Oregon Live November 2, 1012
A Portland jury found defense contractor KBR Inc. was negligent, but did not commit fraud against a dozen Oregon Army National Guard soldiers who sued the company for its conduct in Iraq nine years ago. Magistrate Judge Paul Papak announced the decision about 3:35 p.m. the U.S. Courthouse in Portland. Each soldier was awarded $850,000 in non-economic damages and $6.25 million in punitive damages.
“It’s a little bit of justice,” said Guard veteran Jason Arnold, moments after the verdict was announced Friday afternoon. Arnold was one of four of the soldier-plaintiffs in the courtroom was the verdict was read.
The verdict should send an important message to those who rely on military troops, he said.
“We’re not disposable,” said another soldier, Aaron St. Clair. “People are not going to make money from our blood.”
KBR’s lead attorney, Geoffrey Harrison, said the company will appeal.
“We will appeal the jury’s incorrect verdict,” he said. “We believe the trial court should have dismissed the case before the trial.”
Harrison said the soldiers’ lawyers produced a medical expert, Dr. Arch Carson, who offered “unsupported, untested medical opinions” that each soldier had suffered invisible, cellular-level injuries as a result of their exposure to hexavalent chromium.
The verdict means the jury did not hear clear and convincing evidence that KBR intended to deceive the soldiers in the way it operated at the Qarmat Ali water treatment plant, near Basra, Iraq. But they did find that the company failed to meet its obligations in managing the work at the plant.
Friday’s verdict closes the first phase of a web of litigation between National Guard and British troops against KBR Inc., the defense contractor they accuse of knowingly exposing them in 2003 to a carcinogen at Qarmat Ali. KBR has denied the accusations.
In Oregon another set of Oregon soldiers are waiting in the wings for their day in court. Magistrate Judge Paul Papak and the attorneys agreed earlier to hold an initial trial with the first 12 soldiers, in order to keep the proceedings from becoming too unwieldy. A second trial, featuring all or some of the remaining 21 plaintiffs, could begin in federal court in Portland this winter.
Another lawsuit brought by Indiana soldiers against KBR is on hold in federal court in Texas, while an appeals court considers a jurisdictional issue.
The cases stem from the chaotic aftermath of the U.S.-led invasion of Iraq in March 2003. The Army Corps of Engineers hired KBR Inc. to run a massive program called Restore Iraqi Oil. The program involved dozens of sites throughout Iraq — sites that neither the Army nor KBR had visited before the invasion. The project was intended to quickly restore the flow of Iraq’s oil, partly to fund the war. The Pentagon remembered the way Saddam Hussein had lit the fields on fire during the first Gulf War, and feared a repeat in 2003.
Qarmat Ali was a compound where water was pumped underground to drive oil to the surface elsewhere. For decades, Iraqis had treated the water with sodium dichromate, an anticorrosion agent that contains hexavalent chromium, a known carcinogen. (Sodium dichromate is banned in the United States.)
Iraq’s Southern Oil Co. took delivery of sodium dichromate, an orange-yellow crystalline powder, in bags that were stored on site. Soldiers and others testified that the material was loose and drifting around the site, and had contaminated areas even outside the chemical injection building where it was added to the water.
How contaminated was it? Accounts differ. Even one of the plaintiffs in this case said he didn’t notice any soil discoloration. One of the British soldiers whose testimony was prerecorded said it was everywhere. Another Oregon soldier said it settled heavily on the clothing of the soldiers, who unwittingly carried it back to their camps over the border in Kuwait.
Much of KBR’s defense in the first Oregon trial focused on just how unlikely it was that any soldier — who visited the plant at durations from one day to 21 days — could have been exposed to dangerously high levels of sodium dichromate. But one of the most gripping portions of the testimony was when Oregon veteran Larry Roberta described eating a chicken patty that had been coated with the orange crystals, which he said immediately burned in his esophagus, causing him to vomit.
Roberta now is confined to a wheelchair and takes oxygen from a tank in his backpack. He had a history of gastrointestinal issues, but attributes much of his poor health to his time at Qarmat Ali.
Harrison, KBR’s lawyer, said the company “believes in the judicial process and respects the efforts and time of the jurors,” but believes the process that brought the case to conclusion Friday shouldn’t have been allowed to come so far.
“KBR did safe and exceptional work in Iraq under difficult circumstances,” he said in a brief, prepared statement. “We believe the facts and law ultimately will provide vindication.”
Soldier-plaintiff Arnold said the message of the verdict is unmistakable. He said service members are being exploited “to this day.”
Now, he said, “the voice will be out. There will be a lot more scrutiny.”
Klein Frank, P.C. Announces $18.78 Million Awarded to Burn Victim of Contractor’s Negligence In Baghdad, Iraq
DENVER, July 11, 2012 /PRNewswire via COMTEX/ —
Klein Frank, P.C. of Boulder, Colorado and the Law Firm of Ted B. Lyon in Dallas, Texas announce that a jury has rendered a verdict in the amount of $18.78 Million in the case of Dawson v. Fluor Intercontinental, Inc.
Plaintiff David Dawson was a civilian contractor working on the reconstruction of Iraq. Defendant Fluor Intercontinental, Inc. entered into a $59 Million a year costs plus contract with the Army Corps of Engineers to provide O&M and Life Support services in multiple compounds in Iraq. This contract specifically required Fluor to provide safe water to individuals living in these compounds. Fluor Intercontinental, Inc was paid $10 Million per year plus costs to maintain Freedom Compound, a 600 bed facility in Baghdad. Dawson was burned by excessively hot water at Freedom Compound on November 16, 2007.
The jury found that Fluor was negligent and failed to properly maintain the safe temperature of the water heaters. The Defense expert for Fluor testified that the water heaters would reach over 200 Degrees Fahrenheit. All parties agreed that the safe temperature of water was 120 Degrees Fahrenheit.
As a consequence of Fluor’s negligence, David Dawson received third degree burns over 65% of his body and burns to his lungs. He was treated at the Ibn Sina hospital in Baghdad by the 86th CSH and airlifted to Germany where he received extensive treatment to save his life. Dawson credits the skill of his physicians for his survival. The jury awarded him $18.78 million in compensation for his disfigurement and the extreme suffering through which he lived.
Trial attorney Beth Klein “We are grateful that the jury held this highly compensated contractor to the standards to which it agreed. We hope that this verdict will help ensure the safety of our citizens working to support the efforts of the United States and to ensure that contractors provide the value that they promise.”
Oregon Live June 26, 2012
It’s not clear who’s going to pay legal costs for defense contractor KBR Inc., which is being sued by National Guard soldiers who accuse the company of knowingly exposing them to a carcinogen.
While the company persuaded the Army Corps of Engineers to write an indemnification clause into its 2003 contract to restore the flow of Iraq’s oil, the Corps has twice refused KBR’s request to cover its costs in the two lawsuits proceeding against it in Oregon and Texas.
Lawyers for KBR say they believe the company is entitled to have its expenses covered by taxpayers but is proceeding through the litigation in the meantime at its own risk and expense, said Geoffrey Harrison of the Houston firm of Susman, Godfrey. The company expects to challenge the Corps’ denial “maybe at the end of the case,” he said.
Prosecutors say their investigation has unmasked one of the largest and most brazen government procurement frauds in history
Associated Press March 13, 2012
WASHINGTON — A former executive on Tuesday admitted his role in a $28 million bribery scheme involving the awarding of government contracts and is cooperating with prosecutors in their continuing investigation.
Harold F. Babb, 60, pleaded guilty in federal court in Washington to one charge each of bribery and unlawful kickbacks. Babb was arrested in October along with three other men, including two employees of the U.S. Army Corps of Engineers. Prosecutors say their investigation has unmasked one of the largest and most brazen government procurement frauds in history.
“It took me a while to come to terms (with), but I am guilty,” Babb told a federal judge before entering his plea.
Babb, who has been in custody since his arrest, admitted participating in a complex, far-ranging scheme.
Prosecutors say the fraud involved contracts steered to favored subcontractors for kickbacks, contracts awarded through bribery and the submission of phony and inflated invoices for payment. Authorities say the illicit proceeds of the scheme were split among multiple defendants and used to purchase clothing, real estate, cars, fine jewelry and other luxuries.
A bribery conviction carries a possible sentence of up to 15 years in prison and the unlawful kickbacks charge can carry up to 10 years, though Babb is likely to face a much shorter sentence because of his guilty plea and cooperation.
“Mr. Babb decided to accept responsibility and cooperate with the government and move on his with his life,” his lawyer, Jeffrey Jacobovitz, said after the plea hearing.
At the time of his arrest, Babb was director of contracts for Eyak Technology, the subsidiary of an Alaska Native Corporation with operations in Virginia and the prime contractor for a lucrative contract with the Army Corps of Engineers. EyakTek, in turn, had multiple subcontractors, including Nova Datacom and Big Surf Construction Management.
Babb admitted to accepting more than $1 million in kickbacks from Nova Datacom’s chief technology officer, Alex N. Cho, in exchange for giving the subcontractor preferential treatment, and to paying more than $7 million in bribes in return for approval on Army Corps of Engineers contracts and subcontracts, according to authorities.
Babb was arrested along with two Army Corps of Engineers employees, Kerry F. Khan and Michael A. Alexander, and Khan’s son, Lee Khan. Alexander pleaded guilty last month to bribery and conspiracy. Prosecutors initially described the scheme as totaling $20 million, but they say the scope of the fraud has increased to $28 million as new bribes and kickback payments have been discovered.
Since the initial arrests, prosecutors also have revealed charges against a handful of other men associated with subcontractors, including Cho, who pleaded guilty last September to money laundering, conspiracy and other charges.
Cross Posted from MsSparky’s November 8, 2011
On September 30, 2011 KBR, along with Berger/Cummins JV and IAP Worldwide Services, Inc. were awarded contracts by the The U.S. Army Corps of Engineers to provide electrical services for contingency operations in Afghanistan. This $490 million dollar contract is to perform electrical services for prime power operations in support of any location within the Afghan Theater of Operations. This contract supports any and all U.S. facilities in Afghanistan, as required, up to the maximum capacity of $500 million.
The contract includes generator set Operations and Maintenance (O&M), preparation, transport, installation, preventive maintenance, scheduled maintenance, emergency maintenance, service, fueling, relocating and recovering generator sets, associated fuel systems (if required), and all transmission/distribution system maintenance including the underground or overhead system at the U.S. Facilities from the generators to the transformer and associated switchgear.
USACE, who has had their own employee issues lately, acts as if there are no other contractors out there who can do this work! Not to mention, I suspect these three contractors will load up on cheap third world or Afghan labor to perform this work instead of licensed electricians, further propagating US sponsored human trafficking.
Let’s take a look at these contractors one by one at MsSparky’s
In October 2011, Global Integrated Security (USA), Inc. in Reston, VA won a 4-year, $480 million firm-fixed-price contract from the U.S. Army Corps of Engineers, for Reconstruction Security Support Services throughout Afghanistan. Work will be performed in Afghanistan, with an estimated completion date of Oct 19/15. Five bids were solicited, with 5 bids received by the USACE office in Winchester, VA (W912ER-12-D-0001).
Global Integrated Security has performed RSSS work in Afghanistan before. A $34 million task order in December 2009 focused on Kabul and Kandahar, but a March 2010 contract [PDF] from the US Army Corps of Engineers saw them expand those services to encompass a National Operations Center providing intelligence and analysis, reconnaissance teams, interpreters, aviation services throughout Afghanistan; and “mobile security support services” to USACE personnel during travel to, and presence at, construction sites
Execute USACE Army Corp of Engineers projects as part of rebuilding Iraq program. Manage public work, military base and Iraqi infrastructure building construction projects. Mentor and train Iraqi Engineers to step up to the Western techniques in financial and financial project schedule management. ~LinkedIn Profile
(DoJ) – WASHINGTON – September 19, 2011 –
A former employee of the U.S. Army Corps of Engineers stationed in Baghdad, Iraq, pleaded guilty today to conspiring to receive bribes from Iraqi contractors involved in the U.S.-funded reconstruction efforts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office.
Thomas Aram Manok, 50, of Chantilly, Va., pleaded guilty before U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia. Sentencing has been scheduled for Dec. 9, 2011. Manok faces a maximum penalty of five years in prison.
According to court documents, Manok admitted to using his official position to conspire with Iraqi contractors to accept cash bribes in exchange for recommending that the Army Corps of Engineers approve contracts and other requests for payment submitted by the contractors to the U.S. government. According to court documents, in March and April 2010, Manok agreed to receive a $10,000 payment from one such contractor who had been involved in constructing a kindergarten and girls’ school in the Abu Ghraib neighborhood of Baghdad and had sought Manok’s influence in having requests for payment approved by the Corps of Engineers. According to court documents, Manok was to receive an additional bribe payment from the contractor once the contractor’s claim had been approved. Manok also admitted that he intended to conceal the payments from authorities by transferring them, via associates, from Iraq to Armenia.
This case was investigated by the FBI’s Washington Field Office, the Department of Defense Office of the Inspector General, the Army Criminal Investigation Command and the Defense Criminal Investigative Service, as participants in the International Contract Corruption Task Force. The case is being prosecuted by Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia and Trial Attorney Mary Ann McCarthy of the Criminal Division’s Fraud Section.
An alarming story of greed, negligence, and a lack of government oversight
Starring the DBA Insurance company that most ruthlessly denies the medical care and benefits to Injured Contractors and the Widows and families of those who are killed.
July 28, 2011
So this $58.5 million was overcharged in a very small portion of the DBA business that CNA carries.
Basically CNA overcharged, didn’t reimburse USACE and contractors for labor charges that turned out not to be justified, did not have proper paperwork in place and accounting procedures to allow DCAA to be able to look at their books and determine who was owed what.
CNA also commingled funds meant to be segregated for different contracts, lumping them all into one account.
The workers’ compensation program is so riddled with problems as a result of using a third-party insurer that the inspector general’s office suggests it may be worthwhile to dump the insurer altogether, the audit reads.
More to come
WASHINGTON, July 14 (UPI) — The Justice Department Thursday announced the indictment of three former U.S. Army Corps of Engineers employees in a multimillion-dollar kickback scheme.
The former employees, along with two foreign contractors, were charged in a 54-count indictment with bribery and fraud in connection with the award of more than $50 million in construction and infrastructure contracts in Iraq, U.S. Attorney Paul J. Fishman for the District of New Jersey said in a statement.
The five defendants named in the indictment are Egyptian-born U.S. citizen John Alfy Salama Markus, 39, of Nazareth, Pa.; Onisem Gomez, 32, a U.S. citizen residing in Chiriqui, Panama; Ammar Al-Jobory, aka “Ammar Hussein Muhammed Al-Jobory,” 33, an Iraqi citizen; Ahmed Nouri, aka “Ahmed Bahjat,” 41, a citizen of Great Britain residing in Greece and Iraq; and Mithaq Al-Fahal, aka “Mithaq Mahmood Al-Fahal,” 36, an Iraqi citizen.
DynCorp International Inc., the largest contractor in Afghanistan, is running two years late in completing construction of a barracks for use by Afghan security forces, according to the U.S. Army Corps of Engineers.
The $72.8 million, two-phase project for Kunduz was originally scheduled to be completed in June 2009. The date was extended to August 2010. The latest completion target is May 31, Corps spokesman Eugene Pawlik said in an e-mail yesterday.
Construction delays at the Kunduz barracks, in northern Afghanistan, and at other facilities throughout the country complicates the U.S. process of turning over security functions to Afghan forces, said Charles Tiefer, a member of the Commission on Wartime Contracting.
“It’s a setback in our hoped-for rapid build-up of the Afghan army’s infrastructure, which needs top priority if we’re to meet the deadline of turning responsibility for the country’s security to these Afghan forces in 2014,” Tiefer, a University of Baltimore professor, said in an e-mail today. The eight- member commission was established by Congress to monitor contracting in Iraq and Afghanistan.
Ashley Burke, a spokeswoman for Falls Church, Virginia- based DynCorp, said in an e-mail that “unanticipated soil abnormalities were a major issue impeding the construction progress.” DynCorp was acquired last year by New York-based Cerberus Capital Management LP. Please read the entire article here
Since nobody has mentioned it thus far I thought I would draw your notice to a Department of Defense Inspector General’s report. As it was dated April 1 perhaps people thought it was an April Fools joke. Alas, it was not.
The aim of the report, “U.S. Army Corps of Engineers’ Use of Award Fees on Contracts in Iraq and Afghanistan” was to determine whether award fees paid by the U.S. Army Corps of Engineers Transatlantic Programs Center (TAC) to contractors in support of operations in Iraq and Afghanistan were justified.
You can probably already guess the answer.
The report found that:
TAC contracting and award fee officials did not properly manage and oversee the award fee process for the 15 CPAF [Cost-Plus-Award-Fee] task orders reviewed, valued at $116.4 million. Specifically, officials did not:
Develop adequate award fee plans for incentivizing and evaluating contractor performance,
Adequately conduct oversight and evaluation responsibilities, or
Adequately document and support award fee ratings.
This occurred because USACE did not have policies and procedures for administering award fees consistently and in accordance with Federal Acquisition Regulation (FAR) requirements. In addition, USACE did not adopt Army best practices documented in the Army Contracting Agency (ACA) Award Fee Contracts Handbook.
How TAC could not “have policies and procedures for administering award fees consistently and in accordance with” FAR requirements is an interesting mystery. Admittedly the FAR is not easy reading. Okay, it is mind numbing. Still, assuming one had one’s morning coffee it is an easy click down to “Subchapter C–Contracting Methods and Contract Types”
Anyway, the bottom line was that “As a result, TAC contracting officers and award fee personnel awarded fees, totaling approximately $20.6 million, without sufficient support, justification, or assurance that contractors were paid award fees commensurate with their level of performance.”
For those without a calculator that means almost 18 percent of the total task orders award fees value was without “sufficient support, justification, or assurance that contractors were paid award fees commensurate with their level of performance.”
I wonder if that is the sort of value various industry trade associations have in mind when they proclaim contractor cost-effectiveness. I’m just asking, mind you.
This is not to blame the contractors. They can only follow the procedures that exist and the procedures were AWOL.
As the report notes:
TAC contracting officials did not develop adequate AFPs [Award Fee Plan]. Specifically, TAC contracting officials did not develop criteria to evaluate contractor performance that were tailored to the individual circumstances of the procurement, as required by AFARS. Instead, TAC contracting officials established criteria that were vague and not measureable. For example, TAC established criteria that were intended to evaluate the contractors’ efforts to control cost; however, the criteria that TAC established did not address acquisition outcomes such as meeting cost goals. The cost control criteria were overly general and included undefined terms such as “effectiveness,” “timeliness,” “completeness,” and “reasonableness.”
In May 1991, my Explosive Ordnance Disposal unit stationed at Incirlik AB, Turkey, was deployed into northern Iraq in support of the Kurdish relief efforts. Our mission was simple; find and destroy any ordnance that posed a threat to the civilian population. In four months time, our unit found and disposed of over 1,000 tons of high explosives.
On many days, my team chief and I traveled the countryside in a Humvee with no security force support. Regularly, local Kurds would act as guides for us, showing us where there were minefields or caches of ordnance. The people were friendly to us, and we were friendly to them. Our unit did operations in Zahku, Dohuk and Sirsenk, and at no time did we ever feel like we were in danger.
On one particular day, we stumbled upon a Kurdish refugee tent camp up in the hills. Despite being in uniform and armed, my team chief and I were invited to lunch. We sat in a tent with about ten Kurdish men, eating a meager meal made of meat wrapped in grape leaves and fresh goat’s milk, while the only Kurd that spoke English, a former teacher, told us tales of how Saddam Hussein waged a relentless war against his people. After the lunch and tales were finished, we thanked the men for their hospitality and they thanked us for helping them. It is an encounter that I will never forget because of the pure goodwill among us.
In 2006, I returned to Iraq, this time as a US contractor doing ordnance disposal work on behalf of the Department of Defense. I flew from Kuwait to the US AB base at Talil, Iraq. I had to wait two weeks before I could get to the site I was assigned because the private security convoys were few and far between.
The team to which I was assigned worked a site south of Basra for two weeks before the US Army Corp. of Engineers’ representative deemed the site, an Iraq-Iran War battlefield, too saturated with ordnance for us to ever fully clear. We returned to Talil, Iraq, pending reassignment by the company.
When the company decided to send our team into an area that wasn’t safe or secured by military forces, I was stunned. It was an area that was rightfully called “insurgentville.” We were told, point blank, that if we were attacked, we were “on our own.” I asked for, and was granted, a transfer to a company depot site.
I was flown to a military forward operating base outside of Kirkuk, Iraq. I waited until the depot sent its private security convoy to pick me up. During the convoy, I sat in the armored vehicle as the security contractor that manned the top-mounted gun fired upon a vehicle behind our convoy that carried a man, his wife and two children. I sat there, in stunned silence, as the brass fell around me, looking out the back of the vehicle at the car, watching the Iraqi man who was driving yelling, waving his arm out the window of his car at the convoy that was firing at his vehicle.
It was while I was at the depot that I worked with Iraqi civilians that were bussed into camp to work as day laborers. We would start the day by going to the Iraqi worker camp, picking up eight to ten day labor workers, and they would assist us for the day. I had plenty of opportunities to talk to the Iraqi workers. Many of these workers were unemployed and felt they had no other option than to work for American contractor companies in order to have money to feed their families.
While many of the Iraqis I talked to were glad that Saddam Hussein had been deposed from power and had seen the US invasion as a great opportunity for Iraq, they had become disillusioned over the years. Some told me that they wished the US had never invaded Iraq, telling me that life under Saddam Hussein had never been as bad for them or their families as it was for them now.
It was while I was at this depot that I watched how these Iraqi civilians were being treated by the contractors. Respect in the Iraqi culture starts with an individual’s age. Age implies wisdom, and wisdom demands respect. The older the person, the higher in stature and responsibility they are granted. Because I granted these workers their most basic form of respect, many gravitated to me whether to talk about their families, political views or simply to ask about America. Some of the contractors I worked with could not understand this concept, and worse, treated all Iraqis as if they were beneath them.
After a mere month of working at the depot, I told the company to send me home. I couldn’t take it anymore. I couldn’t take watching how the workers were being treated by certain contractors. It had gotten so bad that many workers began boycotting working for us. If we didn’t have workers, we couldn’t meet the production level set, and that meant that the company looked bad in the eyes of the US Army Corp. of Engineers’ representative. The further we fell behind, the worse the threats against the workers became.
I have been to Iraq during a just war, and I have been to Iraq when our war was seen by many to be an unjust war. The best thing America can do is leave Iraq and let the Iraqi people put their country back together. The worst thing we can do is try to maintain our military bases and presence in Iraq indefinitely. We lost the goodwill of the Iraqi people years ago and nothing we do now will generate different results or feelings.
We can leave or we can fight an insurgency in Iraq indefinitely. Those are our only two options.