Baghdad Blood Money; How Much for a Dead Son?

The father of a 9-year-old Iraqi boy who says his son was killed by Blackwater security guards tells ABCNews.com the company has offered to build a monument and make an unspecified cash payment to compensate him for the death of his son, Ali.

The father says his son was one of 17 civilians killed when Blackwater security guards, escorting a diplomatic convoy, opened fire at Baghdad's Nisour square Sept. 16.

A lawyer for Blackwater says the company has no information that its guards were responsible for the boy's death and believe he was killed "by a stray bullet fired by someone not associated in any way with Blackwater" an hour after its guards left the square.

While a federal grand jury in Washington, D.C. investigates the deaths, Blackwater has been operating behind the scenes in Iraq to settle with the survivors and families of the dead.

Officials familiar with the case told ABCNews.com that Blackwater had resisted U.S. government demands that the company pay at least $100,000 per death, claiming the U.S. government has not paid that much in similar situations in Iraq.

Iraqi prosecutors reportedly are urging Blackwater to pay at least between $20,000 and $80,000.

The dead boy's father, Mohammed Hafiz, told ABCNews.com he had been approached by an Iraqi prosecutor, Jaafar al Musawi, who conveyed Blackwater's offer.

Blackwater lawyers say they believe the prosecutor has never spoken to the boy's father about any payment or negotiation.

In a letter to ABC News, Blackwater said a U.S. Army unit, the 1st Battalion, 64th Armor Regiment (Task Force 164) reported an incident involving "a warning shot that ricocheted and killed the nine year old boy."

A U.S. official says the incident report Blackwater refers to involves a different victim, a 9-year-old girl.

Blackwater complained to U.S. Army officials in October that it was being "falsely associated" with the death of Ali.

The father of the boy said the offer conveyed to him by the prosecutor involved Blackwater building a monument in the square to all of the victims, paying medical costs for those injured and making cash payments.

A Blackwater spokesperson declined comment on any negotiations involving the Sept. 16 incident but pointed to a U.S. government document indicating U.S. personnel would help with the distribution of "condolence payments."

The document states "such payments will be based on Iraqi cultural norms and will not be viewed as an admission of guilt."

Another victim, Adel Jabur Shamma, says he too has been contacted by the same Iraqi prosecutor, Jaafar al Musawi, who assured him Blackwater would cover his medical expenses.

Shamma says he cannot understand why it has taken so long for Blackwater to help him. He says he has been bed-ridden and is nearly handicapped after being shot in both legs during the incident.

As ABCNews.com has reported, the federal grand jury criminal investigation is focusing on two or three Blackwater guards who opened fire, claiming they perceived a threat.

Other Blackwater guards have testified to federal agents, however, they saw no such threat.

Several of the Iraqi families have already filed lawsuits against Blackwater in U.S. courts, alleging Blackwater guards were guilty of "war crimes."

This post has been updated.

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