The Obama administration is using mercenaries with the firm formerly known as Blackwater to kidnap and assassinate high value targets in Pakistan, according to a published report.

The program, operated out of the US Joint Special Operations Command, "is so 'compartmentalized' that senior figures within the Obama administration and the US military chain of command may not be aware of its existence," an unnamed source with direct knowledge of the program told The Nation reporter Jeremy Scahill.

Xe Services, formerly known as Blackwater, is also allegedly involved in intelligence collection for a drone bombing campaign in the country.

Scahill's report added: "A defense official, on background, specifically denied that Blackwater performs work on drone strikes or intelligence for JSOC in Pakistan. 'We don't have any contracts to do that work for us. We don't contract that kind of work out, period,' the official said. 'There has not been, and is not now, contracts between JSOC and that organization for these types of services.' The previously unreported program, the military intelligence source said, is distinct from the CIA assassination program that the agency's director, Leon Panetta, announced he had canceled in June 2009. 'This is a parallel operation to the CIA,' said the source. 'They are two separate beasts.'"

A Blackwater spokesman told The Nation that none of its forces are operating in Pakistan. However, a "former senior executive at Blackwater" told Scahill that Xe's mercs are indeed working in Pakistan, sometimes employed by the country's government to operate alongside soldiers. The arrangement allows the Pakistani government to deny any U.S. military presence in the country, while allowing them to tap former U.S. special forces members for high-risk missions.

Scahill added that the CIA is also employing the firm in parallel operations.

"Targeted killings are not the most popular thing in town right now and the CIA knows that," Scahill's source reportedly said. "Contractors and especially JSOC personnel working under a classified mandate are not [overseen by Congress], so they just don't care. If there's one person they're going after and there's thirty-four people in the building, thirty-five people are going to die. That's the mentality. They're not accountable to anybody and they know that. It's an open secret, but what are you going to do, shut down JSOC?"

During the Bush administration, the JSOC was reportedly being commanded by the vice president's office, effectively making them Dick Cheney's own "executive assassination squad," according to investigative reporter Seymour Hersh.

President Obama's top official on the occupation of Afghanistan, General Stanley McChrystal, oversaw the JSOC from September 2003 to August 2008.

The White House did not respond to a request for comment, Scahill reported.

Read Scahill's full report.