Burson-Marsteller, of which Penn is Worldwide President and CEO, “has cut its ties to Blackwater and that was the right thing to do. Mark is and remains a valuable member of our team,” Wolfson said.

Penn’s unusual dual role as corporate executive and presidential strategist has been a running source of distraction for Clinton’s typically single-minded campaign. Though her supporters believe that voters will ultimately be unlikely to make their choice based on the actions of a consultant who is little known outside political circles, Penn has drawn a steady stream of criticism from other campaigns and from key Democratic groups.

Labor leaders objected to his firm’s work against union organizing, and Burson-Marsteller’s work for clients that include the tobacco industry and a leading, troubled subprime mortgage lender, Countrywide Financial, have also drawn fire.

“Bush has been a perfect example of cronyism, because Blackwater has given hundreds of thousands of dollars to Republicans and to President Bush. I also saw this morning that Sen. Clinton’s primary adviser, Mark Penn, who is like her Karl Rove — his firm is representing Blackwater,” former North Carolina Sen. John Edwards said in Iowa Friday.

“I think it is important for Iowa caucus-goers to understand the choices they have in this election. And it is the reason I continue to say we don’t want to replace a group of corporate Republicans with a group of corporate Democrats.”

Of course, few candidates are free of ties to corporate America, and even to its less popular quadrants. The hedge fund that employed Edwards before the presidential campaign began also invested heavily in the subprime mortgage industry, and advisers to other leading Democratic candidates also have corporate clients.

But Penn is a singular figure in Clinton’s orbit, often described as her Karl Rove. Campaign sources describe him as the most important figure in determining the campaign’s message; that is, what comes out of the senator’s mouth and goes into her TV ads.

A rumpled pollster known for his extremely detailed surveys, he came to national prominence working on Bill Clinton’s 1996 re-election campaign. His polling firm, Penn, Schoen & Berland Associates was sold to the global advertising powerhouse WPP in 2001 and rolled into Burson, the WPP subsidiary he now heads.

A spokesman for Burson-Marsteller, Paul Cordasco, confirmed that BKSH, a subsidiary of Burson run by Republican strategist Charles Black, had helped prepare Blackwater CEO Erik Prince for his testimony Tuesday before Congress on Blackwater soldiers’ shooting of Iraqi civilians.

"Through a personal relationship, BKSH, a subsidiary of Burson-Marsteller, helped Blackwater prepare for their recent hearing before Congress. With the hearing over, BKSH's temporary engagement has ended,” Cordasco said in an e-mail.

In another e-mail yesterday to Politico, Penn stressed that he is not involved in the Blackwater account, and called the firm’s work on Blackwater’s behalf “a temporary assignment based on a relationship that has concluded.”

Clinton, meanwhile, has — like most other leading Democrats — been a sharp critic of Blackwater, and of the Bush administration’s use of private military contractors in general.

“Let's end outsourcing our government to companies like Blackwater and hold the contractor accountable,” she said on Sept. 30 in Oakland, Calif., according to the San Jose Mercury News.

Wolfson yesterday reiterated that stance.

“Sen. Clinton believes Blackwater must be held accountable for its actions and has laid out a detailed proposal to sharply reduce the number of contractors employed by the federal government by 500,000,” he said. “She has repeatedly stated her concern that such contractors are not as accountable as federal employees.”