close connections to Enrique Prado, a career C.I.A. operations officer who had recently left the agency to become a senior executive at Blackwater. Both Mr. Prado and Mr. Prince signed agreements with the C.I.A. to participate in the program, officials said.

Over time, the officials said, Mr. Rodriguez and other senior members of the clandestine service gave up on the Blackwater arrangement to hunt Qaeda leaders. By then, the spy agency was starting to have regular success killing top militants in Pakistan and Afghanistan with drones, and the assassination program had yielded no successes. Robert S. Bennett, a lawyer for Mr. Rodriguez, declined to comment.

Government officials said that about $10 million was spent over the seven years of the assassination program. Experts who study government outsourcing point out that even a few million dollars is a significant sum when spent for training in a program that ultimately achieved nothing. "That’s a very expensive laser tag exercise or paint-ball war in the yard,” said Scott Amey, general counsel for the Project on Government Oversight.

Government officials have estimated that about 25 percent of the intelligence workforce consists of contractors, and as much as 70 percent of the entire intelligence budget goes to outside contracts. Yet these are rough estimates, and members of Congressional oversight committees lament that they cannot get reliable figures about the extent of intelligence outsourcing.

“Without even that basic information, you can’t render judgment about the risks associated with their growing role” in spy agencies, said Steven Aftergood of the Federation of American Scientists, an expert on intelligence contracting.

By MARK LANDLER and MARK MAZZETTI