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Did an American fire on Iraqis unprovoked?

Despite allegations involving many companies in Iraq, not a single security contractor has yet faced charges for attacking civilians. NBC's Lisa Myers reports on one alleged incident.

Shane Schmidt was a U.S. Marine for seven years, the leader of a sniper unit. Chuck Shepard spent seven years in the U.S. Army. After leaving the military, each found his way into the legions of heavily armed private security contractors working in Iraq.

The two were working together on July 8, 2006, when they claim they witnessed what they believe was a crime. They say another American fired, unprovoked, into two Iraqi civilian vehicles. They say it started during a mission to Baghdad International Airport, when their supervisor, who was leaving Iraq the next day and was in the vehicle with them, made a troubling remark.

"He'd made a comment that he was going to kill somebody today," says Schmidt. "Kill someone."

The two men say they thought he was joking.

They claim the man first fired seven or eight rounds into a white truck positioned about 100 yards behind them.

"He cracked his door," alleges Schmidt, "put a foot out, and fired seven or eight rounds into a parked, white moving truck that was to our rear."

Later on that day, on the next leg of the mission, according to Shepard, the shift leader then said: "I've never shot anybody with my pistol before."

Shepard says the shift leader "immediately turns, opens the door, and fires seven to eight rounds into a taxi cab that we're overtaking, that we're passing."

The men claim the taxi rolled off the road, but that they are not sure if anyone was killed.

"I know that he shot at innocent civilians," says Shepard. "I know that we're trained very well on our marksmanship."

Whistle-blowers fired
But Shepard and Schmidt acknowledge they waited almost two days, by which time their supervisor left Iraq, to report the incidents to their company, Triple Canopy.

The men were fired, along with their supervisor, who has denied wrongdoing, according to the company.

Shepard and Schmidt are now suing Triple Canopy. Their lawsuit alleges they were fired "in retaliation for their reporting criminal activity which they had witnessed."

"I believe we were fired," says Shepard, "because they wanted this whole incident to go away."

Triple Canopy does not deny that shootings occurred, though it says the facts are in dispute, including what provoked the shooting. The company says it has no evidence anyone was hurt. Schmidt also admits that he, too, fired his weapon that day, into the engine block of a vehicle that wouldn't stop. The company insists the two men were fired for a "failure to immediately report" the shootings, not for retaliation.

"They did not follow our policies," says CEO Lee Van Arsdale. "We require immediate notification if there is any weapons incident."

Triple Canopy says all its employees must report shootings immediately, and says that Shepard and Schmidt reported the incident more than 48 hours after it happened, not 30 hours, as the two men claim. The company says it did interview the shift leader.

"He denies that it happened," says Van Arsdale. "They say it did happen. These are, you know, two individuals pointing the finger at him; him pointing the finger at them."

‘Obviously out of control’
NBC News could not reach the shift leader, and a telephone number listed under his name was disconnected.

And the company says it cannot rule out that any civilians were injured, but believes none were.

"I sincerely hope and pray no one was injured," says Van Arsdale. "There are no reports of any injuries.  But for me to sit here, several thousand miles away, and speculate on that, does no good for anyone."

As for Schmidt and Shepard, they say they feared for their jobs, and for their safety.

"This guy was obviously unstable," says Schmidt, "obviously out of control. We honestly felt fear for our lives."

The company says it investigated the shooting, interviewing employees who were involved. Triple Canopy says it filed a report with Kellogg Brown and Root (KBR), the prime contractor for whom it was working. It reported the incident to the U.S. military three days after it was told of the shootings. KBR, a subsidiary of Halliburton, said it would not comment on the issue because of the ongoing litigation.

A U.S. military spokesman in Iraq tells NBC News that, as of now, officials can't find a copy of the company's report and have no details about the shootings.

Shepard and Schmidt say they haven't been contacted.

"There's been no follow-up whatsoever by any government agencies," says Schmidt.

And its not just this incident. Despite similar allegations involving other companies, not a single security contractor in Iraq has yet faced charges for attacking civilians.

As for Triple Canopy, it says this is the first time any such allegation has been made against it, and it says it wants more regulation for the industry.