The United States Army has confirmed that private security guards of the North Carolina security services company Blackwater USA were employed in Iraq by military subcontractors, reversing earlier statements in which army officials denied knowledge of the contracts. 
Four security guards employed by Blackwater were killed by Iraqi militants in March 2004. Their families have sued the company, claiming the suit was the only way to disclose the events surrounding the deaths.
Locating the contract awarded to Blackwater has proved difficult -- the Pentagon has denied repeatedly that such a contract exists. The contract was extremely deeply nested beneath other contracts, obscuring its existence: KBR, a Halliburton subsidiary, has subcontracted to ESS Support Services Worldwide, which provides dining services. ESS hired Blackwater, but only indirectly, through a third company.
This was confirmed yesterday by Army secretary Francis Harvey, in a letter to Representatives Henry Waxman and Chris Val Hollen. This reverses earlier statements by Harvey, for example, in July he stated that KBR "has queried ESS and they are unaware of any services under the ... contract that were provided by Blackwater USA."
Van Hollen said, "This ongoing episode demonstrates the Pentagon's complete failure to safeguard taxpayer dollars."
The House Oversight and Government Reform Committee has scheduled a hearing on the Blackwater contract, to take place next Wednesday. 

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US army admits to private security contract in Iraq