Tens of thousands of Hurricane Katrina victims remain without homes. The environment is devastated. People are disenfranchised. Financial resources, desperate residents are told, are scarce. But at least New Orleans has a Wal-Mart parking lot serving as a FEMA Disaster Recovery Center with perhaps the tightest security of any parking lot in the world. That's thanks to the more than $30 million Washington has shelled out to the Blackwater USA security firm since its men deployed after Katrina hit. Under contract with the Department of Homeland Security's (DHS) Federal Protective Service, Blackwater's men are ostensibly protecting federal reconstruction projects for FEMA. Documents show that the government paid Blackwater $950 a day for each of its guards in the area. Interviewed by The Nation last September, several of the company's guards stationed in New Orleans said they were being paid $350 a day. That would have left Blackwater with $600 per man, per day to cover lodging, ammo, other overhead--and profits.

Shortly after the hurricane hit, Blackwater "launched a helicopter and crew with no contract, no one paying us, that went down to New Orleans," says company vice chairman Cofer Black. "We saved some 150 people that otherwise wouldn't have been saved. And, as a result of that, we've had a very positive experience." Indeed. It was only days after the company arrived that it started reeling in lucrative deals.

According to Blackwater's government contracts, obtained by The Nation, from September 8 to September 30, 2005, Blackwater was paid $409,000 for providing fourteen guards and four vehicles to "protect the temporary morgue in Baton Rouge, LA." That contract kicked off a hurricane boon for Blackwater. From September to the end of December 2005, the government paid Blackwater at least $33.3 million--well surpassing the amount of Blackwater's contract to guard Ambassador Paul Bremer when he was head of the US occupation of Iraq. And the company has likely raked in much more in the hurricane zone. Exactly how much is unclear, as attempts to get information on Blackwater's current contracts in New Orleans have been unsuccessful.

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While companies like Halliburton may have raked in more profits since George W. Bush took office, few have seen growth as dramatic as Blackwater's. The firm has been at the front of the line at the domestic and international taxpayer-funded feeding troughs and has recently hired some high-profile former government officials, like Cofer Black, former chief of CIA counterterrorism, and former Pentagon Inspector General Joseph Schmitz. In March Black represented Blackwater at a conference in Jordan, announcing that the company was seeking to broaden its role in even more conflict zones. Blackwater is rapidly expanding its operations, creating a new surveillance-blimp division, launching new training facilities in California and the Philippines, and increasingly setting its sights on the lucrative world of DHS contracts. It is clamoring to get into Darfur and has also hired Chilean troops trained under the brutal rule of Augusto Pinochet. "We scour the ends of the earth to find professionals," company president Gary Jackson told the Guardian. "The Chilean commandos are very, very professional, and they fit within the Blackwater system." The business magazine Fast Company recently named Jackson one of its "Fast 50," predicting that the company and its president are in for "a very strong (and long) decade."

It's hard to imagine that the cronyism that has marked the Bush Administration is not at play in Blackwater's success. Blackwater founder Erik Prince shares Bush's fundamentalist Christian views. He comes from a powerful Michigan Republican family and social circle, and his father, Edgar, helped Gary Bauer start the Family Research Council. According to a report prepared for The Nation by the Center for Responsive Politics, in all of Erik Prince's political funding generosity since 1989, he has never given a penny to a Democrat running for national office. Company president Jackson has also given money to Republican candidates. For his part, Joseph Schmitz--the former Pentagon Inspector General turned general counsel to Blackwater's parent, The Prince Group--lists on his résumé membership in the Sovereign Military Order of Malta, a Christian militia formed before the First Crusade. Like Prince, he comes from a right-wing family; his father, former Congressman John Schmitz, was an ultraconservative John Birch Society director who later ran for President. Joseph Schmitz was once in charge of investigating private contractors like Blackwater, but he resigned amid allegations of stonewalling investigations conducted by his department. He now represents one of the most successful of those contractors.

"I like being some place where stupidity can be fatal, because here you work with people who think about their actions," said Rich, who asked for security reasons that only his first name be used. He and his colleagues voice disdain for what they consider the soft, even pampered lives of most Americans in a society he sums up as one that "puts warnings on coffee cups."

Rich is typical of the men drawn to Blackwater USA and scores of other private security firms now doing a booming business in Iraq. They're driven by money and a lust for life on the edge, but also by a self-styled altruism. Sporting blue jeans, wraparound sunglasses and big tattoos, they look the part of gun-slinging cowboys -- but most are experienced enough to know that a hot-dog attitude is the fastest way to get yourself and others killed.

With more hired guns in Iraq than in any other U.S. conflict since the 1991 Persian Gulf War, Rich and other armed contractors also admit their role is cloudy and controversial. They do shoot to kill, but they aren't legally considered combatants. U.S. military officials have expressed concern about violence in which the private contractors open fire. The contractors' mission is to protect the lives of individuals and cargo but not necessarily to support the broader interests of the U.S. counterinsurgency.

The arrogant tactics of the private military company that escorted top US officials around Iraq are partly to blame for the rebellion against the US occupation that has taken scores of American and thousands of Iraqi lives, according to a Marine colonel who helped train Iraqi troops in the initial stage of the war.

"They made enemies everywhere," Colonel Thomas X. Hammes, an expert on guerrilla warfare and a senior fellow at the National Defense University told a conference on military contracting last week. He was referring to the tactics used by Blackwater USA, the North Carolina company that was hired by the Coalition Provisional Authority to provide security for L. Paul Bremer, the US administrator who was dispatched by the Bush administration to run Iraq in 2003.

A few minutes earlier, Chris Taylor, Blackwater's vice president for strategic initiatives, had boasted about the protective cordon his company provided to Bremer. Under a "turnkey security package" with the CPA, Bremer was accompanied by 36 "personnel protection specialists," two K-9 dog teams and three MD-530 helicopters built by Boeing Corporation.

"The fact that he (Bremer) is home with his family is the only measure of success," said Taylor. "He survived and that's good." Blackwater provides the same kind of protection today to US ambassador John Negroponte, who succeeded Bremer when the formal occupation (theoretically) ended on June 30, 2004.

But Hammes, who was in charge of training and equipping the fledgling Iraqi army that Bremer hastily recruited after his disastrous decision to disband the army once loyal to Saddam Hussein, said the Blackwater team acted more like storm troopers.

"The problem is, his guys are trying to protect the ambassador. But I would ride around with Iraqis in an Iraqi truck, and they were running me off the road. We were threatened and intimidated. But they (Blackwater's security) were doing their job, doing what they were paid to do in the way they were paid to do it. And they were making enemies on every single pass out of of town." The "first rule" of an insurgency, said Hammes, is "you don't make any more enemies."And Blackwater clearly failed in that mission.

Hammes told his story to make a point: that there is an an inherent conflict of interest between contractors, who are in Iraq to make money, and the military itself, which is there to attempt to win a war. And because that war has now become a classic guerrilla war, with both sides competing for the "hearts and minds" of the Iraqi people, anything that the United States does to anger and alienate the population becomes a weapon - one that the fighters have managed to exploit (this may explain, in part, the apparent decision by many of the Iraqi fighters not to disrupt the voting yesterday).

In his response to Hammes, Taylor dug himself into a deeper hole. He agreed that "there's an aggressive nature" to Blackwater's tactics in moving US officials from point A to point B. But "you're paying us for our judgement," he said. If someone suggests that these tactics are having "an adverse affect in our operations in Baghdad," Blackwater will take that into consideration. "We'll try to work something out while still being able to provide the service under the contract we've provided." Exactly.

Hammes pushed on. It all "depends on the integrity of the company," he replied. He then offered up a scenario of a situation where a contractor might be called into, say Liberia. "If my job as a contractor is to keep the peace, suppose I'm really successful and there is peace. My contract ends, right? So suppose I stir up a little on the side?"

That was too much for Taylor. "Oh, come on," he responded. But his only assurance that something like that couldn't happen was his company's patriotism. "All of us are absolutely in support of security and peace and freedom and democracy all over the world," he said. "Its from that part of the heart that our people come to work." That's why he "hates the M word." The term mercenary is a "misnomer, inappropriate and certainly inaccurate," he insisted.