The CIA hired Blackwater in 2004 to assassinate and kidnap terrorist leaders. The CIA did not have a formal contract with the company but rather with high-ranking members and it is unknown whether the hiring was to actually carry out the acts themselves or to provide training so the agency could do it instead. Either way, the fact that the CIA was using an outside company seemed to scare Leon Panetta enough to drop the program and tell congress in June. Source: New York Times
Congress was obviosely in a firestorm over this and perhaps they should have been kept in the loop about the matter. However, Nathan A. Sales at National Reviewdisagrees saying that the policy makes good sense and is on firm legal ground.
For the sense part, Sales argues that the policy lessons strain on soldiers and is more humane to innocent bystanders. On legal grounds, he points out that the laws forbidding assassination are incredibly slim and even slimmer in times of war.