This weekend I had a conversation with a Republican friend of mine who seemed genuinely surprised that we have mercenaries in Iraq. Of course this is old news for most of us on the left, but it is also obvious (my friend says he gets most of his news form Sean Hannity) that the right isn't apt to report this sort of stuff. It got a brief play in the media after four Blackwater USA 'security contractors' (the preferred term they use) were murdered and their bodies burnt after their convoy was ambushed in Fallujah on March 31, 2004, but then was pretty much dropped by most of the national media. In fact, this had been reported first by Bill Berkowitz almost a month before the Fallujah incident. He focused on their recruiting efforts in Chile and South Africa-- two former dictatorships with armies who specialized in counterinsurgency ops but who now were out of a job. But the four contractors killed in Fallujah were Americans, as have been the majority of the security contractors killed in Iraq (you have to scroll all the way to the right edge of the screen to see job description and employer).
I actually knew about it from a somewhat personal source well before that, although not the full extent of it. Two friends of mine who served with local law enforcement agencies here in Northeastern Arizona before the Iraq war told me about an ad that they had seen circulated among police officers advertising for law enforcement professionals (with prior military experience a plus) who would be willing to work in regions of global conflict to provide security for up to $110,000 (according to the ad-- like most pre-war claims, it was a lie-- most 'security contractors' earn about $40,000-$60,000 in fact).
What has changed is that mercenaries today are no longer 'independent contractors' as they traditionally have been. Because they are now managed and formed into commando units by companies like Blackwater (as well as DynCorp and a few others), it is only necessary to contract with the company. Because rules of engagement for paramilitary forces are not well defined, our government has found them useful in missions that the traditional army might not be able to undertake for political reasons, for example, operations that carry a high risk of civilian casualties, military operations within the borders of the United States or against U.S. citizens, or operations in which it is foreseen that some of the traditional rules of engagement might not apply. If the mercenaries break some of the rules, there is either the benefit of deniability, or the ability to fire the 'security contractors' without admitting guilt.