Blackwater 'Blood Money' Angers Iraqis

March 20, 2008— -- At least two Iraqi families of victims killed by Blackwater security guards in September tell ABC News they have refused compensation offered by the company.

The father of a 9-year-old boy, who says his son was one of the 17 civilians killed when Blackwater guards, escorting a diplomatic convoy, opened fire at Baghdad's Nisour Square on Sept. 16, says he is trying to file a lawsuit against the company. He told ABCNews.com that Blackwater offered him $20,000 through an Iraqi prosecutor, but he refused the money.

Another Iraqi who lost both his wife and son in the incident says he too has refused the company's offer of compensation of $20,000 for each victim.

Adel Jabur Shamma, who was injured in the incident, says he was bed-ridden for six months after being shot in the thigh. He says he was given $10,000 by the Iraqi prosecutor who is mediating between the families and Blackwater, but that the amount isn't nearly enough to cover his surgery. He says he took the money because he had no other choice.

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

The company released a statement this afternoon saying: "At the request of U.S. Embassy Baghdad, Blackwater has reached out to the families of those killed or injured in Nisoor Square on September 16 as part of this condolence payment process. These are customary condolence payments, and are not an admission of guilt, but recognize that Iraq is an extremely dangerous place. When faced with an enemy intent on maximizing civilian casualties, innocent people will tragically be caught in the crossfire; when that happens, their suffering should not go unrecognized."

Officials familiar with the case told ABCNews.com last month that Blackwater had resisted U.S. government demands that the company pay at least $100,000 per death, claiming the U.S. government itself hasn't paid that much in similar situations.