Currently under appeal. The old employee as independent contractor trick--meaning the co. doesn't withhold taxes (p.s. this is unrelated to the we-are-not-subject-to-any-laws-in-Iraq-trick). The story doesn't mention it, but I know I've read in several places that Blackwater trains its, uh, independent contractors--which sounds a lot like employee to me.
Some journalist who's written a book about Blackwater was on Bill Moyers show last Friday and he was scathing in his criticism of the company.
Blackwater is the poster child, but my concern all along has been the privatization of what seems like a very public function (national security)--which raises a lot of issues, including accountability, and how much it's costing us. Apparently there are over a hundred private security firms operating in Iraq (I believe that's what I heard).