Blackwater manager told US investigator 'I could kill you'

Documents published today suggest that a private security contractor with a $1bn contract to protect American diplomats in Iraq was out of control – and under investigation by the US government – before the notorious Nisour Square shootings.

Blackwater Security Consulting, now renamed and reconstituted, gained notoriety after the disputed incident on 16 September 2007 when its personnel, trying to clear the way for a US convoy, shot at Iraqi civilians, killing 17 and injuring 20.

Now, the New York Times reports, documents released during unrelated legal action show that the firm had already been investigated by the State Department – and that a senior Blackwater manager had allegedly threated to kill a State Department official.

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The report concluded that Blackwater staff had come to believe they were "above the law". Investigators warned: "The management structures in place to manage and monitor our contracts in Iraq have become subservient to the contractors themselves. The contractors, instead of Department officials, are in command and in control."

The investigation found that Blackwater staff were drinking heavily and "partying" with frequent female visitors. Some had taken to storing automatic weapons and ammunition in their private rooms, says The Times.

"Hands off" management was blamed for "an environment full of liability and negligence". There were concerns support staff who were neither Iraqi nor American were being mistreated.

The main investigator, Jean C Richter, wrote his report after leaving Baghdad abruptly because of an interview with Blackwater's senior manager in Iraq, Daniel Carroll, in which Carroll said he could kill Richter with impunity.

Richter wrote: "[Carroll said] that he could kill me at that very moment and no one could or would do anything about it as we were in Iraq. Mr Carroll's statement was made in a low, even tone of voice, his head was slightly lowered; his eyes were fixed on mine. I took Mr Carroll's threat seriously.

"We were in a combat zone where things can happen quite unexpectedly, especially when issues involve potentially negative impacts on a lucrative security contract."

A second official working with Richter, Donald Thomas Jr, corroborated the story. The Times says Richter and Thomas went immediately to the US embassy but were "shocked" to find officials there sided with Blackwater rather than the State Department and ordered the two men to leave Iraq immediately.

An embassy security officer wrote that Richter and Thomas had become "unsustainably disruptive to day-to-day operations and created an unnecessarily hostile environment for a number of contract personnel".

The email was dated 23 August 2007; the Nisour Square shootings took place on 16 September of that year.