Law enforcement officials say the State Department granted them immunity from prosecution before taking their statements. They can still be prosecuted but former prosecutor David Laufman says it will be harder to make a case, CBS News national security correspondent David Martin reports.
"It requires the FBI and the department of justice to ensure that any evidence the FBI develops is disconnected from any information that the State Department developed," Laufman said.
The FBI was brought into the case more than two weeks after the September 16 shooting, which left 17 Iraqi civilians dead. By then the crime scene was once again a busy Baghdad traffic circle and most of the physical evidence had been removed.
The FBI can still interview the guards but Laufman doubts they will cooperate.
"It is almost certain that they or their attornies will seek immunity from the Department of Justice before talking to the FBI or appearing before a Grand Jury," he said.
The FBI agents are on their way back from Iraq but because of the complications caused by the grant of immunity any prosecutions could still be months away.
The investigative misstep comes in the wake of already-strained relations between the United States and Iraq, which is demanding the right to launch its own prosecution of the Blackwater bodyguards.
Blackwater spokeswoman Anne Tyrrell declined comment about the U.S. investigation. Based in Moyock, N.C., Blackwater USA is the largest private security firm protecting U.S. diplomats in Iraq.
The company has said its Sept. 16 convoy was under attack 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.
The FBI took 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 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.