Should Blackwater be subject to Iraqi law?

Blackwater USA is a private military security firm that provides security to U.S. diplomats in Iraq. It was founded by a former Navy Seal. According to Wikipedia, Blackwater has been paid more than $320 million by the State Department.

Blackwater employees in Iraq are not subject to Iraqi law. The New York Post has an editorial opposing this immunity. But I think Blackwater should keep its immunity.

First, if Iraqi politicians could put Blackwater employees in jail then Blackwater would start taking an interest in Iraqi politicians. I suspect the firm would start making large campaign contributions to Iraqi politicians to insure that Blackwater employees would be well-treated by the Iraqi legal system. Some Iraqis want to void Blackwater's legal immunity to get more control over the company. But voiding the immunity will more likely give Blackwater greater control over Iraq.

Second, if Blackwater lost its immunity then the company would have to pay its workers higher wages to make up for the risk of imprisonment the workers would now face. This cost would get passed on to U.S. taxpayers.