Something I found today on POGO follows..  There seems to be a pattern of seeking no accountability for contractor’s malevolent actions.  KBR (Halliburton) has a disgraceful record in the Middle East.  Is this another such corrupt action taken by government, in this case DoD,  to hold these contractors harmless for their crimes?  Could something be in the works for other contractors? 

Read the articles posted previously on this blog regarding the unfortunate experiences of Boeing International Support Systems employee, Robin Petersen, and his being held captive by BISS and Saudi Arabia and not be allowed to return to the U.S. for medical help after he was injured while doing the job he was hired to do by this Boeing wholly owned subsidiary while in Saudi Arabia.  Boeing’s evasion of Petersen’s attorney serving Boeing/BISS the summons and paperwork for Petersen’s lawsuit is certainly interesting in light of all of this.

Think back to Druyan and Sears and the Tanker scandal and Boeing getting Eric Holder’s help in putting into place a non-prosecution agreement.  As long as Boeing offered up victims, of lower managers or employees, Boeing Corporate itself would not be held accountable or be barred from receiving contracts in the future.  Handy, yes?  Is there some other smoke and mirrors thing starting to manifest itself again?  This time it would be DoD writing off accountability for contractors and their actions.  GFS



Oct 01, 2010

Secret Deals May Lead to Bailouts for Defense Contractor Misconduct

We may be unknowingly bailing out defense contractors such as KBR for the harm they cause, according to Rep. Earl Blumenauer, D-Ore.

This week, Blumenauer, along with Rep. Kurt Schrader, D-Ore., and Sens. Ron Wyden, D-Ore., and Jeff Merkley, D-Ore., introduced the Accountability for Defense Contractors Act. This bill would increase transparency and accountability in defense contracting by regulating the Pentagon’s use of classified contract provisions that indemnify contractors from damage lawsuits. It would require the Secretary of Defense to notify Congress when accepting liability in excess of $1 million on behalf of a contractor. It also would prohibit indemnification in cases where the contractor acted with “gross negligence, willful misconduct, or lack of good faith” or the harm resulted from “an unusually hazardous or nuclear risk not specified in the terms of the contract and discovered on the site where the contract is performed, or that reasonably should have been discovered.”

Last year, several Oregon National Guard veterans sued KBR for knowingly exposing them to a cancer-causing substance called hexavalent chromium while protecting KBR employees who were restoring a water treatment plant in Iraq in 2003. It was discovered during the course of litigation that KBR’s Restore Iraqi Oil (RIO) contract with the U.S. Army contains a classified clause indemnifying KBR for any property damage, injury or death occurring at all KBR worksites. Similar lawsuits against KBR have been filed by current and former National Guard members from Indiana and West Virginia who were also stationed at the water treatment plant in the early months of the war. This means the Army (i.e. the taxpayer) could be hit with millions of dollars in costs and damages.

Last month, Army Secretary John McHugh refused to declassify the KBR indemnification clause in his response to Blumenauer’s inquiry, but he insisted that, apart from the RIO contract, no other Army contracts awarded to companies operating in contingency situations since 2001 contain indemnification provisions. Left unsaid, of course, is whether the other service branches and units of the Department of Defense, to say nothing of other federal agencies, are providing secret indemnity to their contractors.

“The Army considers the use of indemnification provisions only in extraordinary circumstances involving unusually hazardous risks,” McHugh wrote. He also assured Blumenauer that KBR has not yet asserted any claim—and the Army has not made any payments—under the provision.

We’re glad to see Members of Congress addressing this issue and we support the Accountability for Defense Contractors Act. But we’re not convinced that contractors need immunity for wrongdoing. We’re also still left wondering: If certain government functions require perks such as secret grants of legal immunity in order to get the private sector to perform them, why are these functions even considered suitable for outsourcing in the first place?

n      Neil Gordon

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