Ethics, More Money, More Problems
Joseph Raglione
March 11, 2008
Gentle readers of the American Chronicle.
This Washington progress report newsletter arrived yesterday in my email and as instructed I am passing it on to all my online friends.
March 10, 2008 by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster
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ETHICS
More Money, More Problems
With an estimated $16 billion in defense contracts, KBR is by far the largest contractor in Iraq, "with eight times the work of its nearest competitor." The firm has 54,000 people working on its projects in Iraq. Until last year, KBR operated as a subsidiary of Halliburton, the oil services conglomerate over which Vice President Cheney once presided. Prior to the Iraq war, KBR received no-bid contracts from the Bush administration to "rebuild Iraq's oil infrastructure" and to "provide support services to troops." The company has profited handsomely from its sweetheart deals, racking up a $71 million profit in the fourth-quarter of 2007 alone. Yet for all the financial success it has attained, KBR has repeatedly engaged in abusive corporate practices and has shirked its duty to preserve and protect those men and women who are serving on the front lines of war.
DON'T DRINK THE WATER: According to a new report from the Pentagon Inspector General, dozens of American troops in Iraq fell sick at bases using "unmonitored and potentially unsafe" water supplied by KBR. The Associated Press writes that the medical records for troops at one KBR-run site indicated "38 cases of illnesses commonly attributed to problem water. These include skin abscesses, cellulitis, skin infections and diarrhea. Doctors diagnosed 24 of the cases in January and February 2006, the same period when medical officials warned of a rise in bacterial infections at the base." In January 2006, former Halliburton employees accused the company of "supplying contaminated water to American troops and Iraqi civilians at a marine base in Ramadi." In an internal e-mail, a Halliburton employee warned, "The level of contamination was roughly 2x the normal contamination of untreated water from the Euphrates river." Halliburton denied the allegations, and more soldiers continued to fall sick because of the water. Sen. Byron Dorgan (D-ND), who has led investigations in contract abuses, said, "I think it's outrageous that KBR tried to deny that there was a problem, especially when it turned out that there were dozens of U.S. troops reporting water-related illnesses."
DODGING SOCIAL SECURITY AND MEDICARE TAXES: Despite the massive profits KBR has been earning, it has worked hard to shelter those revenues from the U.S. government and its own employees. According a detailed investigation by the Boston Globe, KBR has "avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies" based in the Cayman Islands -- a scheme established by Halliburton under Cheney's tenure. In doing so, the firm deprived KBR employees of guaranteed future retirement benefits and unemployment insurance should they lose their jobs. Since at least 2004, the Pentagon has known about KBR's practices, but has chosen to ignore the issue. The use of the shell companies to divert millions from Social Security and Medicare gives KBR an unfair advantage over its rivals, almost all of whom pay the federal taxes. "It is both shocking and disappointing that some American companies continue to exploit our system in wartime by setting up shell corporations via a tax haven mailbox," said Rep. Richard Neal (D-MA). "You have to wonder why the Pentagon continues to do business with these contractors who skirt the rules."
This Washington progress report newsletter arrived yesterday in my email and as instructed I am passing it on to all my online friends.
March 10, 2008 by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster
Contact Us | Tell-a-Friend | Archives | Permalink
ETHICS
More Money, More Problems
With an estimated $16 billion in defense contracts, KBR is by far the largest contractor in Iraq, "with eight times the work of its nearest competitor." The firm has 54,000 people working on its projects in Iraq. Until last year, KBR operated as a subsidiary of Halliburton, the oil services conglomerate over which Vice President Cheney once presided. Prior to the Iraq war, KBR received no-bid contracts from the Bush administration to "rebuild Iraq's oil infrastructure" and to "provide support services to troops." The company has profited handsomely from its sweetheart deals, racking up a $71 million profit in the fourth-quarter of 2007 alone. Yet for all the financial success it has attained, KBR has repeatedly engaged in abusive corporate practices and has shirked its duty to preserve and protect those men and women who are serving on the front lines of war.
DON'T DRINK THE WATER: According to a new report from the Pentagon Inspector General, dozens of American troops in Iraq fell sick at bases using "unmonitored and potentially unsafe" water supplied by KBR. The Associated Press writes that the medical records for troops at one KBR-run site indicated "38 cases of illnesses commonly attributed to problem water. These include skin abscesses, cellulitis, skin infections and diarrhea. Doctors diagnosed 24 of the cases in January and February 2006, the same period when medical officials warned of a rise in bacterial infections at the base." In January 2006, former Halliburton employees accused the company of "supplying contaminated water to American troops and Iraqi civilians at a marine base in Ramadi." In an internal e-mail, a Halliburton employee warned, "The level of contamination was roughly 2x the normal contamination of untreated water from the Euphrates river." Halliburton denied the allegations, and more soldiers continued to fall sick because of the water. Sen. Byron Dorgan (D-ND), who has led investigations in contract abuses, said, "I think it's outrageous that KBR tried to deny that there was a problem, especially when it turned out that there were dozens of U.S. troops reporting water-related illnesses."
DODGING SOCIAL SECURITY AND MEDICARE TAXES: Despite the massive profits KBR has been earning, it has worked hard to shelter those revenues from the U.S. government and its own employees. According a detailed investigation by the Boston Globe, KBR has "avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies" based in the Cayman Islands -- a scheme established by Halliburton under Cheney's tenure. In doing so, the firm deprived KBR employees of guaranteed future retirement benefits and unemployment insurance should they lose their jobs. Since at least 2004, the Pentagon has known about KBR's practices, but has chosen to ignore the issue. The use of the shell companies to divert millions from Social Security and Medicare gives KBR an unfair advantage over its rivals, almost all of whom pay the federal taxes. "It is both shocking and disappointing that some American companies continue to exploit our system in wartime by setting up shell corporations via a tax haven mailbox," said Rep. Richard Neal (D-MA). "You have to wonder why the Pentagon continues to do business with these contractors who skirt the rules."
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