Who's Really Looting The American Treasury Part 3

WASHINGTON (CNN) -- A congressional committee investigating the performance of Blackwater USA questioned whether the private security firm may have evaded paying millions of dollars in taxes.
By classifying workers in Iraq as "independent contractors" rather than employees, Blackwater appears to have engaged in an "illegal tax scheme" that avoided an estimated $31 million in employment-related taxes in the last year of its contract alone, said Rep. Henry Waxman on Monday.

Waxman, chairman of the House Committee on Oversight and Government Reform, also accused the North Carolina-based company of preventing a guard who discovered the practice "from contacting members of Congress or law enforcement officials."

"It is deplorable that a company that depends on federal tax dollars for over 90 percent of its business would even contemplate forbidding an employee to report corporate wrongdoing to Congress and federal law enforcement officials," the California Democrat wrote in a letter to Blackwater founder and CEO Erik Prince.

Blackwater denied the allegations in a s

The man in charge of security for US diplomats in Iraq has resigned after heavy criticism of how foreign private security firms in Iraq are supervised.

US state department official Richard Griffin did not mention the issue in his resignation letter.

But he left just a day after the department moved to strengthen government oversight of the firms.

The changes were prompted by the deaths of Iraqi civilians in an incident involving the Blackwater company.

At present, foreign private security contractors have immunity from prosecution under Iraqi law but the Iraqi government is reportedly preparing a bill to make them accountable locally.

This week's state department report said there have been serious lapses in how the firms are supervised.

It is clear it was September's incident in particular, and the questions it raised in Iraq and the US, which led to Mr Griffin's sudden departure after 36 years in government service, our correspondent says.

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