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.

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.

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.