Image: Gary Jackson
Gerry Broome  /  AP file
In this July 21, 2008, file photo Gary Jackson, then-President of Blackwater Worldwide, is seen at Blackwater's offices in Moyock, N.C.
updated 3/23/2010 4:31:16 AM ET 2010-03-23T08:31:16

Federal prosecutors are considering filing weapons charges against former top officials of the Blackwater Worldwide private security company on allegations that they illegally stockpiled automatic rifles at its headquarters, The Associated Press has learned.

Senior Justice Department officials are reviewing a draft indictment against former president Gary Jackson, former Blackwater lawyer Andrew Howell, and a third man who used to work at the firm's armory, people close to the case told The AP. A decision is not expected until at least next month.

Any indictment, even of former executives, would be unwelcome news at a company beleaguered since a 2007 shooting involving Blackwater guards in Baghdad left 17 people dead. Under a new name, Xe, the firm is trying to win Defense Department approval to train police in Afghanistan. The contract could be worth up to $1 billion but has drawn the ire of some U.S. lawmakers.

The potential charges stem from a raid conducted by federal agents in 2008 that seized 22 weapons, among them 17 AK-47s.

False justification for guns?
Multiple law enforcement officials familiar with the case said investigators are trying to determine whether Blackwater obtained the official letterhead of a local sheriff to create a false justification for buying the guns. The officials spoke on condition of anonymity because they were not authorized to discuss the investigation.

Federal law prohibits private parties from buying fully automatic weapons registered after 1986, but does allow law enforcement agencies to have them.

Xe spokesman Mark Corallo said the company has "fully cooperated with this investigation, and we will have no further comment."

Jackson said during a brief phone conversation Monday that he would not be able to talk about federal charges and did not know anything about any that might be looming.

"I haven't heard a single, solitary word," Jackson said before abruptly ending the phone call. Attempts to reach Howell for comment Monday were not successful.

In a 2008 interview with The Associated Press, Jackson and other Blackwater executives said the company provided the local Camden County Sheriff's Office a place to store weapons, calling the gesture a "professional courtesy."

"We gave them a big safe so that they can store their own guns," Jackson said at the time.

Raid played down
Company officials, including both Jackson and Howell, played down the importance of the raid during the interview. Jackson said some of the 16 uniformed officers who came to serve the warrant were embarrassed by the event, and agents had to stop at Blackwater's front gate to get passes to come onto the company's sprawling campus in northeastern North Carolina.

"As a hypothetical, one would think that, if you were going on a raid, you'd take your Kevlar and your weapon," Howell said to laughter from other executives.

Blackwater, headquartered in North Carolina, changed its name to Xe Services after its security guards were accused of killing unarmed Iraqi civilians more than two years ago. Those charges were later thrown out of court after a judge found prosecutors mishandled evidence.

In the 2008 North Carolina raid, agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives searched the armory and seized 22 guns from a vault dedicated to county authorities.

The company signed agreements in 2005 in which Blackwater financed the purchase of 34 automatic weapons for the Camden County Sheriff's Office. Sheriff Tony Perry became the official owner of the weapons, but Blackwater was allowed to keep most of the guns at its armory.

One of the 2005 agreements viewed later by The Associated Press says the weapons would be kept under lock and key and does not describe whether Blackwater would use the guns.

At the time of the raid, Blackwater said federal authorities had known about the weapons for years, and investigators got a complete look at the company's cache in 2005 after two employees were fired.

The company also said it was not unusual to store automatic weapons because the company is licensed to sell, provide training on, or even manufacture firearms.

The 2005 agreements give the sheriff's office unlimited access to the weapons, including 17 Romanian-made AK-47s. Perry said at the time that his department used the AK-47s only in shooting practice at Blackwater and that none of his 19 deputies were qualified to use them.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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