Contracting giant Blackwater has confirmed the existence of multiple federal investigations into its work in shipping weapons to Iraq, reports Congress Daily.

The North Carolina company is facing separate investigations by a grand jury in the state, and by the State Department.

But in a statement, it took issue with some details from news reports last week. "The investigations ... do not allege that the company failed to obtain licenses or failed to ensure the government was aware of its actions," it said.

Rather, it said, "[t]he investigations concern Blackwater's not properly annotating the licenses, not timely submitting required reports, and not retaining required records."

Still, it essentially admitted the most eyebrow-raising charge -- that it had shipped weapons inside sacks of dog food -- saying that this was done to prevent theft.

Separately, federal prosecutors have drafted an indictment against Blackwater guards in connection with the deadly shooting of 17 Baghdad civilians last year, though no decisions on charges have been made.

Yesterday, we noted that the State Department plans to fine Blackwater USA for illegally shipping weapons to Iraq without the proper permits.

Now, ABCNews.com adds some more detail to the picture, reporting that a federal grand jury is probing whether the company used sacks of dog food to hide weapons and silencers it was shipping into Iraq.

State Department rules forbid Blackwater from using "offensive" weapons, including silencers, which, an expert tells ABCNews.com, would only be used for assassinations.

The report adds:

Larger items, including M-4 assualt weapons, were secreted on shipping pallets surrounded by stacks of dog food bags, the former employees said. The entire pallet would be wrapped in cellophane shrink wrap, the former employees said, making it less likely US customs inspectors would look too closely.

Earlier today, the Associated Press reported that an indictment had been drafted in connection to the deadly shootings of 17 Iraqi civilians last year, in which 6 Blackwater guards have been implicated. No decision has yet been made to file charges.

Federal prosecutors have drafted an indictment against 6 guards working for Blackwater USA, who were involved in deadly shootings last year of 17 Baghdad civilians, according to the Associated Press.

But it's not yet certain that charges will be filed. AP reports:

The draft is being reviewed by senior Justice Department officials but no charging decisions have been made. A decision is not expected until at least later this month, people close to the case said.

The shootings by Blackwater guards, which witnesses described as an unprovoked attack, took place at a busy Baghdad intersection in September of last year.

Earlier this week, the company was fined by the State Department for shipping automatic weapons to Iraq without permits.

Blackwater USA, the State Department's largest personal security contractor in Iraq, is set to be hit with a multi-million dollar fine for shipping automatic weapons to that country without the necessary permits, reports McClatchy. Some of the weapons are believed to have ended up on Iraq's black market.

The State Department has been looking into whether Blackwater employees shipped weapons hidden in shrink-wrapped pallets from the companies headquarters in North Carolina to Iraq. No criminal charges have been filed in the case.

But according to one official, the department found that Blackwater shipped 900 weapons to Iraq without the paperwork required by arms export control regulations.

Since the weapons case became public in September 2007, Blackwater has received $1.2 billion in federal contracts, by one estimate.

The company is also being investigated by the Justice Department in connection with the killing last year of 17 Iraqi civilians.

The Justice Department appears one step closer to prosecution of Blackwater security guards involved in the Nisoor square shooting of 17 Iraqi civilians, after reportedly sending six employees target letters earlier this summer. The high likelihood of indictment of a few "bad apple" Blackwater security guards, rather than the company itself, has been expected since early May.

From the Washington Post:

Anne E. Tyrell, a spokeswoman for North Carolina-based Blackwater, said that the company believes the guards fired their weapons "in response to a hostile threat" and is monitoring the investigation closely.

"If it is determined that an individual acted improperly, Blackwater would support holding that person accountable," Tyrell said in a statement. "But at this stage, without being able to review evidence collected in an ongoing investigation, we will not prejudge the actions of any individual. The company is cooperating fully with ongoing investigations and believes that accountability is important."

Blackwater has maintained that its men acted in self-defense, though an Iraqi investigation found that the guards had been unprovoked.

Private military contractor Blackwater and its affiliates may have wrongly received more than $100 million in contracts that were supposed to be set aside for small businesses, according to an inspector general's report released today.

At issue was a November 2006 determination by the Small Business Administration that a Blackwater affiliate, Presidential Airways, was a small business with less than 1,500 employees.

Blackwater contended, and the agency agreed, that its more than 1,000 workers providing security for the State Department overseas were not employees, but independent contractors. That made the company appear smaller on paper than it actually is.

The SBA Inspector General said that assessment was incorrect, based on SBA regulations.

How the agency made that determination regarding Blackwater is unclear, the report concluded.

"We're not sure how that happened," Glenn Harris, chief counsel for the SBA inspector general's office, said in an interview with TPMmuckraker. "We're not saying there was misrepresentation. ... It could be contracting-officer error."

Although Blackwater did provide some information indicating the size of the company, the SBA appears to have overlooked evidence that the company was too large to qualify as a small business.

SBA did not follow-up on or attempt to reconcile conflicting information in its files that the total number of Blackwater employees -- even excluding the security personnel hired under Federal contracts -- exceeded the applicable size standard.

The SBA IG forwarded its report to the Department of Defense and the Department of Veterans Affairs, which together awarded Blackwater some 39 contracts that were set aside for small business. SBA only accesses whether a company is eligible for small-business contracts.

Rep. Henry Waxman (D-CA), chairman of the House oversight committee, questioned Blackwater's conduct.

"The SBA IG report raises serious concerns about whet her Blackwater made false statements about its small business status to the federal agencies that awarded these contracts," wrote in a memo to his committee today.

A spokeswoman for Blackwater denied any wrongdoing by the company.

"Over the past several years, expert accounting and outside legal counsel have determined that Blackwater's classification of security personnel as independent contractors is reasonable, correct and legally protected," said Anne Tyrell, the spokeswoman.

She said the IG's report "draws no conclusions" and was "unnecessarily speculative."

The Small Business Administration did not respond to a request for comment.

Late Update: The SBA issued a statement noting that the the IG report questions its reasoning in the size determination but did not declare it incorrect.

The lack of clarity, the report says, depends on various interpretations of whether nearly 1,000 security personnel hired for a Department of State contract were employees and should have been counted against the 1,500-employee limit, or whether they were contractors and should not have been counted.

"As a legal matter, some factors suggested Blackwater's security personnel were employees; other factors suggested they were independent contractors. The company also represented that those staff were considered independent contractors for IRS purposes," the statement said.

From the AP:

Federal agents raided Blackwater Worldwide this week as part of an investigation into a deal that allowed a local sheriff's office to store high-powered assault rifles at the company's armory in Moyock.

Blackwater spokeswoman Anne Tyrrell said Thursday that investigators with the Bureau of Alcohol, Tobacco, Firearms and Explosives searched Blackwater's armory Tuesday as part of the investigation. She said she did not know whether the weapons in question were seized.

Late Update: The Raleigh News & Observer reports:

Agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives have confiscated nearly two dozen automatic rifles from Blackwater Worldwide, the private security contractor and firearms training company in Moyock, N.C.

The move came two days after a story in The News & Observer raised questions about the legality of Blackwater's deals to buy the guns for the Camden County Sheriff's Department. The security firm kept the rifles at its giant firearms training facility and used them in training law enforcement officers and members of the military.
...
Company spokeswoman Anne Tyrrell said ATF agents came to Blackwater Tuesday and took all the rifles there owned by Camden.

"It was not a raid," she said. "We were cooperative."

In what looks like a "straw deal," Blackwater financed the purchase of 17 AK-47 rifles and 17 Bushmaster XM15 E2S rifles for the sheriff in the country where the company's headquarters is located and gave the sheriff "unlimited access to those rifles for training and qualification, and state of emergency use" -- but stored the weapons in Blackwater's own armory.

What could a sleepy North Carolina town, with a population under 10,000, need with a cache of 34 automatic weapons for its 19 deputies?

Sheriff Tony Perry says it's because the country was setting up a SWAT team at the time of the deal.

But according to the Raleigh News Observer, this excuse falls short:

The AK-47 would be a poor choice of weapon for a SWAT team, said John Gnagey, executive director of the National Tactical Officers Association, the national organization of SWAT officers.

As a combat weapon, the AK-47 is too large and powerful for SWAT teams, Gnagey said. It is rugged but relatively inaccurate.

"And there's the perception problem," Gnagey said. "Every terrorist attacking the U.S. is armed with AK-47s."

Most SWAT teams use the H&K MP5 submachine gun or the Bushmaster M4, he said.

Under federal law, private entities are not allowed to buy or keep automatic weapons, and it is illegal for anyone to receive or possess an automatic weapon that isn't registered to that person. According the the New Observer, all 34 automatic weapons are registered to the sheriff's office, and the AK-47s and five Bushmasters are stored at Blackwater. Twelve of the Bushmasters are currently assigned to Camden deputies.

Blackwater CEO Gary Jackson, denied breaking any federal law:

Jackson and Erik Prince, Blackwater's owner, said Blackwater used the AK-47s in training to familiarize police officers or members of the military with a foreign weapon that they might come across while making an arrest or on a battlefield.

It is not clear how this applies to the Camden police force, who have only seen two murders, three robberies, and seven reported rapes, in the last decade.