Top executives at Blackwater secretly approved $1 million for Iraqi officials to keep quiet after the company's security guards killed 17 Iraqi civilians in September 2007, The New York Times reports.
The Times, citing unnamed former company officials, reports the cash payments were approved in December 2007 by then-company president Gary Jackson, though it wasn't clear whether the money ever was given to Iraqi officials.
The report comes as a settlement in a civil suit against the government contractor apparently has fallen apart after a plaintiff's lawyer said a faulty translation prompted the decision to settle. But lawyers for the company argue that a deal's a deal.
The September 2007 shootings are part of the allegations in the civil suit where five Blackwater security guards are facing criminal charges.
Dozens of Iraqis, including the estates of victims allegedly killed by Blackwater employees, sued the North Carolina-based company earlier this year, alleging that Blackwater employees engaged in indiscriminate killings and beatings.
The two sides reached a settlement late last week, and the plaintiffs filed papers to dismiss the case. Terms were not disclosed, though one document states each side will pay its own attorneys' fees.
But the plaintiffs' lawyer, Susan Burke, said Tuesday that the decision to settle was based on a conversation with clients that was mistranslated. She wants to have the lawsuit reinstated.
Lawyers for the company, now known as Xe, say a deal's a deal and they want the settlement to stand.
Last month, a federal judge tossed out the plaintiffs' complaint, saying he would only allow the case to be refiled if they believed they could prove that Blackwater employees intentionally killed and beat innocent Iraqis. He said that allegations of acting recklessly or fostering a culture of lawlessness were insufficient to sustain a case under the relevant federal law.
The plaintiffs did refile their case, alleging that the company's founder, Erik Prince, and other Blackwater executives had "an intent to deploy a private army to kill and injure innocent Iraqis."
Blackwater held a contract to protect State Department diplomats stationed in Iraq.
The company has said the lawsuit "is much more about attracting media attention than about bringing legitimate claims to court."
The Associated Press contributed to this report.