From Reuters (James Vicini):
WASHINGTON, April 1 (Reuters) - The U.S. Justice Department said on Thursday it sued the Houston-based military contractor KBR Inc (KBR.N) for alleged false claims act violations over improper costs for private security in Iraq.
The lawsuit, filed in federal court in Washington, D.C., alleged that KBR knowingly included impermissible costs for private armed security in billings to the U.S. Army covering the 2003-2006 time period, the department said.
KBR has been the U.S. military's largest private contractor in Iraq and Afghanistan. It has been criticized for cost overruns in Iraq, and lawmakers in Congress last month questioned the Army's continued use of KBR for logistics work.
(bolding by diarist)
full article here:
The lawsuit alleges that KBR was illegally arming employees, then billing the US Government for it separately as a subcontracted security cost. 33 'subcontractors' are involved in the suit, apparently. Perhaps this sort of shady billing was overlooked, if not encouraged during the Bush/Cheney years. The lawsuit regards a period BEFORE Halliburton parted ways with KBR (official breakup date: April 5, 2007. **sniff**)
another excerpt from the article:
The lawsuit said KBR violated the contract by failing to obtain Army authorization for arming subcontractors and by allowing the use of private security contractors who were not registered with the Iraqi Ministry of the Interior.
The subcontractors also are alleged to have violated the terms that required travel only in military convoys, the department said.
The very idea of KBR having 'subcontractors' is kind of funny, in a criminal sort of way. This is the same organization that only 2 years ago was busted for creating bogus Cayman Island shell companies to avoid paying US taxes on 1,000's of it's people working in Iraq!
In March 2008, the Boston Globe reported that KBR had avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in the tax haven of the Cayman Islands. More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies, Service Employers International Inc., and Overseas Administrative Services, which exist on the island only in computer files in an office. KBR acknowledged that the companies were set up "in order to allow us to reduce certain tax obligations of the company and its employees." But KBR does claim the workers as its own with regards to the legal immunity extended to employers working in Iraq.
full wiki here:
I would argue that KBR is quite possibly the scariest, most corrupt, incompetent company ever to embed itself within the core of our military services industry. You may remember KBR as the electrocuting shower installing company, or as the gang rape, then hold woman victim in a shipping container company, or as the guilty of bribing Nigerian officials and thereby having to pay half a billion dollar fine company. Blech - the list seriously goes on and on.
Without any real details in the case, it sounds to me like KBR is totally busted. I doubt a case would have been brought if it weren't a sure thing. I can only hope this heralds the beginning of severing ALL government ties with KBR, formerly Kellogg, Brown & Root (seriously - they changed their name to just KBR), formerly a subsidiary of a corporation whose CEO was Dick Cheney (Halliburton).
Many kudos, props and thanks to Attorney General Eric Holder for this bold but neccessary legal action! I think both he and Defense Secretary Robert Gates have been working hard to crack down on rampant procurement fraud.
I leave you with one of the creepier passages from KBR's own website:
Honed from our experience with both natural and military contingencies, we are able to generate combat power and logistics sustainment anywhere in the world, including for US military operations under the Logistics Civil Augmentation Program (LOGCAP), a US Army initiative that provides support from civilian contractors to military troops operating in Iraq and Afghanistan. By leveraging our global resources, we successfully execute projects at any time and on any scale.
yowch. link: http://www.kbr.com/...