Immunity Deal May Not Save Blackwater Guards From Prosecution

State Department officials have reportedly granted several Blackwater employees immunity from prosecution in its case of last month's deadly shootings of 17 Iraqi civilians, but officials close to the investigation told FOX News the guards are not off the hook.

Blackwater employees were told that they could speak freely and that what they said would not be used against them individually, but a source with firsthand knowledge of the investigation said that does not mean what they said about each other could not be used against the individuals who fired their weapons.

The Justice Department issued a statement Tuesday saying it can't discuss the details of the case, but the Blackwater guards are not clear from possible criminal charges.

"Any suggestion that the Blackwater employees in question have been given immunity from federal criminal prosecution is inaccurate. The Justice Department and the FBI continue the criminal investigation of this matter knowing that this investigation involves a number of complex issues. We are unable to comment further at this time," reads a written statement from Justice Department spokesman Dean Boyd.

On Monday, an FBI official told FOX News that the case "is an ongoing matter, and we will have no comment." A Department of Justice source agreed that "the investigation is continuing."

But one source indicated the Department of Justice and the FBI feel hamstrung by the immunity grant, which blocked the FBI investigative team in Baghdad from collecting essential information from those allegedly involved in the shootings.

Senior federal law enforcement officials confirm that an FBI investigative team returned home Monday to Washington, D.C., from Baghdad. The team had been trying to collect evidence in the Sept. 16 embassy convoy shooting, and was not able to collect statements from Blackwater employees who were given immunity.

"Once you give immunity, you can't take it away," a senior law enforcement official familiar with the investigation told The Associated Press.

On Tuesday Senate Judiciary Committee Chairman Patrick Leahy, a strong critic of operations in Iraq, said the immunity deal fits a "well-worn pattern" of excusing misbehavior in the Bush administration.

"In this administration, accountability goes by the boards. That seems to be a central tenet in the Bush administration — that no one from their team should be held accountable, if accountability can be avoided. That goes equally for misconduct and for incompetence," Leahy said in a statement. "They are the amnesty administration. Dodging accountability corrodes our values and our integrity, which have been real sources of America’s enduring strength."

The news also inflamed Rep. Henry Waxman, chairman of the House Oversight and Government Affairs Committee, who had been conducting his own probe of the shootings until the Justice Department requested lawmakers wait until the FBI concludes its inquiry.

Waxman wrote Secretary of State Condoleezza Rice on Tuesday asking for details of the decision-making behind the grant of immunity, and the deal, but said he wasn't yet looking for witness statements provided after the immunity was given.

"This rash grant of immunity was an egregious misjudgment. It raises serious questions about who conferred the immunity, who approved it at the State Department, and what their motives were," Waxman, D-Calif., wrote.

Just as the immunity deal was being reported, a Blackwater representative said a press release issued Monday on what appears to be Blackwater letterhead suggesting it is setting up a corporate responsibility office is not true and designed to further besmirch the name of Blackwater.

That press release quoted Eric Prince, chairman and CEO of the Prince Group and Blackwater USA, as saying: “Just as in warfare, a good offense is the best defense. So we are going on the offense to defend the image of our great company.”

The company has defended itself against accusations by saying its convoy was under attack on Sept. 16 before it opened fire in west Baghdad's Nisoor Square, killing 17 Iraqis. A follow-up investigation by the Iraqi government, however, concluded that Blackwater's men were unprovoked. No witnesses have been found to contradict that finding.

An initial incident report by U.S. Central Command, which oversees military operations in Iraq, also indicated "no enemy activity involved" in the Sept. 16 incident. The report says Blackwater guards were traveling against the flow of traffic through a traffic circle when they "engaged five civilian vehicles with small arms fire" at a distance of 50 meters.

According to a source familiar with the investigation, 19 Blackwater employees are implicated in the shooting, and an two Blackwater employees in a helicopter sent to the scene after trouble was reported are also potentially involved in the incident. Two or three of the Blackwater employees have returned back to the U.S. because their contracts ended. A total of five of the 21 Blackwater employees reportedly opened fire with their weapons.

Those who have remained in Baghdad working for Blackwater are carrying out limited duties within the "wire" — or Green Zone. They have not been allowed to accompany diplomatic convoys since the Sept incident, the source said.

All the Blackwater bodyguards involved were given legal protections as investigators from the Bureau of Diplomatic Security sought to find out what happened. The bureau is an arm of the State Department.

The FBI had taken over the case early this month, officials said, after prosecutors in the Justice Department's criminal division realized it could not bring charges against Blackwater guards based on their statements to the Diplomatic Security investigators.

Officials said the Blackwater bodyguards spoke only after receiving so-called "Garrity" protections, requiring that their statements only be used internally — and not for criminal prosecutions.

At that point, the Justice Department shifted the investigation to prosecutors in its national security division, sealing the guards' statements and attempting to build a case based on other evidence from a crime scene that was by then already two weeks old.

The FBI has re-interviewed some of the Blackwater employees, and one official said Monday that at least several of them have refused to answer questions, citing their constitutional right to avoid self-incrimination. Any statements that the guards give to the FBI could be used to bring criminal charges.

A second official, however, said that not all the guards have cited their Fifth Amendment right against self-incrimination — leaving open the possibility for future charges. The official declined to elaborate.

Prosecutors will have to prove that any evidence they use in bringing charges against Blackwater employees was uncovered without using the guards' statements to State Department investigators. They "have to show we got the information independently," one official said.

Garrity protections generally are given to police or other public law enforcement officers, and were extended to the Blackwater guards because they were working on behalf of the US government, one official said. Experts said it's rare for them to be given to all or even most witnesses — particularly before a suspect is identified.

"You have to be careful," said Michael Horowitz, a former federal prosecutor in Manhattan and senior Justice Department official. "You have to understand early on who your serious subjects are in the investigation, and avoid giving these people the protections."

It's not clear why the Diplomatic Security investigators agreed to give immunity to the bodyguards, or who authorized doing so.

Bureau of Diplomatic Security chief Richard Griffin last week announced his resignation, effective Thursday. Senior State Department officials, speaking on conditions of anonymity, have said his departure was directly related to his oversight of Blackwater contractors.

Tyrrell, the Blackwater spokeswoman, said the company was alerted Oct. 2 that the FBI would be taking over the investigation from the State Department. She declined further comment.

On Oct. 3, the State Department's Sean McCormack said the FBI had been called in to assist Diplomatic Security investigators. A day later, he said the FBI had taken over the probe.

"We, internally and in talking with the FBI, had been thinking about the idea of the FBI leading the investigation for a number of different reasons," McCormack told reporters during an Oct. 4 briefing.

Last week, Secretary of State Condoleezza Rice ordered a series of measures to boost government oversight of the private guards who protect American diplomats in Iraq. They include increased monitoring and explicit rules on when and how they can use deadly force.

Blackwater's contract with the State Department expires in May, and Iraqi Prime Minister Nouri al-Maliki has said his Cabinet is drafting legislation that would force the State Department to replace Blackwater with another security company.

FOX News' Ian McCaleb and The Associated Press contributed to this report.