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Blackwater denies role in weapons smuggling

Blackwater USA denied Saturday any involvement in illegal weapons smuggling, responding to reports the private security contractor is a target of federal prosecutors.

"Allegations that Blackwater was in any way associated or complicit in unlawful arms activities are baseless," the company said in a statement. "The company has no knowledge of any employee improperly exporting weapons."

Officials with knowledge of the case told the Associated Press on Friday that the U.S. Attorney's Office in Raleigh, N.C., is handling the investigation with help from Pentagon and State Department auditors.

Also Saturday, the News & Observer of Raleigh, citing unidentified sources, reported that federal investigators were looking at whether Blackwater had shipped unlicensed automatic weapons and military goods to Iraq without a license.

The paper said two former Blackwater employees, Kenneth Wayne Cashwell of Virginia Beach, Va., and William Ellsworth "Max" Grumiaux of Clemmons, N.C., are cooperating with federal investigators. Court records show the men pleaded guilty in early 2007 to possession of stolen firearms that had been shipped in interstate or foreign commerce, and aided and abetted another in doing so.

Blackwater said Saturday the company immediately fired the men after learning they were stealing from the company and invited the federal Bureau of Alcohol, Tobacco and Firearms to investigate. The company pointed to news coverage from 2005, in which a spokesman for the ATF's Charlotte office confirmed the company came forward to authorities and asked for help.

[Last modified September 23, 2007, 01:32:54]