Evidence of Blackwater's criminal actions in Iraq were known to senior State Department officials two years ago, according to internal emails uncovered by ABC News today.

The emails discuss how the State Department would deflect a Los Angeles Times investigation into an incident where Blackwater mercenary troops shot and killed an Iraqi civilian.

One State Department official warned (PDF) that Blackwater was hurting the American mission in Iraq due to its continued negligence:

"If we are unable or unwilling to address this issue, sooner or later those requesting compensation for their losses will lose patience with us and seek recourse through other means.... In the worst-case scenario, some might seek revenge."

Despite intense internal debate over Blackwater's dangerous role in Iraq, the State Department did not move to restrain Blackwater until October 2007. In fact, these emails show how the Bush Administration actively worked to protect Blackwater from scrutiny.

Despite evidence that Blackwater is dangerous, there's still no word from Senators Boxer and Feinstein about their position on Blackwater's plans for California.