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Former executives of Custer Battles _ an American firm accused of stealing millions from Iraq reconstruction projects and banned from further government contracts _ have continued doing contracting work and have formed new companies to bid on such projects, The Associated Press has learned.

The jailing of private security guards reflects the long simmering tensions between the military and private business in Iraq. Even though the government has hired private companies to perform many functions in Iraq -- including security -- it does not formally oversee their activities, allowing misunderstandings and disputes to fester.

Iraq's interior ministry said it wanted to impose legal boundaries on the private security business after American contractors twice opened fire on US marines. The move may be supported by the US military, whose patience with the contractors has been tested.

Abt Associates was found to have been little, if any, help to Iraqi health care. Its funding was cut, but it has won new pacts.

Three private contractors hired by the U.S. military to help make commercials, write news stories and produce TV shows aimed at foreign countries will tell the truth -- not lies, said the Army officer overseeing the contracts.

The Pentagon awarded three contracts this week, potentially worth up to $300 million over five years, to companies it hopes will inject more creativity into its psychological operations efforts to improve foreign public opinion about the United States, particularly the military.

The Marine Corps has banned at least 16 men from U.S. bases in western Iraq because they were allegedly part of a security convoy accused of speeding through Fallujah and indiscriminately firing unauthorized weapons.

One respects him for his work and taking responsibility for children. Another sees him like a fraternity brother. All recognized him as suffering human foibles, but acknowledged his attempts to overcome them. All but one were named by Blanchard as people who know him here. Their recollections paint a picture of a multi-faceted man with a story worth hearing.

Rick Blanchard says he was one of eight former U.S. Marines among 14 security specialists in a 19-man convoy employed by Zapata Engineering of Charlotte, N.C. on May 28 in Northern Iraq where Marines intercepted them and escorted them to Camp Fallujah.

A North Carolina company has repatriated its private security contractors, including eight former U.S. Marines, after they were accused and detained in Iraq for purportedly shooting at American troops in Fallujah.