The colonel was furious. "Can you believe it? They actually drew their weapons on U.S. soldiers." He was describing a 2006 car accident, in which an SUV full of Blackwater operatives had crashed into a U.S. Army Humvee on a street in Baghdad's Green Zone. The colonel, who was involved in a follow-up investigation and spoke on the condition he not be named, said the Blackwater guards disarmed the U.S. Army soldiers and made them lie on the ground at gunpoint until they could disentangle the SUV. His account was confirmed by the head of another private security company. Asked to address this and other allegations in this story, Blackwater spokesperson Anne Tyrrell said, "This type of gossip has led to many soap operas in the press."

Prince said that the employee, later identified as Andrew Moonen, had been fined and fired. But on Friday House Oversight Committee chairman Rep. Henry Waxman released a letter to Secretary of State Condoleezza Rice recounting evidence that Moonen was able to return to Iraq and worked there for another company. Moonen's attorney, Stewart Riley, told NEWSWEEK his client denies wrongdoing and is not facing criminal charges. Blackwater is no doubt in for further fire fights.