A report from the State Department’s Inspector General suggests that Blackwater, the private military contractor founded by Michigan’s Erik Prince, may lose its license to operate in Iraq, forcing the State Department to change its plans for protecting diplomats in that country:
 

WASHINGTON – An internal State Department report says Blackwater Worldwide may lose its license to work in Iraq and recommends that the agency prepare alternative means to protect its diplomats there.

The 42-page draft report by the State Department’s Inspector General says the department faces “numerous challenges” in dealing with the security situation in Iraq, including the prospect that Blackwater may be barred from the country. The department would have turn to other security arrangements to replace Blackwater, officials said.

The State Department had no immediate comment on the report itself, but deputy spokesman Robert Wood said that after the probe is done, officials would look at “whether the continued use of Blackwater in Iraq is consistent with the U.S. government’s goals and objectives.”

Blackwater employees are currently facing manslaughter charges stemming from a firefight that left 17 Iraqis dead in September, 2007, and possible federal charges for illegally exporting weapons out of the country.