Iraqi interior minister Jawad al-Bolani has ordered the cancellation of private security firm Blackwater’s operating license in Iraq, after the group was involved in a shoot-out that killed eight people in Baghdad while providing security for U.S. diplomatic convoy. The group is now prohibited from operating anywhere in the country. Anyway, I’m very familiar with Blackwater, for some background on the company and private security contractors in Iraq you can go here. I’ll be interested to see how this plays out — Blackwater has very deep pockets and is quite resourceful; no doubt they’ve been planning for such a contingency.

The conduct of private security firms such as Blackwater have been under intense scrutiny for some time now, and it’s hard to tell whether this is a legitimate response to overly aggressive contractors or this is simply a way for the Iraqi government to weaken the U.S. presence in the country. Some 20,000 private security contractors are operating in Iraq. Last I checked, that was three times the number of British soldiers in the country, though the ratio is probably even higher now. If the Iraqi government starts going after security contractors it could significantly hamper U.S. operations as the U.S. has become perhaps overly dependent on them for basic operations such as transportation security. Of course, this is exactly the kind of scenario that will prompt analysts opposed to the continued privatization and downsizing of the military to say “I told you so.”