U.S. prosecutors target six Blackwater staff: report

WASHINGTON (Reuters) - U.S. prosecutors have sent letters to six Blackwater security guards involved in a Baghdad shooting last year in a move that could lead to groundbreaking criminal indictments, The Washington Post reported on Sunday.

Bodyguards from U.S. security firm Blackwater Worldwide opened fire in a traffic jam last September, killing 17 Iraqi civilians while escorting a convoy of U.S. diplomats through the capital under a contract with the State Department.

The incident enraged the Iraqi government, which called it a "massacre" and demanded the right to try the guards in Iraq. Iraqis were further upset in April when the State Department renewed Blackwater's contract to protect its embassy staff.

The question of where and how the contractors can be tried has yet to be publicly resolved, and the incident set off debate in Washington on the use of contractors in war.

The Post, citing three sources close to the case, said prosecutors are still considering evidence after a 10-month FBI investigation of the shooting. The sources said any charges against Blackwater employees probably would come under the Military Extraterritorial Jurisdiction Act.

That law has been used to prosecute civilian contractors for crimes committed while accompanying U.S. armed forces, but some legal experts question whether it can be used to prosecute State Department contractors operating separately from the military.

Iraqi government spokesman Ali al-Dabbagh told a news conference on Sunday: "The Iraqi government stresses that Blackwater has committed a crime and the Iraqi government retains the right to prosecute the company".

He said U.S. civilian contractors would not be granted immunity from Iraqi law after the end of this year, when a United Nations mandate for the U.S. force in Iraq is replaced by a new bilateral deal Washington is negotiating with Baghdad.

The guards from the North Carolina-based private security firm say they acted lawfully and fired in self-defense, but an Iraqi government investigation said there was no provocation.

The Post said the "target letters" sent to the Blackwater employees offer them a chance to contest evidence and present their own version of the incident. Such letters often are a step taken before indictments are issued.

The Post sources, who requested anonymity because of the sensitive nature of the case, said a final decision on indictments might not be made until October.

(Additional reporting by Khalid al-Ansary in Baghdad)

(Writing by Bill Trott; Editing by Catherine Evans)