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Cities hiring private police?

Klint Finley over at Renegade Futurist recently pointed out This Story from the Wall Street Journal about the city of Oakland, CA hiring private guards to supplement their police force. Their reasoning, that contracting private guards are less expensive than hiring new police officers may well be sound; however, there's a moral issue involved that concerns me: who bears responsibility for the actions of those private guards?

Ideally, the responsibility would still lie with the city, since the guards are acting as their agents. but as we saw with Blackwater Worldwide, now called Xe Worldwide over in the Middle East, what we find is that the penalties for misconduct are financial at best and result in a company having to rebrand, at worst. What I haven't seen from either the government that hired Blackwater, or from Blackwater/Xe's management is a sincere mea culpa. They paid a few million dollars in fines - to the government - which essentially came back to them in the form of renewed and extended contracts from that same government. In other words, their responsibility has been pretty minimal, in light of what they've been accused of.

So what happens when we see that same lack of culpability manifest in this country? We already see citizens having problems settling with police raiding the wrong homes and causing a wide range of damage, including wrongful death. It may be comforting to think that these are isolated incidents, but how many does it take before we call a trend a trend? And what happens when the only recourse is to sue a corporation - a legal entity designed to shield it's members from risk and responsibility?

When corporate and governmental interests become indistinguishable from each other, the end result is loss of freedom culminating in the transition to overt fascism. I believe that the United States is currently in this transitional phase, and that the privatization of police is just one of the more overt symptoms.