What could make this week worse for Blackwater? If shooting Iraqi civilians and facing deportation pressure from the Maliki government weren't quite enough, there's also the looming investigation into illicit arms smuggling.

Federal prosecutors are investigating allegations that employees of Blackwater -- the security firm accused of shooting dead up to 20 Iraqi civilians -- illegally smuggled weapons into Iraq, according to U.S. government sources. [...]

One U.S. government official said the U.S. attorney's office in Raleigh, North Carolina, is in the early stages of an investigation that so far focuses on individual Blackwater employees and not the company.

The AP report added that the alleged smuggled arms from Blackwater employees "may have been sold on the black market and ended up in the hands of a U.S.-designated terrorist organization."

Blackwater's other problems, meanwhile, continue to worsen.

Iraq's Interior Ministry has expanded its investigation into incidents involving Blackwater USA security guards amid the furor following a shooting that claimed at least 11 lives, a ministry spokesman said Saturday.

Maj. Gen. Abdul-Karim Khalaf said the Moyock, N.C.-based company has been implicated in six other incidents over the past seven months, including a Feb. 7 shooting outside Iraqi state television in Baghdad in which three building guards were fatally shot.

One wonders where all of this could go, or whether it's a moot point. After a few days of inactivity, Blackwater went back to work yesterday, and the "sovereign" Iraqi government grudgingly acknowledges that it can't kick Blackwater out of the country.