WASHINGTON — Matt Raiche knew he was in trouble when the Marines handed him an orange jumpsuit, a bottle to urinate in, a Koran and a Muslim prayer rug.
Marine guards put the former Marine into a 6-foot-by-6-foot concrete cell, locked the steel door and told him to keep his mouth shut. In cells nearby, he heard imprisoned insurgents screaming in Arabic.
"They took us to be ... insurgent terrorists," said Raiche, 34, one of 16 U.S. contractors arrested by Marines last month on suspicion of firing indiscriminately at U.S. troops and Iraqi civilians. "We said we were Americans. We didn't know what was going on."
So began three days of captivity for the employees of North Carolina-based Zapata Engineering, who were apprehended after Marines allegedly witnessed them firing weapons from an armored convoy passing through Fallouja.
Although the details remain unclear, the May 28 incident reflects the long-simmering tension between the military and private business in Iraq. Even though the government has hired companies to perform many functions there -- including providing security -- it does not formally oversee their activities, allowing misunderstandings and disputes to fester.
Raiche said the Marines seemed resentful about the salaries contractors in Iraq are paid. "One Marine gets me on the ground and puts his knee in my back. Then I hear another Marine say, "How does it feel to make that contractor money now?' "
The contractors who were detained have denied the accusations against them. They were released and are in the process of returning home. Three unarmed Iraqi subcontractors for Pasadena-based Parsons Corp. who were passengers in the convoy were also held and released.
The Zapata contractors, who were held at a Marine base near Fallouja, acknowledged firing warning shots to prevent a suspicious vehicle from approaching their convoy but said they never aimed at Marines or civilians.
Marine officers confirmed that the Justice Department was reviewing the incident to determine whether criminal charges would be filed. The contractors were questioned by the FBI and Naval Criminal Investigative Services.
The Marine documents said the Zapata contractors, besides firing on civilians, had unauthorized weapons in their vehicles -- AT4 antitank weapons and grenades. Several of the contractors said they were given those weapons by Marines in the months before the confrontation. The Marines said they could not immediately confirm the source of the weapons.
The incident also renewed questions about the U.S. military's treatment of prisoners in Iraq. One of the few things both sides largely agree on is that the Marines treated the contractors like any other detainees -- treatment the contractors found abusive and humiliating.
The Marines are investigating the contractors' abuse complaints but have found "nothing to substantiate those claims," said Lt. Col. David Lapan, a Marine spokesman.
The case is believed to represent the first time the military has detained contractors in Iraq on suspicion of endangering Iraqi civilians or U.S. troops.
By some estimates, more than 20,000 security contractors operate in Iraq -- a private army that is the second-largest armed foreign contingent in the country, surpassed only by the 140,000 U.S. troops.
The contractors perform functions that thinly stretched U.S. forces would be hard-pressed to provide, such as armed protection for Iraqi and U.S. civilian officials, including the U.S. ambassador.
Many contractors are retired soldiers from the U.S., Britain and Australia. Others served in the military of the old apartheid government of South Africa or the armed forces of Colombia and El Salvador, long linked to human rights violations.
The contractors work in a legal shadow world, largely unregulated by either the U.S. or Iraqi government. Under an order signed by Coalition Provisional Authority chief L. Paul Bremer III in June 2004, as the U.S.-led occupation drew to a close, contractors are immune from prosecution in Iraq as long as the actions in question were performed as part of their work.
Almost since the beginning of the U.S.-led invasion in March 2003, there have been tensions between the private forces and the military.
Soldiers resent the perks the contractors enjoy. Contractors routinely make three or four times the pay of troops -- more than $100,000 a year.
Some troops and officials see the contractors as "cowboys" who enrage ordinary Iraqis with wanton behavior. Journalists have observed them pointing their guns and firing rounds at Iraqis who come too close. Contractors have been seen racing around Baghdad, Fallouja and other hotspots in armored SUVs, forcing Iraqi civilians off the road.
At a conference this year in Washington, Marine Col. Thomas X. Hammes noted that the military and the contractors had different objectives: The military wants to win the war and contractors want to serve their clients.