private security firms sometimes created ill will among Iraqis and Blackwater in particular was criticized, even by some in the U.S. military, for its allegedly reckless use of deadly force.

Erik Prince, Blackwater's founder and former CEO, dismissed such allegations as "baseless" after his company was criticized by the Iraqi government for an incident in which its guards killed 17 Iraqi civilians and wounded others while protecting a U.S. State Department convoy in Baghdad on September 16, 2007.

"To the extent there was the loss of innocent life, let me be clear that I consider that tragic," Prince said, adding that the Blackwater team "acted appropriately while operating in a very complex war zone" that day.

Five ex-Blackwater security guards pleaded not guilty in January to charges of voluntary manslaughter stemmingfrom their involvement in the shootings. A sixth pleaded guilty to voluntary and attempted manslaughter.

That same month, the Iraqi government refused to grant the firm an operating license, and the U.S. State Department announced that it will not renew its contract.

In the two months since the exit of the Bush administration, Prince has stepped down as CEO and brought in a new leadership team. The company has changed its name to Xe, but Prince is still chairman.

"I think Blackwater's been punished enough," Zovko said, "but they will be punished more. It's time our government makes some rules and regulations about what civilian contractors can do in their wars."

This week, Xe released a brief statement to CNN about the Falluja killings, saying the "sacrifices of these brave men have