The government has arrested a contractor and a former federal official on charges of corrupt contracting practices in Iraq.
An American businessman, Philip Bloom, is accused of conspiring with the official to rig the bids on more than $13 million in contracts that he won. He also allegedly paid hundreds of thousands of dollars in gifts to the official and others to win contracts.
The official, Robert Stein, was comptroller and funding officer for the Coalition Provisional Authority in South Central Iraq in 2003 and 2004.
Bloom and Stein are charged with conspiring to commit money laundering and wire fraud in connection with a bribery and fraud scheme, the Justice Department said in a Nov. 17 announcement.
Bloom owned numerous construction and service companies doing business in Iraq. The case is before the U.S. District Court in the District of Columbia.
The Justice Department is weighing another possible criminal case related to Iraq contracting, according to a letter released Nov. 14 by Sen. Byron Dorgan, D-N.D.
Justice is weighing claims by Bunnatine Greenhouse, principal assistant for contracting at the Army Corps of Engineers, of abuses in connection with a contract to Halliburton division Kellogg, Brown and Root, according to the letter to Dorgan from the Defense Department inspector general?s office.
A company spokeswoman, Melissa Norcross, said KBR ?continues to cooperate fully with the Justice Department?s investigation of certain issues pertaining to our work in Iraq? and said the company?s contracting practices are within bounds.
Friday, November 25, 2005
Saturday, November 19, 2005
Ex-Halliburton Employee Gets Jail Sentence
Saturday, November 19, 2005
ROCK ISLAND, Ill. - A federal judge sentenced a former employee of a Halliburton subsidiary to 15 months in prison Friday for accepting more than $100,000 in kickbacks from an Iraqi company that was awarded a construction contract in Iraq.
Glenn Allen Powell, 40, of Cedar Park, Texas, was also ordered to pay restitution of $91,000. He pleaded guilty in August to fraud and violating an anti-kickback law.
Prosecutors said he was a subcontracts administrator for Halliburton subsidiary KBR Inc., which provides engineering and other project management services for the military.
In exchange for $110,300 in kickbacks, Powell recommended the Iraqi company for a $609,000 subcontract to renovate four buildings, prosecutors said. They declined to name the company.
An internal investigation by KBR in January uncovered the kickbacks.
Halliburton has said it removed the Iraqi company from its list of subcontractors and gave the military a credit for the amount of the kickback.
The case was prosecuted in Illinois because the Army Field Support Command at the Rock Island Arsenal oversees the military contract with KBR.
A service of the Associated Press(AP)
ROCK ISLAND, Ill. - A federal judge sentenced a former employee of a Halliburton subsidiary to 15 months in prison Friday for accepting more than $100,000 in kickbacks from an Iraqi company that was awarded a construction contract in Iraq.
Glenn Allen Powell, 40, of Cedar Park, Texas, was also ordered to pay restitution of $91,000. He pleaded guilty in August to fraud and violating an anti-kickback law.
Prosecutors said he was a subcontracts administrator for Halliburton subsidiary KBR Inc., which provides engineering and other project management services for the military.
In exchange for $110,300 in kickbacks, Powell recommended the Iraqi company for a $609,000 subcontract to renovate four buildings, prosecutors said. They declined to name the company.
An internal investigation by KBR in January uncovered the kickbacks.
Halliburton has said it removed the Iraqi company from its list of subcontractors and gave the military a credit for the amount of the kickback.
The case was prosecuted in Illinois because the Army Field Support Command at the Rock Island Arsenal oversees the military contract with KBR.
A service of the Associated Press(AP)
Halliburton Allegations Are Sent to Justice Dept.
No-Bid Contracts In Iraq Are at Issue
By Renae Merle
Washington Post Staff Writer
Saturday, November 19, 2005; A15
An investigative arm of the Pentagon has sent an Army Corps of Engineers whistle-blower's allegations of wrongdoing against Halliburton Co. to the Justice Department.
Bunnatine H. Greenhouse was removed from her position as the Corps of Engineers' top procurement official in August after raising concerns over the volume of Iraq-related work given to the Houston-based oil-services giant without competition. She is appealing.
Kellogg, Brown & Root, a Halliburton subsidiary, had a competitively awarded contract to provide logistics support for the military in the Middle East and was awarded a no-bid contract to repair Iraq oil fields.
The Defense Criminal Investigative Service, the criminal investigative arm of the Pentagon inspector general, investigated her charges and "has shared its findings" with the Justice Department, John R. Crane, assistant inspector general, said in a letter to Sen. Byron L. Dorgan (D-N.D.). "The DOJ is in the process of considering whether to pursue the matter," the letter said.
"This is the first evidence that someone is taking seriously these allegations," said Dorgan, chairman of the Democratic Policy Committee, which heard Greenhouse in June.
Two former Halliburton workers have been charged with taking kickbacks while working for the company in the Middle East. And Pentagon auditors have questioned more than $1billion in costs for the company's work there.
"The company continues to cooperate fully with the Justice Department's investigation of certain issues pertaining to our work in Iraq," Halliburton said in a written statement. "As the investigation is ongoing, it would be inappropriate to comment further at this time."
� 2005 The Washington Post Company
By Renae Merle
Washington Post Staff Writer
Saturday, November 19, 2005; A15
An investigative arm of the Pentagon has sent an Army Corps of Engineers whistle-blower's allegations of wrongdoing against Halliburton Co. to the Justice Department.
Bunnatine H. Greenhouse was removed from her position as the Corps of Engineers' top procurement official in August after raising concerns over the volume of Iraq-related work given to the Houston-based oil-services giant without competition. She is appealing.
Kellogg, Brown & Root, a Halliburton subsidiary, had a competitively awarded contract to provide logistics support for the military in the Middle East and was awarded a no-bid contract to repair Iraq oil fields.
The Defense Criminal Investigative Service, the criminal investigative arm of the Pentagon inspector general, investigated her charges and "has shared its findings" with the Justice Department, John R. Crane, assistant inspector general, said in a letter to Sen. Byron L. Dorgan (D-N.D.). "The DOJ is in the process of considering whether to pursue the matter," the letter said.
"This is the first evidence that someone is taking seriously these allegations," said Dorgan, chairman of the Democratic Policy Committee, which heard Greenhouse in June.
Two former Halliburton workers have been charged with taking kickbacks while working for the company in the Middle East. And Pentagon auditors have questioned more than $1billion in costs for the company's work there.
"The company continues to cooperate fully with the Justice Department's investigation of certain issues pertaining to our work in Iraq," Halliburton said in a written statement. "As the investigation is ongoing, it would be inappropriate to comment further at this time."
� 2005 The Washington Post Company
Friday, November 18, 2005
Halliburton Case Is Referred to Justice Dept., Senator Says - New York Times
By ERIK ECKHOLM
Pentagon investigators have referred allegations of abuse in how the Halliburton Company was awarded a contract for work in Iraq to the Justice Department for possible criminal investigation, a Democratic senator who has been holding unofficial hearings on contract abuses in Iraq said yesterday in Washington.
The allegations mainly involve the Army's secret, noncompetitive awarding in 2003 of a multibillion dollar contract for oil field repairs in Iraq to Halliburton, a Texas-based company. The objections were raised publicly last year by Bunnatine H. Greenhouse, then the chief contracts monitor at the Army Corps of Engineers, the government agency that handled the contract and several others in Iraq.
In a letter received and released yesterday by Senator Byron L. Dorgan, Democrat of North Dakota, the assistant Pentagon inspector general, John R. Crane, said that the criminal investigation service of the Defense Department had examined Ms. Greenhouse's allegations "and has shared its findings with the Department of Justice." Senator Dorgan is the chairman of the Democratic Policy Committee, a Congressional group that has repeatedly used unofficial hearings to question the administration's record of awarding contracts in Iraq.
The Justice Department, the letter said, "is in the process of considering whether to pursue the matter."
Ms. Greenhouse, a 20-year veteran of military procurement work, says her objections before the contract was signed were ignored. After internal clashes with officials at the agency and threats of demotion, she went public with her charges in the fall of 2004.
This year, she was demoted in August from the elite Senior Executive Service, on charges of poor performance, and given a lower-ranking job as a project manager. She has filed appeals, but for now "she has no projects to manage and she just sits in the corner," her attorney, Michael Kohn, said yesterday in a telephone interview from Washington. The inspector general's office at the Defense Department had already begun its own investigation of her charges regarding the contracting. Exactly which issues are of most interest to investigators in the Justice Department is unclear. Mr. Crane wrote that he could not provide more details "as this is an ongoing criminal investigation."
Melissa Norcross, a spokeswoman for Halliburton, said in an e-mail message, "The company continues to cooperate fully with the Justice Department's investigation of certain issues pertaining to our work in Iraq."
In letters to senior Army officials and in public testimony, Ms. Greenhouse said that in early 2003 the Corps had violated procedures when it secretly awarded a five-year, potentially $7 billion contract for oil field repairs to a Halliburton subsidiary, Kellogg Brown & Root.
Among other things, the same company had been secretly hired months earlier to draw up a plan for the job, she said. She also said that even if the urgency of war required dispensing with competitive bidding, the duration of the contract should have been shorter. She objected again in December 2003, when officials granted a waiver to Kellogg Brown & Root, approving the high prices it had paid to import fuel from Kuwait. Other Pentagon agencies said the company had paid tens of millions of dollars too much, without offering any justification for the payments.
In her e-mail message, Ms. Norcross said, "KBR will continue to work with our customers and the appropriate government agencies to demonstrate, once and for all, that KBR delivered vital services for the U.S. troops and the Iraqi people within the appropriate bounds of government contracting and at a fair and reasonable cost, given the circumstances."
Pentagon investigators have referred allegations of abuse in how the Halliburton Company was awarded a contract for work in Iraq to the Justice Department for possible criminal investigation, a Democratic senator who has been holding unofficial hearings on contract abuses in Iraq said yesterday in Washington.
The allegations mainly involve the Army's secret, noncompetitive awarding in 2003 of a multibillion dollar contract for oil field repairs in Iraq to Halliburton, a Texas-based company. The objections were raised publicly last year by Bunnatine H. Greenhouse, then the chief contracts monitor at the Army Corps of Engineers, the government agency that handled the contract and several others in Iraq.
In a letter received and released yesterday by Senator Byron L. Dorgan, Democrat of North Dakota, the assistant Pentagon inspector general, John R. Crane, said that the criminal investigation service of the Defense Department had examined Ms. Greenhouse's allegations "and has shared its findings with the Department of Justice." Senator Dorgan is the chairman of the Democratic Policy Committee, a Congressional group that has repeatedly used unofficial hearings to question the administration's record of awarding contracts in Iraq.
The Justice Department, the letter said, "is in the process of considering whether to pursue the matter."
Ms. Greenhouse, a 20-year veteran of military procurement work, says her objections before the contract was signed were ignored. After internal clashes with officials at the agency and threats of demotion, she went public with her charges in the fall of 2004.
This year, she was demoted in August from the elite Senior Executive Service, on charges of poor performance, and given a lower-ranking job as a project manager. She has filed appeals, but for now "she has no projects to manage and she just sits in the corner," her attorney, Michael Kohn, said yesterday in a telephone interview from Washington. The inspector general's office at the Defense Department had already begun its own investigation of her charges regarding the contracting. Exactly which issues are of most interest to investigators in the Justice Department is unclear. Mr. Crane wrote that he could not provide more details "as this is an ongoing criminal investigation."
Melissa Norcross, a spokeswoman for Halliburton, said in an e-mail message, "The company continues to cooperate fully with the Justice Department's investigation of certain issues pertaining to our work in Iraq."
In letters to senior Army officials and in public testimony, Ms. Greenhouse said that in early 2003 the Corps had violated procedures when it secretly awarded a five-year, potentially $7 billion contract for oil field repairs to a Halliburton subsidiary, Kellogg Brown & Root.
Among other things, the same company had been secretly hired months earlier to draw up a plan for the job, she said. She also said that even if the urgency of war required dispensing with competitive bidding, the duration of the contract should have been shorter. She objected again in December 2003, when officials granted a waiver to Kellogg Brown & Root, approving the high prices it had paid to import fuel from Kuwait. Other Pentagon agencies said the company had paid tens of millions of dollars too much, without offering any justification for the payments.
In her e-mail message, Ms. Norcross said, "KBR will continue to work with our customers and the appropriate government agencies to demonstrate, once and for all, that KBR delivered vital services for the U.S. troops and the Iraqi people within the appropriate bounds of government contracting and at a fair and reasonable cost, given the circumstances."
Tuesday, November 15, 2005
Salon.com News | Gulf Coast slaves
Halliburton and its subcontractors hired hundreds of undocumented Latino workers to clean up after Katrina -- only to mistreat them and throw them out without pay.
By Roberto Lovato
Nov. 15, 2005 | Arnulfo Martinez recalls seeing lots of hombres del ejercito standing at attention. Though he was living on the Belle Chasse Naval Base near New Orleans when President Bush spoke there on Oct. 11, he didn't understand anything the ruddy man in the rolled-up sleeves was saying to the troops.
Martinez, 16, speaks no English; his mother tongue is Zapotec. He had left the cornfields of Oaxaca, Mexico, four weeks earlier for the promise that he would make $8 an hour, plus room and board, while working for a subcontractor of KBR, a wholly owned subsidiary of Halliburton that was awarded a major contract by the Bush administration for disaster relief work. The job was helping to clean up a Gulf Coast naval base in the region devastated by Hurricane Katrina. "I was cleaning up the base, picking up branches and doing other work," Martinez said, speaking to me in broken Spanish.
Even if the Oaxacan teenager had understood Bush when he urged Americans that day to "help somebody find shelter or help somebody find food," he couldn't have known that he'd soon need similar help himself. But three weeks after arriving at the naval base from Texas, Martinez's boss, Karen Tovar, a job broker from North Carolina who hired workers for a KBR subcontractor called United Disaster Relief, booted him from the base and left him homeless, hungry and without money.
"They gave us two meals a day and sometimes only one," Martinez said.
He says that Tovar "kicked us off the base," forcing him and other cleanup workers -- many of them Mexican and undocumented -- to sleep on the streets of New Orleans. According to Martinez, they were not paid for three weeks of work. An immigrant rights group recently filed complaints with the Department of Labor on behalf of Martinez and 73 other workers allegedly owed more than $56,000 by Tovar. Tovar claims that she let the workers go because she was not paid by her own bosses at United Disaster Relief. In turn, UDR manager Zachary Johnson, who declined to be interviewed for this story, told the Washington Post on Nov. 4 that his company had not been paid by KBR for two months.
Wherever the buck may stop along the chain of subcontractors, Martinez is stuck at the short end of it -- and his situation is typical among many workers hired by subcontractors of KBR (formerly known as Kellogg Brown & Root) to clean and rebuild Belle Chasse and other Gulf Coast military bases. Immigrants rights groups and activists like Bill Chandler, president of the Mississippi Immigrant Rights Alliance, estimate that hundreds of undocumented workers are on the Gulf Coast military bases, a claim that the military and Halliburton/KBR deny -- even after the Immigration and Customs Enforcement agency turned up undocumented workers in a raid of the Belle Chasse facility last month. Visits to the naval bases and dozens of interviews by Salon confirm that undocumented workers are in the facilities. Still, tracing the line from unpaid undocumented workers to their multibillion-dollar employers is a daunting task. A shadowy labyrinth of contractors, subcontractors and job brokers, overseen by no single agency, have created a no man's land where nobody seems to be accountable for the hiring -- and abuse -- of these workers.
Right after Katrina barreled through the Gulf Coast, the Bush administration relaxed labor standards, creating conditions for rampant abuse, according to union leaders and civil rights advocates. Bush suspended the Davis-Bacon Act, which requires employers to pay "prevailing wages" for labor used to fulfill government contracts. The administration also waived the requirement for contractors rebuilding the Gulf Coast to provide valid I-9 employment eligibility forms completed by their workers. These moves allowed Halliburton/KBR and its subcontractors to hire undocumented workers and pay them meager wages (regardless of what wages the workers may have otherwise been promised). The two policies have recently been reversed in the face of sharp political pressure: Bush reinstated the Davis-Bacon Act on Nov. 3, while the Department of Homeland Security reinstated the I-9 requirements in late October, noting that it would once again "exercise prosecutorial discretion" of employers in violation "on a case-by-case basis." But critics say Bush's policies have already allowed extensive profiteering beneath layers of legal and political cover.
Halliburton/KBR, which enjoys an array of federal contracts in the United States, Iraq and Guant?namo Bay, Cuba, has long drawn criticism for its proximity to Vice President Dick Cheney, formerly Halliburton's CEO. Halliburton/KBR spokesperson Melissa Norcross declined to respond directly to allegations about undocumented workers in the Gulf. "In performing work for the U.S. government, KBR uses its government-approved procurement system to source and retain qualified subcontractors," she said in an e-mail. "KBR's subcontractors are required to comply with all applicable labor laws and provisions when performing this work."
Victoria Cintra is the Gulf Coast outreach organizer for Mississippi Immigrant Rights Alliance, which recently partnered with relief agency Oxfam America to help immigrant workers displaced by Katrina. She says KBR is exposing undocumented workers like Martinez to unethical and illegal treatment, even though they are supposed to be paid with federal Katrina-recovery dollars to clean and rebuild high-security facilities like the one President Bush recently visited. Cintra is one of several people fighting to recover the wages owed the workers: She drives her beat-up, chocolate-colored car across the swamps, damaged roads and broken bridges of the Gulf Coast to track down contractors and subcontractors. With yellow legal pad in hand, she and other advocates document abuses taking place at Belle Chasse, the Naval Construction Battalion Center at the Seabee naval base in Gulfport, Miss., and other military installations.
I was with Cintra when she received phone calls from several Latino workers who complained they were denied, under threat of deportation, the right to leave the base at Belle Chasse. Cintra also took me along on visits to squalid trailer parks -- like the one at Arlington Heights in Gulfport -- where up to 19 unpaid, unfed and undocumented KBR site workers inhabited a single trailer for $70 per person, per week. Workers there and on the bases complained of suffering from diarrhea, sprained ankles, cuts and bruises, and other injuries sustained on the KBR sites -- where they received no medical assistance, despite being close to medical facilities on the same bases they were cleaning and helping rebuild.
Cintra and other critics say there's been no accountability from the corporate leaders who signed on the dotted line when they were awarded multimillion-dollar Department of Defense contracts. "The workers may be hired by the subcontractors," Cintra says, "but KBR is ultimately responsible."
"Latino workers are being invited to New Orleans and the South without the proper conditions to protect them," adds Cintra, who recently provided tents to Martinez and several other unpaid Mexican workers who fled Belle Chasse for Gulfport after being dismissed by Tovar. Cintra, a Cuban exile and born-again Christian, has since seen a small tent city of homeless immigrants spring up in the yard of her church, Pass Road Baptist, in Gulfport. "This is evil on top of evil on top of evil," she says. "The Bush administration and Halliburton have opened up a Pandora's box that's not going to close now."
Halliburton/KBR is the general contractor with overarching responsibility for the federal cleanup contracts covering Katrina-damaged naval bases. Even so, there is an utter lack of transparency with the process -- and that invites malfeasance, says James Hale, a vice president of the Laborers' International Union of North America. "To my knowledge, not one member of Congress has been able to get their hands on a copy of a contract that was handed out to Halliburton or others," Hale says. "There is no central registry of Katrina contracts available. No data on the jobs or scope of the work." Hale says that his union's legislative staff has pressed members of Congress for more information; apparently the legislators were told that they could not get copies of the contracts because of "national security" concerns.
"If the contracts handed out to these primary contractors are opaque, then the contracts being let to the subcontractors are just plain invisible," Hale says. "There is simply no ability to ascertain or monitor the contractor-subcontractor relationships. This is an open invitation for exploitation, fraud and abuse."
Congress has heard a number of complaints recently about Halliburton/KBR's hiring practices, including the alleged exploitation of Filipino, Sri Lankan, Nepalese and other immigrant workers paid low wages on military installations in Iraq. And KBR subcontractor BE&K was a focus of Senate hearings in October, for the firing of 75 local Belle Chasse workers who said that they were replaced by "unskilled, out-of-state, out-of-country" workers earning $8 to $14 for work that typically paid $22 an hour.
Sen. Mary Landrieu, D-La., who has been an outspoken critic of the use of undocumented workers at Belle Chasse and on other Katrina cleanup jobs, said in a recent statement, "It is a downright shame that any contractor would use this tragedy as an opportunity to line its pockets by breaking the law and hiring a low-skilled, low-wage and undocumented work force."
Sen. Carl Levin, D-Mich., is also against the practice, citing its "serious social ramifications." As he told Salon, it devastates "local workers who have been hit twice, because they lost their homes."
Seventeen-year-old Simitrio Martinez (no relation to Arnulfo) is another one of the dozens of workers originally hired by Tovar, the North Carolina job broker working under KBR. "They were going to pay seven dollars an hour, and the food was going to be free, and rent, but they gave us nothing," says the thin Zapotec teenager. Simitrio spent nearly a month at the Seabee base. "They weren't feeding us. We ate cookies for five days. Cookies, nothing else," he says.
Simitrio, his co-workers, and the dozens of KBR subcontractors that employ them operate under public-private agreements like federal Task Order 0017, which defines the scope of work to be fulfilled under the contracts. Under the multimillion-dollar Department of Defense contract, KBR is supposed to provide services for "Hurricane Katrina stabilization and recovery at Naval Air Station Pascagoula, Naval Air Station Gulfport, Stennis Space Center and other Navy installations in the Southeast Region," according to a Defense Department press release.
But the details of the agreements remain murky. "Not only is it very difficult to see the actual signed DoD contracts, but it is nearly impossible to see the actual task orders, which assign the goods or services the government is buying," says Scott Amey, general counsel for the Project on Government Oversight in Washington. The military can ask for goods and services on an as-needed basis, he says, which means that the contracts, which add up to tens of millions of dollars, can remain open ended. According to DoD press statements, the contracts call for considerable manual labor, including "re-roofing of most buildings, barracks, debris removal from the entire base, water mitigation, mold mitigation, interior and exterior repairs to most buildings, waste treatment plants, and all incidental related work."
Simitrio and any other workers on the high-security military bases must get permission before entering the guarded gates, where they get patted down by M-16-wielding military police. Responsibility for getting private-sector construction and cleanup workers on the bases rests with the general contractor -- in KBR's case, security chief Kevin Flynn. One of Flynn's responsibilities is to negotiate passes and entry for KBR subcontractors -- and their hires -- to do the work stipulated by the task order.
Yet, following several complaints by Landrieu, and just a few days after President Bush visited the Belle Chasse base, agents from the Immigration and Customs Enforcement agency raided the facility and detained 10 workers who ICE spokeswoman Jamie Zuieback said had "questionable" documentation.
Representatives of Halliburton/KBR do not acknowledge the existence of undocumented workers providing labor for their operations on the Gulf Coast bases. Flynn suggested speaking to the U.S. military, who he said "has real strict control" and would know whether there were undocumented workers. "We have workers from all ethnic groups on the base," Flynn said. "To the best of my knowledge, there are no undocumented workers."
Steve Romano, head of housing on the Belle Chasse base, said, "We have no relationship with [KBR] at all. I have no idea what that's about." A similar response was given by an official at the base's health facility when asked about undocumented workers who complained about health issues and injuries sustained on the KBR sites. The only military person to acknowledge seeing Latino workers was a watch commander who greeted me at an entry to the base. The commander estimated there were 100 such workers there. Meanwhile, representatives with the Mississippi Immigrant Rights Alliance say they received calls from undocumented workers at Belle Chasse who estimated there were more than 500, or "about eight busloads" of immigrant workers on-site.
Texas-based DRS Cosmotech is another subcontractor that provided cleanup crews to Halliburton/KBR in the Gulf. Roy Lee Donaldson, CEO of the company, refused to respond to accusations of non-payment and exploitation leveled at his company by several workers, including 55-year-old Felipe Reyes of Linares, Nuevo Leon, Mexico. (Donaldson hung up the phone when I identified myself as a reporter.)
"Mr. Donaldson promised us we'd live in a hotel or a house. We lived in tents and only had hot water that smelled like petroleum," Reyes said. The city of Belle Chasse has been identified in recent years as one of the most toxically polluted areas in the entire region, with several major energy companies operating there. A wide range of advocacy groups have warned about serious health risks facing Katrina cleanup workers.
"They didn't want to pay us for two weeks of work. So we stopped working. We started a huelga [strike] on the base" added Reyes, who along with other workers, says he was later paid $1,100 -- only part of what he says he was owed.
Another KBR subcontractor, Alabama-based BE&K, says it is not responsible for keeping track of the workers. BE&K spokesperson Susan Wasley said, "I can't say that we require our subcontractors' employees to produce documentation for us, because that's what our subcontractor as employer has to do. That's his responsibility."
At the bottom of the KBR subcontracting pyramid are job brokers like Tovar and Gregorio Gonzalez, who helped hire laborers for Florida-based On Site Services, another subcontractor that reportedly failed to pay wages owed to workers in the Gulf Coast. The job brokers find workers by placing ads in Spanish-language newspapers like La Subasta and El Dia in Houston; the ads typically promise room, board and pay in the range of $1,200 a week. Job brokers also run television ads on Spanish-language stations like Univision. And they attend job fairs in places like Fresno, Calif.
Not all subcontractors refuse to discuss their links to KBR. Luis Sevilla is pretty open about it if you can get to the crowded hangar on the restricted premises of the Seabee naval base where he and his crew sleep and work. Sevilla put together crews for KBR subcontractors to remove asbestos and do other construction work; his workers told me they are paid and treated well. Asked about the people who own the R.V. with a "KBR" logo outside the hangar where his workers crowd into small tents, Sevilla says, "They contract with many, many companies." Interviews with members of Sevilla's crew revealed a number of undocumented workers.
Despite the evidence of undocumented workers cleaning up after Katrina, Halliburton/KBR maintains that it runs its operations within the bounds of the law. "KBR operates under a rigorous Code of Business Conduct that outlines legal and ethical behaviors that all employees and subcontractors are expected to follow in every aspect of their work," spokesperson Norcross said by e-mail. (She did not respond to several requests for a phone interview.) "We do not tolerate any exceptions to this Code at any level of our company."
Standing in spitting distance of the KBR-branded R.V., which is parked as if it were guarding the hangar, Jose Ruiz of Nicaragua knows that his role in the Katrina cleanup is anonymous at best. "I don't have any papers, kind of like in that song by Sting -- 'I'm an illegal alien,'" says Ruiz, who lived in the United States for many years before arriving to work for Sevilla at the Seabee base. "That's the way it is."
By Roberto Lovato
Nov. 15, 2005 | Arnulfo Martinez recalls seeing lots of hombres del ejercito standing at attention. Though he was living on the Belle Chasse Naval Base near New Orleans when President Bush spoke there on Oct. 11, he didn't understand anything the ruddy man in the rolled-up sleeves was saying to the troops.
Martinez, 16, speaks no English; his mother tongue is Zapotec. He had left the cornfields of Oaxaca, Mexico, four weeks earlier for the promise that he would make $8 an hour, plus room and board, while working for a subcontractor of KBR, a wholly owned subsidiary of Halliburton that was awarded a major contract by the Bush administration for disaster relief work. The job was helping to clean up a Gulf Coast naval base in the region devastated by Hurricane Katrina. "I was cleaning up the base, picking up branches and doing other work," Martinez said, speaking to me in broken Spanish.
Even if the Oaxacan teenager had understood Bush when he urged Americans that day to "help somebody find shelter or help somebody find food," he couldn't have known that he'd soon need similar help himself. But three weeks after arriving at the naval base from Texas, Martinez's boss, Karen Tovar, a job broker from North Carolina who hired workers for a KBR subcontractor called United Disaster Relief, booted him from the base and left him homeless, hungry and without money.
"They gave us two meals a day and sometimes only one," Martinez said.
He says that Tovar "kicked us off the base," forcing him and other cleanup workers -- many of them Mexican and undocumented -- to sleep on the streets of New Orleans. According to Martinez, they were not paid for three weeks of work. An immigrant rights group recently filed complaints with the Department of Labor on behalf of Martinez and 73 other workers allegedly owed more than $56,000 by Tovar. Tovar claims that she let the workers go because she was not paid by her own bosses at United Disaster Relief. In turn, UDR manager Zachary Johnson, who declined to be interviewed for this story, told the Washington Post on Nov. 4 that his company had not been paid by KBR for two months.
Wherever the buck may stop along the chain of subcontractors, Martinez is stuck at the short end of it -- and his situation is typical among many workers hired by subcontractors of KBR (formerly known as Kellogg Brown & Root) to clean and rebuild Belle Chasse and other Gulf Coast military bases. Immigrants rights groups and activists like Bill Chandler, president of the Mississippi Immigrant Rights Alliance, estimate that hundreds of undocumented workers are on the Gulf Coast military bases, a claim that the military and Halliburton/KBR deny -- even after the Immigration and Customs Enforcement agency turned up undocumented workers in a raid of the Belle Chasse facility last month. Visits to the naval bases and dozens of interviews by Salon confirm that undocumented workers are in the facilities. Still, tracing the line from unpaid undocumented workers to their multibillion-dollar employers is a daunting task. A shadowy labyrinth of contractors, subcontractors and job brokers, overseen by no single agency, have created a no man's land where nobody seems to be accountable for the hiring -- and abuse -- of these workers.
Right after Katrina barreled through the Gulf Coast, the Bush administration relaxed labor standards, creating conditions for rampant abuse, according to union leaders and civil rights advocates. Bush suspended the Davis-Bacon Act, which requires employers to pay "prevailing wages" for labor used to fulfill government contracts. The administration also waived the requirement for contractors rebuilding the Gulf Coast to provide valid I-9 employment eligibility forms completed by their workers. These moves allowed Halliburton/KBR and its subcontractors to hire undocumented workers and pay them meager wages (regardless of what wages the workers may have otherwise been promised). The two policies have recently been reversed in the face of sharp political pressure: Bush reinstated the Davis-Bacon Act on Nov. 3, while the Department of Homeland Security reinstated the I-9 requirements in late October, noting that it would once again "exercise prosecutorial discretion" of employers in violation "on a case-by-case basis." But critics say Bush's policies have already allowed extensive profiteering beneath layers of legal and political cover.
Halliburton/KBR, which enjoys an array of federal contracts in the United States, Iraq and Guant?namo Bay, Cuba, has long drawn criticism for its proximity to Vice President Dick Cheney, formerly Halliburton's CEO. Halliburton/KBR spokesperson Melissa Norcross declined to respond directly to allegations about undocumented workers in the Gulf. "In performing work for the U.S. government, KBR uses its government-approved procurement system to source and retain qualified subcontractors," she said in an e-mail. "KBR's subcontractors are required to comply with all applicable labor laws and provisions when performing this work."
Victoria Cintra is the Gulf Coast outreach organizer for Mississippi Immigrant Rights Alliance, which recently partnered with relief agency Oxfam America to help immigrant workers displaced by Katrina. She says KBR is exposing undocumented workers like Martinez to unethical and illegal treatment, even though they are supposed to be paid with federal Katrina-recovery dollars to clean and rebuild high-security facilities like the one President Bush recently visited. Cintra is one of several people fighting to recover the wages owed the workers: She drives her beat-up, chocolate-colored car across the swamps, damaged roads and broken bridges of the Gulf Coast to track down contractors and subcontractors. With yellow legal pad in hand, she and other advocates document abuses taking place at Belle Chasse, the Naval Construction Battalion Center at the Seabee naval base in Gulfport, Miss., and other military installations.
I was with Cintra when she received phone calls from several Latino workers who complained they were denied, under threat of deportation, the right to leave the base at Belle Chasse. Cintra also took me along on visits to squalid trailer parks -- like the one at Arlington Heights in Gulfport -- where up to 19 unpaid, unfed and undocumented KBR site workers inhabited a single trailer for $70 per person, per week. Workers there and on the bases complained of suffering from diarrhea, sprained ankles, cuts and bruises, and other injuries sustained on the KBR sites -- where they received no medical assistance, despite being close to medical facilities on the same bases they were cleaning and helping rebuild.
Cintra and other critics say there's been no accountability from the corporate leaders who signed on the dotted line when they were awarded multimillion-dollar Department of Defense contracts. "The workers may be hired by the subcontractors," Cintra says, "but KBR is ultimately responsible."
"Latino workers are being invited to New Orleans and the South without the proper conditions to protect them," adds Cintra, who recently provided tents to Martinez and several other unpaid Mexican workers who fled Belle Chasse for Gulfport after being dismissed by Tovar. Cintra, a Cuban exile and born-again Christian, has since seen a small tent city of homeless immigrants spring up in the yard of her church, Pass Road Baptist, in Gulfport. "This is evil on top of evil on top of evil," she says. "The Bush administration and Halliburton have opened up a Pandora's box that's not going to close now."
Halliburton/KBR is the general contractor with overarching responsibility for the federal cleanup contracts covering Katrina-damaged naval bases. Even so, there is an utter lack of transparency with the process -- and that invites malfeasance, says James Hale, a vice president of the Laborers' International Union of North America. "To my knowledge, not one member of Congress has been able to get their hands on a copy of a contract that was handed out to Halliburton or others," Hale says. "There is no central registry of Katrina contracts available. No data on the jobs or scope of the work." Hale says that his union's legislative staff has pressed members of Congress for more information; apparently the legislators were told that they could not get copies of the contracts because of "national security" concerns.
"If the contracts handed out to these primary contractors are opaque, then the contracts being let to the subcontractors are just plain invisible," Hale says. "There is simply no ability to ascertain or monitor the contractor-subcontractor relationships. This is an open invitation for exploitation, fraud and abuse."
Congress has heard a number of complaints recently about Halliburton/KBR's hiring practices, including the alleged exploitation of Filipino, Sri Lankan, Nepalese and other immigrant workers paid low wages on military installations in Iraq. And KBR subcontractor BE&K was a focus of Senate hearings in October, for the firing of 75 local Belle Chasse workers who said that they were replaced by "unskilled, out-of-state, out-of-country" workers earning $8 to $14 for work that typically paid $22 an hour.
Sen. Mary Landrieu, D-La., who has been an outspoken critic of the use of undocumented workers at Belle Chasse and on other Katrina cleanup jobs, said in a recent statement, "It is a downright shame that any contractor would use this tragedy as an opportunity to line its pockets by breaking the law and hiring a low-skilled, low-wage and undocumented work force."
Sen. Carl Levin, D-Mich., is also against the practice, citing its "serious social ramifications." As he told Salon, it devastates "local workers who have been hit twice, because they lost their homes."
Seventeen-year-old Simitrio Martinez (no relation to Arnulfo) is another one of the dozens of workers originally hired by Tovar, the North Carolina job broker working under KBR. "They were going to pay seven dollars an hour, and the food was going to be free, and rent, but they gave us nothing," says the thin Zapotec teenager. Simitrio spent nearly a month at the Seabee base. "They weren't feeding us. We ate cookies for five days. Cookies, nothing else," he says.
Simitrio, his co-workers, and the dozens of KBR subcontractors that employ them operate under public-private agreements like federal Task Order 0017, which defines the scope of work to be fulfilled under the contracts. Under the multimillion-dollar Department of Defense contract, KBR is supposed to provide services for "Hurricane Katrina stabilization and recovery at Naval Air Station Pascagoula, Naval Air Station Gulfport, Stennis Space Center and other Navy installations in the Southeast Region," according to a Defense Department press release.
But the details of the agreements remain murky. "Not only is it very difficult to see the actual signed DoD contracts, but it is nearly impossible to see the actual task orders, which assign the goods or services the government is buying," says Scott Amey, general counsel for the Project on Government Oversight in Washington. The military can ask for goods and services on an as-needed basis, he says, which means that the contracts, which add up to tens of millions of dollars, can remain open ended. According to DoD press statements, the contracts call for considerable manual labor, including "re-roofing of most buildings, barracks, debris removal from the entire base, water mitigation, mold mitigation, interior and exterior repairs to most buildings, waste treatment plants, and all incidental related work."
Simitrio and any other workers on the high-security military bases must get permission before entering the guarded gates, where they get patted down by M-16-wielding military police. Responsibility for getting private-sector construction and cleanup workers on the bases rests with the general contractor -- in KBR's case, security chief Kevin Flynn. One of Flynn's responsibilities is to negotiate passes and entry for KBR subcontractors -- and their hires -- to do the work stipulated by the task order.
Yet, following several complaints by Landrieu, and just a few days after President Bush visited the Belle Chasse base, agents from the Immigration and Customs Enforcement agency raided the facility and detained 10 workers who ICE spokeswoman Jamie Zuieback said had "questionable" documentation.
Representatives of Halliburton/KBR do not acknowledge the existence of undocumented workers providing labor for their operations on the Gulf Coast bases. Flynn suggested speaking to the U.S. military, who he said "has real strict control" and would know whether there were undocumented workers. "We have workers from all ethnic groups on the base," Flynn said. "To the best of my knowledge, there are no undocumented workers."
Steve Romano, head of housing on the Belle Chasse base, said, "We have no relationship with [KBR] at all. I have no idea what that's about." A similar response was given by an official at the base's health facility when asked about undocumented workers who complained about health issues and injuries sustained on the KBR sites. The only military person to acknowledge seeing Latino workers was a watch commander who greeted me at an entry to the base. The commander estimated there were 100 such workers there. Meanwhile, representatives with the Mississippi Immigrant Rights Alliance say they received calls from undocumented workers at Belle Chasse who estimated there were more than 500, or "about eight busloads" of immigrant workers on-site.
Texas-based DRS Cosmotech is another subcontractor that provided cleanup crews to Halliburton/KBR in the Gulf. Roy Lee Donaldson, CEO of the company, refused to respond to accusations of non-payment and exploitation leveled at his company by several workers, including 55-year-old Felipe Reyes of Linares, Nuevo Leon, Mexico. (Donaldson hung up the phone when I identified myself as a reporter.)
"Mr. Donaldson promised us we'd live in a hotel or a house. We lived in tents and only had hot water that smelled like petroleum," Reyes said. The city of Belle Chasse has been identified in recent years as one of the most toxically polluted areas in the entire region, with several major energy companies operating there. A wide range of advocacy groups have warned about serious health risks facing Katrina cleanup workers.
"They didn't want to pay us for two weeks of work. So we stopped working. We started a huelga [strike] on the base" added Reyes, who along with other workers, says he was later paid $1,100 -- only part of what he says he was owed.
Another KBR subcontractor, Alabama-based BE&K, says it is not responsible for keeping track of the workers. BE&K spokesperson Susan Wasley said, "I can't say that we require our subcontractors' employees to produce documentation for us, because that's what our subcontractor as employer has to do. That's his responsibility."
At the bottom of the KBR subcontracting pyramid are job brokers like Tovar and Gregorio Gonzalez, who helped hire laborers for Florida-based On Site Services, another subcontractor that reportedly failed to pay wages owed to workers in the Gulf Coast. The job brokers find workers by placing ads in Spanish-language newspapers like La Subasta and El Dia in Houston; the ads typically promise room, board and pay in the range of $1,200 a week. Job brokers also run television ads on Spanish-language stations like Univision. And they attend job fairs in places like Fresno, Calif.
Not all subcontractors refuse to discuss their links to KBR. Luis Sevilla is pretty open about it if you can get to the crowded hangar on the restricted premises of the Seabee naval base where he and his crew sleep and work. Sevilla put together crews for KBR subcontractors to remove asbestos and do other construction work; his workers told me they are paid and treated well. Asked about the people who own the R.V. with a "KBR" logo outside the hangar where his workers crowd into small tents, Sevilla says, "They contract with many, many companies." Interviews with members of Sevilla's crew revealed a number of undocumented workers.
Despite the evidence of undocumented workers cleaning up after Katrina, Halliburton/KBR maintains that it runs its operations within the bounds of the law. "KBR operates under a rigorous Code of Business Conduct that outlines legal and ethical behaviors that all employees and subcontractors are expected to follow in every aspect of their work," spokesperson Norcross said by e-mail. (She did not respond to several requests for a phone interview.) "We do not tolerate any exceptions to this Code at any level of our company."
Standing in spitting distance of the KBR-branded R.V., which is parked as if it were guarding the hangar, Jose Ruiz of Nicaragua knows that his role in the Katrina cleanup is anonymous at best. "I don't have any papers, kind of like in that song by Sting -- 'I'm an illegal alien,'" says Ruiz, who lived in the United States for many years before arriving to work for Sevilla at the Seabee base. "That's the way it is."
Sunday, November 13, 2005
Reuters AlertNet - CORRECTED - U.S. reconstruction chief challenged by Iraqis
Source: Reuters
In BAGHDAD story headlined "U.S. reconstruction chief challenged by Iraqis" please read in paragraph eight ... when temperatures rose above 120 degrees Fahrenheit (around 49 Celsius) ... instead of ... when temperatures rose above 120 degrees Fahrenheit (around 40 Celsius) ... (correcting temperature conversion).
A corrected version follows.
By Claudia Parsons
BAGHDAD, Nov 13 (Reuters) - Iraqi perceptions that not enough is being done to rebuild the country after the U.S.-led invasion are simply a case of bad public relations, Washington's new reconstruction chief said on Sunday.
Challenged by Iraqi reporters at his first news conference since he arrived in Baghdad to head the U.S. embassy's Iraq Reconstruction Management Office, Dan Speckhart listed a string of U.S.-funded projects covering health, education, transport, water and electricity generation.
"I recognise some people are frustrated perhaps that it's not moving as fast as they would like but the basis is there," Speckhart responded when asked why there was little evidence of progress in Baghdad, where electricity is erratic at best.
Speckhart said more than half of a $2.8 billion reconstruction programme in the capital had gone towards infrastructure projects, such as electricity, water and sewage.
"This is a big challenge. There's been more than 30 years of decay and neglect that has run down the infrastructure tremendously," Speckhart said, adding that demand for electricity was also rising as Iraqis buy more fridges, air conditioners and other appliances previously in short supply.
Speckhart said roughly half the electricity generation in Iraq now was the result of U.S.-funded projects; that 350 water and sewage treatment projects had been undertaken; and that 700 schools had been renovated.
In July a report by the U.S. Congress' investigative arm said that as of May 2005, power generation in Iraq was at a lower level than before the U.S. invasion of Iraq in March 2003.
Many Iraqis spend whole evenings without power, and last summer, when temperatures rose above 120 degrees Fahrenheit (around 49 Celsius), families were making do with about eight hours of power a day, two hours on and then four off.
Iraq's oil output, which U.S. officials initially said would help pay for rebuilding projects, had also dropped in the past two years, the Government Accountability Office report said.
During the 2003 U.S.-led invasion, there was extensive damage to buildings, including the telecommunications system, bridges and other infrastructure, while electricity and oil installations suffered from a decade of international sanctions.
LARGEST RECONSTRUCTION PROGRAMME
Speckhart described the $30 billion rebuilding programme funded by the U.S. and other international donors as "the largest reconstruction programme for a single country in the history of the world". But he said even that was only a start, and further international help would be needed.
Another Iraqi reporter asked him about a recommendation by a U.N. watchdog agency that Washington should repay $208 million in apparent overcharges paid to a Halliburton Co. subsidiary.
Speckhart said the problem was much of the U.S.-funded work done was not visible enough. "I wish I had time to take you all on field trips," he told the reporters.
"I understand it's a big country and it's not happening as fast as Iraqis would like, but it is happening," he said.
Pressed by a third reporter about an unfinished hospital project in a Shi'ite district in Baghdad, Speckhart said penalties for companies would depend on their contract.
"Sometimes in Iraq there can be delays that are not the fault of the companies," he said.
A report by the U.S. special inspector general for Iraq reconstruction at the end of October said more than a quarter of all reconstruction funds had been spent on security costs to protect contractors, hundreds of whom have died in Iraq. That eats away at what ends up being spent on Iraq and Iraqis.
"We're trying to build and the terrorists are trying to destroy," Speckhart said, adding that U.S. authorities often did not publicise successes to avoid attracting attacks.
"Part of the challenge we have faced is we haven't advertised what we're doing in all these places," he said.
Speckhart said reporters who questioned why so many contracts had gone to U.S. firms, such as Halliburton, a company once led by Vice President Dick Cheney, were misinformed.
"It's not the case any more that there are just large international firms doing this," Speckhart said. "Iraqi firms are making the money."
In BAGHDAD story headlined "U.S. reconstruction chief challenged by Iraqis" please read in paragraph eight ... when temperatures rose above 120 degrees Fahrenheit (around 49 Celsius) ... instead of ... when temperatures rose above 120 degrees Fahrenheit (around 40 Celsius) ... (correcting temperature conversion).
A corrected version follows.
By Claudia Parsons
BAGHDAD, Nov 13 (Reuters) - Iraqi perceptions that not enough is being done to rebuild the country after the U.S.-led invasion are simply a case of bad public relations, Washington's new reconstruction chief said on Sunday.
Challenged by Iraqi reporters at his first news conference since he arrived in Baghdad to head the U.S. embassy's Iraq Reconstruction Management Office, Dan Speckhart listed a string of U.S.-funded projects covering health, education, transport, water and electricity generation.
"I recognise some people are frustrated perhaps that it's not moving as fast as they would like but the basis is there," Speckhart responded when asked why there was little evidence of progress in Baghdad, where electricity is erratic at best.
Speckhart said more than half of a $2.8 billion reconstruction programme in the capital had gone towards infrastructure projects, such as electricity, water and sewage.
"This is a big challenge. There's been more than 30 years of decay and neglect that has run down the infrastructure tremendously," Speckhart said, adding that demand for electricity was also rising as Iraqis buy more fridges, air conditioners and other appliances previously in short supply.
Speckhart said roughly half the electricity generation in Iraq now was the result of U.S.-funded projects; that 350 water and sewage treatment projects had been undertaken; and that 700 schools had been renovated.
In July a report by the U.S. Congress' investigative arm said that as of May 2005, power generation in Iraq was at a lower level than before the U.S. invasion of Iraq in March 2003.
Many Iraqis spend whole evenings without power, and last summer, when temperatures rose above 120 degrees Fahrenheit (around 49 Celsius), families were making do with about eight hours of power a day, two hours on and then four off.
Iraq's oil output, which U.S. officials initially said would help pay for rebuilding projects, had also dropped in the past two years, the Government Accountability Office report said.
During the 2003 U.S.-led invasion, there was extensive damage to buildings, including the telecommunications system, bridges and other infrastructure, while electricity and oil installations suffered from a decade of international sanctions.
LARGEST RECONSTRUCTION PROGRAMME
Speckhart described the $30 billion rebuilding programme funded by the U.S. and other international donors as "the largest reconstruction programme for a single country in the history of the world". But he said even that was only a start, and further international help would be needed.
Another Iraqi reporter asked him about a recommendation by a U.N. watchdog agency that Washington should repay $208 million in apparent overcharges paid to a Halliburton Co. subsidiary.
Speckhart said the problem was much of the U.S.-funded work done was not visible enough. "I wish I had time to take you all on field trips," he told the reporters.
"I understand it's a big country and it's not happening as fast as Iraqis would like, but it is happening," he said.
Pressed by a third reporter about an unfinished hospital project in a Shi'ite district in Baghdad, Speckhart said penalties for companies would depend on their contract.
"Sometimes in Iraq there can be delays that are not the fault of the companies," he said.
A report by the U.S. special inspector general for Iraq reconstruction at the end of October said more than a quarter of all reconstruction funds had been spent on security costs to protect contractors, hundreds of whom have died in Iraq. That eats away at what ends up being spent on Iraq and Iraqis.
"We're trying to build and the terrorists are trying to destroy," Speckhart said, adding that U.S. authorities often did not publicise successes to avoid attracting attacks.
"Part of the challenge we have faced is we haven't advertised what we're doing in all these places," he said.
Speckhart said reporters who questioned why so many contracts had gone to U.S. firms, such as Halliburton, a company once led by Vice President Dick Cheney, were misinformed.
"It's not the case any more that there are just large international firms doing this," Speckhart said. "Iraqi firms are making the money."
Friday, November 11, 2005
SignOnSanDiego.com -- Halliburton repays $8.6 million to pension holders
HOUSTON ? Oil field services company Halliburton Co. repaid $8.6 million to pension holders in 2003 and 2004 for failing to properly fund the plans and for a bookkeeping error, according to a letter from the Labor Department.
The Labor Department closed its investigation into the pension violations after the payments were made, according to a copy of the Oct. 6 letter obtained by Reuters Friday.
"Because you have taken the corrective actions ... the Department will take no further action," Roger Hilburn, regional director for the Labor Department said in the letter, which cited several potential legal violations by the company.
The Houston-based company said once the errors were discovered, it moved to cover the payments.
"Halliburton cooperated extensively with the Department of Labor to identify and successfully resolve, on a voluntary basis, issues involving certain retirement plans," the company said.
According to the letter, Halliburton failed to make proper payments on three occasions to the fund.
The company paid about $5.8 million in stock and cash in 2003 and 2004 to the fund from the sale of Prudential Insurance Co. stock that it wrongly kept, and also paid $2.6 million to reimburse its pension trusts for expenses.
An error in the company's payroll system in 2003 wrongly led to about 100 employees being charged a 10 percent early withdrawal penalty on their pensions by the Internal Revenue Service. The company reimbursed those employees the $191,000 they had been charged.
The Labor Department closed its investigation into the pension violations after the payments were made, according to a copy of the Oct. 6 letter obtained by Reuters Friday.
"Because you have taken the corrective actions ... the Department will take no further action," Roger Hilburn, regional director for the Labor Department said in the letter, which cited several potential legal violations by the company.
The Houston-based company said once the errors were discovered, it moved to cover the payments.
"Halliburton cooperated extensively with the Department of Labor to identify and successfully resolve, on a voluntary basis, issues involving certain retirement plans," the company said.
According to the letter, Halliburton failed to make proper payments on three occasions to the fund.
The company paid about $5.8 million in stock and cash in 2003 and 2004 to the fund from the sale of Prudential Insurance Co. stock that it wrongly kept, and also paid $2.6 million to reimburse its pension trusts for expenses.
An error in the company's payroll system in 2003 wrongly led to about 100 employees being charged a 10 percent early withdrawal penalty on their pensions by the Internal Revenue Service. The company reimbursed those employees the $191,000 they had been charged.
Feds say Halliburton mishandled pension funds - NYT - General Industrial Services - Industrial, Diversified - Industrial Products & Services - General
By MarketWatch
Last Update: 12:43 AM ET Nov. 11, 2005
SAN FRANCISCO (MarketWatch) -- An investigation of Halliburton Co.'s pension plan has found the company violated federal pension law, including charging some costs of Halliburton's executive pension and bonus plan to the workers' pension fund, according to a report published Friday.
According to the Times story, the Labor Department concluded that Halliburton's actions violated federal pension law prohibitions against self-dealing and using pension money for the benefit of the company, as well as the requirement to handle pension money with "care, skill, prudence and diligence."
The documents show Halliburton replenished funds that were improperly withdrawn from the pension fund, made the affected individuals whole and paid an undisclosed tax penalty, the Times reported.
Two of the violations began while Vice President Dick Cheney was the company's chief executive. The third, which the Times reported involved the largest amount of money, took place after Cheney resigned in 2000.
The report said Halliburton responded to an inquiry about the findings with a statement that said: "Halliburton cooperated extensively with the Department of Labor to identify and successfully resolve these issues on a voluntary basis. As the letter indicates, these issues have all been fully resolved."
Representatives for Halliburton could not be reached early Friday for comment on the report.
Shares of Halliburton fell $2.40 Thursday, or 4.11%, to $56.
Last Update: 12:43 AM ET Nov. 11, 2005
SAN FRANCISCO (MarketWatch) -- An investigation of Halliburton Co.'s pension plan has found the company violated federal pension law, including charging some costs of Halliburton's executive pension and bonus plan to the workers' pension fund, according to a report published Friday.
According to the Times story, the Labor Department concluded that Halliburton's actions violated federal pension law prohibitions against self-dealing and using pension money for the benefit of the company, as well as the requirement to handle pension money with "care, skill, prudence and diligence."
The documents show Halliburton replenished funds that were improperly withdrawn from the pension fund, made the affected individuals whole and paid an undisclosed tax penalty, the Times reported.
Two of the violations began while Vice President Dick Cheney was the company's chief executive. The third, which the Times reported involved the largest amount of money, took place after Cheney resigned in 2000.
The report said Halliburton responded to an inquiry about the findings with a statement that said: "Halliburton cooperated extensively with the Department of Labor to identify and successfully resolve these issues on a voluntary basis. As the letter indicates, these issues have all been fully resolved."
Representatives for Halliburton could not be reached early Friday for comment on the report.
Shares of Halliburton fell $2.40 Thursday, or 4.11%, to $56.
Saturday, November 05, 2005
UN audit says Halliburton overcharged Iraq - Yahoo! News
A UN auditing board has recommended the United States pay as much as 208 million dollars to Iraq for overbilling or shoddy work performed by a subsidiary of the US oil services firm Halliburton, The New York Times reports.
The work, carried out by Kellogg, Brown and Root, was paid for with Iraqi oil revenues but was delivered at inflated prices or done poorly, the board said, quoted by the US newspaper.
While audits had called into question 208 million dollars worth of contracting work, it was too early to say how much of the funds should be paid back because analysis of financial statements and documents was still under way, the newspaper wrote.
Once the analysis was finished, the UN monitoring board "recommends that amounts disbursed to contractors that cannot be supported as fair be reimbursed expeditiously," the board said in a statement, quoted by the daily.
The board, which relied mainly on Pentagon audits for its findings, could only make recommendations and the ultimate decision on repayment would be up to the United States government. The Pentagon has yet to release its audits of the contracting work.
A spokeswoman for Halliburton told the newspaper questions raised by earlier US military audits had focused on documentation and not the quality of the work performed by Kellogg, Brown and Root.
"Therefore, it would be completely wrong to say or imply that any of these costs that were incurred at the client's direction for its benefit are 'overcharges,'" spokeswoman Cathy Mann was quoted as saying in an e-mail to the paper.
Halliburton, once managed by now Vice President Dick Cheney, has been accused previously of overbilling and opposition Democrats have alleged it enjoyed preferential treatment for government contracts. Cheney has rejected the allegations.
A former Iraqi academic, Louay Bahry, told the newspaper that the board's findings would confirm suspicions among ordinary Iraqis that Washington's underlying motive in going to war against Saddam Hussein's regime in 2003 was to control the country's oil wealth.
"Something like this will be caught in the Iraqi press and be discussed by the Iraqi general public and will leave a very bad taste in the mouth of the Iraqis," Bahry, who works at the Middle East Institute in Washington, told the newspaper.
Charged with overseeing Iraq's oil revenues and money seized from Saddam Hussein's regime, the monitoring board includes representatives from the United Nations, the International Monetary Fund, the Arab Fund for Economic and Social Development, the International Bank for Reconstruction and Development and the Iraqi government.
The results of the audit should allow the Iraqi government "the right to go back to K.B.R. (Kellogg, Brown and Root) and say, 'Look, you've overbilled me on this, this is what you could repay me,'" a board member was quoted as saying by the paper.
The work, carried out by Kellogg, Brown and Root, was paid for with Iraqi oil revenues but was delivered at inflated prices or done poorly, the board said, quoted by the US newspaper.
While audits had called into question 208 million dollars worth of contracting work, it was too early to say how much of the funds should be paid back because analysis of financial statements and documents was still under way, the newspaper wrote.
Once the analysis was finished, the UN monitoring board "recommends that amounts disbursed to contractors that cannot be supported as fair be reimbursed expeditiously," the board said in a statement, quoted by the daily.
The board, which relied mainly on Pentagon audits for its findings, could only make recommendations and the ultimate decision on repayment would be up to the United States government. The Pentagon has yet to release its audits of the contracting work.
A spokeswoman for Halliburton told the newspaper questions raised by earlier US military audits had focused on documentation and not the quality of the work performed by Kellogg, Brown and Root.
"Therefore, it would be completely wrong to say or imply that any of these costs that were incurred at the client's direction for its benefit are 'overcharges,'" spokeswoman Cathy Mann was quoted as saying in an e-mail to the paper.
Halliburton, once managed by now Vice President Dick Cheney, has been accused previously of overbilling and opposition Democrats have alleged it enjoyed preferential treatment for government contracts. Cheney has rejected the allegations.
A former Iraqi academic, Louay Bahry, told the newspaper that the board's findings would confirm suspicions among ordinary Iraqis that Washington's underlying motive in going to war against Saddam Hussein's regime in 2003 was to control the country's oil wealth.
"Something like this will be caught in the Iraqi press and be discussed by the Iraqi general public and will leave a very bad taste in the mouth of the Iraqis," Bahry, who works at the Middle East Institute in Washington, told the newspaper.
Charged with overseeing Iraq's oil revenues and money seized from Saddam Hussein's regime, the monitoring board includes representatives from the United Nations, the International Monetary Fund, the Arab Fund for Economic and Social Development, the International Bank for Reconstruction and Development and the Iraqi government.
The results of the audit should allow the Iraqi government "the right to go back to K.B.R. (Kellogg, Brown and Root) and say, 'Look, you've overbilled me on this, this is what you could repay me,'" a board member was quoted as saying by the paper.
Thursday, November 03, 2005
HoustonChronicle.com - Suit says Halliburton shirked on overtime
5 workers claim Army contract was broken
By L.M. SIXEL
Copyright 2005 Houston Chronicle
Halliburton and KBR violated their contracts with the Army when they failed to pay workers in Iraq and Kuwait overtime, a lawsuit filed in a Houston federal court alleges.
The lawsuit, filed by five workers seeking class-action status, claims Halliburton and its subsidiaries shorted 20,000 to 40,000 truck drivers, cooks, mechanics and other workers millions of dollars.
"It appears to us from our investigation and talking to several hundred employees that they were required to work 80 to 100 hours a week simply because it's cheaper to have them work overtime then have (other employees) start a new week," said Ramon Rossi Lopez, a trial lawyer with Lopez, Hodes, Restaino, Milman & Skikos in Newport Beach, Calif.
Houston-based Halliburton declined to discuss the lawsuit.
"At this time, we are investigating the situation, but with litigation pending it would not be appropriate to comment further," said Halliburton spokeswoman Cathy Mann. The Army also did not respond to requests for comment by press time.
According to the suit, Brown & Root Services signed a contract with the Army in December 2001 to provide non-combat support services.
Despite the fact that federal law does not require companies to pay their overseas workers overtime, the agreement between the Army and Halliburton required the payment of time and one-half for workers who put in more than 40 hours a week, the suit alleges.
But Halliburton and its subsidiaries required its workers to sign contracts stipulating that they would not receive overtime, according to the lawsuit, which also claims they routinely worked between 80 to 100 hours a week.
Halliburton's contract is under the Logistics Civil Augmentation Program, better known as LOGCAP, which helps plan for the use of civilian contractors in wartime and emergencies.
lm.sixel@chron.com
By L.M. SIXEL
Copyright 2005 Houston Chronicle
Halliburton and KBR violated their contracts with the Army when they failed to pay workers in Iraq and Kuwait overtime, a lawsuit filed in a Houston federal court alleges.
The lawsuit, filed by five workers seeking class-action status, claims Halliburton and its subsidiaries shorted 20,000 to 40,000 truck drivers, cooks, mechanics and other workers millions of dollars.
"It appears to us from our investigation and talking to several hundred employees that they were required to work 80 to 100 hours a week simply because it's cheaper to have them work overtime then have (other employees) start a new week," said Ramon Rossi Lopez, a trial lawyer with Lopez, Hodes, Restaino, Milman & Skikos in Newport Beach, Calif.
Houston-based Halliburton declined to discuss the lawsuit.
"At this time, we are investigating the situation, but with litigation pending it would not be appropriate to comment further," said Halliburton spokeswoman Cathy Mann. The Army also did not respond to requests for comment by press time.
According to the suit, Brown & Root Services signed a contract with the Army in December 2001 to provide non-combat support services.
Despite the fact that federal law does not require companies to pay their overseas workers overtime, the agreement between the Army and Halliburton required the payment of time and one-half for workers who put in more than 40 hours a week, the suit alleges.
But Halliburton and its subsidiaries required its workers to sign contracts stipulating that they would not receive overtime, according to the lawsuit, which also claims they routinely worked between 80 to 100 hours a week.
Halliburton's contract is under the Logistics Civil Augmentation Program, better known as LOGCAP, which helps plan for the use of civilian contractors in wartime and emergencies.
lm.sixel@chron.com
Wednesday, November 02, 2005
statesman.com | Ex-official may testify on Abramoff
THE DENVER POST
Wednesday, November 2, 2005
WASHINGTON -- The former top deputy to Interior Secretary Gale Norton, Steven Griles, is expected today to become the first former high-ranking Bush administration official to testify in the Senate investigation of indicted lobbyist Jack Abramoff and his dealings with Indian tribal gambling.
Griles aggressively pushed Norton and the Interior Department to help Abramoff's clients and block their rivals, according to documents and officials.
The Senate Indian Affairs Committee is investigating whether Abramoff bilked Indian tribes out of millions of dollars.
Wednesday, November 2, 2005
WASHINGTON -- The former top deputy to Interior Secretary Gale Norton, Steven Griles, is expected today to become the first former high-ranking Bush administration official to testify in the Senate investigation of indicted lobbyist Jack Abramoff and his dealings with Indian tribal gambling.
Griles aggressively pushed Norton and the Interior Department to help Abramoff's clients and block their rivals, according to documents and officials.
The Senate Indian Affairs Committee is investigating whether Abramoff bilked Indian tribes out of millions of dollars.
Tuesday, November 01, 2005
KRT Wire | 11/01/2005 | Civilian contractors in Iraq dying at faster rate as insurgency grows
BY SETH BORENSTEIN
Knight Ridder Newspapers
WASHINGTON - As the nation focused last week on the 2,000th U.S. soldier who died in Iraq, Gloria Dagit of Jefferson, Iowa, got a box filled with the belongings of her son, Keven, who was killed when his convoy of trucks was ambushed in northern Iraq.
Keven Dagit's death Sept. 20 - along with two other truckers - didn't register on the tally of Iraq deaths broadcast daily. That's because they were civilians working for U.S. defense contractors.
As the violence of the protracted war continues and some 75,000 civilian employees struggle to rebuild the war-torn nation and support the military, contractor casualties mount. Their deaths have more than tripled in the past 13 months.
As of Monday, 428 civilian contractors had been killed in Iraq and another 3,963 were injured, according to Department of Labor insurance-claims statistics obtained by Knight Ridder.
Those statistics, which experts said were the most comprehensive listing available on the toll of the war, are far from complete: Two of the biggest contractors in Iraq said their casualties were higher than the figures the Labor Department had for them.
The dead and injured come from many walks of life, drawn by money and patriotism. Some are American citizens. Most are not. They are truckers, police officers and translators. They're counted only if they were paid by companies hired by the Pentagon. Their deaths and injuries were compensated by insurance policies required by federal law.
The Labor Department lists 156 dead for an L-3 Communications subsidiary in Virginia. The company, which provides translators who work with the military, puts the death toll at 167, of whom 15 were Americans. The Labor Department's accounting reports that Halliburton, the largest contractor in Iraq, has had 30 employees killed in Iraq and 2,471 injured. A Halliburton spokeswoman, Melissa Norcross, said Tuesday that the company had lost a total of 77 workers in Iraq, Afghanistan and its base in Kuwait. One worker is unaccounted for. Halliburton couldn't give a breakdown by country.
The government's listing shows the contractors' casualty rate is increasing. In the first 21 months of the war, 11 contractors were killed and 74 injured each month on average. This year, the monthly average death toll is nearly 20 and the average monthly number of injured is 243.
"You've got a greater number of contractors on the ground carrying out a greater number of roles putting them in danger," said Peter W. Singer, a contracting expert at the Brookings Institution, a Washington research center. "And issue No. 3, you've got a much more dangerous environment."
Keven Dagit, a truck driver for Halliburton, knew it. The day before he was killed he told his mother, "Now, it's really getting dangerous," she recalled.
He left two daughters, ages 9 and 11.
"I want more people to realize that these guys are out there defenseless," Gloria Dagit said. "It was an ambush. ... They are not allowed to carry weapons."
So far this year, 196 contractors in Iraq have been killed and 2,427 have been injured, according to Labor Department statistics.
In August, Mike Dawes of Stillwell, Okla., a longtime police officer who'd been hired to train Iraqi police, was killed by a suicide bomber in downtown Baqoubah, 36 miles northeast of Baghdad. He'd worked for DynCorp International and had survived as a private contractor in Kosovo, where he also taught police from Poland, India and Pakistan. He described that experience as "really an honor."
Dawes "was an excellent officer," said Stephen Farmer, the police chief at the Tahlequah Police Department in Oklahoma. "If he wasn't the first one there on the call, he was usually the one right behind."
The invisible nature of the contractors' deaths irks their friends and families.
"We get hurt right next to them in many cases," said Erick Fern, a Houston trucker for Halliburton who injured his back in Iraq and is fighting to get compensation. "It seems to be that we don't exist since we're getting paid."
Private companies aren't obligated to report deaths to the news media, as the military does. But they're required to carry federal insurance for all their workers in Iraq and to report claims to the Labor Department under the Defense Base Act. That doesn't include contractors who work for agencies outside of the Pentagon, however.
"Most of what you see on TV is strictly about the military," said Steve Powell of Azle, Texas, who worked for Halliburton in the Iraqi city of Mosul and watched friends get killed. "There's very little said about the contractors. ... I felt like I was over there doing something to help the military in a way."
Rick Kiernan, a spokesman for L-3 Communications, said his firm had had so many losses because its translators were "with the combatants; they're with the special forces; they're with the infantry units. That probably puts them out in the most dangerous places."
Kiernan noted that L-3's employees aren't killed in combat, they're being assassinated. Of the company's 152 dead Iraqi employees, 105 were murdered because they collaborated with Americans, he said.
"They've been targeted," Kiernan said. "A lot of these local nationals are really doing their part as well in a very courageous way."
The workers' families also make sacrifices.
Yvette English, a pregnant Colorado woman with a 19-month-old daughter, helps run an Internet message board to assist families with loved ones in Iraq. Her husband is a Halliburton truck driver.
"While he's gone, it's very lonely," she said. "You didn't bargain in a marriage to be alone and be a single mom. Then again, you support your husbands and what they're doing. For them, it's a sense of duty."
Todd Drobnick of Everett, Wash., was one of the first American employees of L-3 to be killed, dying with two military personnel in a suicide bomb attack two years ago this month.
For his father, John Drobnick, his son's loss is still painful. "I was just crying today," he said.
"There are days I get angry, but that's not the way you honor someone; you go and do something decent," he said. So he and his wife, Sharon, plan to mark the second anniversary of their son's death by fixing up houses that Hurricane Katrina damaged in Louisiana.
"That's the kind of thing he would have done," John Drobnick said, weeping. "That's the reason he worked in the (Persian) Gulf. He was there five times. He went back because he loved the people, because he thought they needed help and he could help."
Knight Ridder Newspapers
WASHINGTON - As the nation focused last week on the 2,000th U.S. soldier who died in Iraq, Gloria Dagit of Jefferson, Iowa, got a box filled with the belongings of her son, Keven, who was killed when his convoy of trucks was ambushed in northern Iraq.
Keven Dagit's death Sept. 20 - along with two other truckers - didn't register on the tally of Iraq deaths broadcast daily. That's because they were civilians working for U.S. defense contractors.
As the violence of the protracted war continues and some 75,000 civilian employees struggle to rebuild the war-torn nation and support the military, contractor casualties mount. Their deaths have more than tripled in the past 13 months.
As of Monday, 428 civilian contractors had been killed in Iraq and another 3,963 were injured, according to Department of Labor insurance-claims statistics obtained by Knight Ridder.
Those statistics, which experts said were the most comprehensive listing available on the toll of the war, are far from complete: Two of the biggest contractors in Iraq said their casualties were higher than the figures the Labor Department had for them.
The dead and injured come from many walks of life, drawn by money and patriotism. Some are American citizens. Most are not. They are truckers, police officers and translators. They're counted only if they were paid by companies hired by the Pentagon. Their deaths and injuries were compensated by insurance policies required by federal law.
The Labor Department lists 156 dead for an L-3 Communications subsidiary in Virginia. The company, which provides translators who work with the military, puts the death toll at 167, of whom 15 were Americans. The Labor Department's accounting reports that Halliburton, the largest contractor in Iraq, has had 30 employees killed in Iraq and 2,471 injured. A Halliburton spokeswoman, Melissa Norcross, said Tuesday that the company had lost a total of 77 workers in Iraq, Afghanistan and its base in Kuwait. One worker is unaccounted for. Halliburton couldn't give a breakdown by country.
The government's listing shows the contractors' casualty rate is increasing. In the first 21 months of the war, 11 contractors were killed and 74 injured each month on average. This year, the monthly average death toll is nearly 20 and the average monthly number of injured is 243.
"You've got a greater number of contractors on the ground carrying out a greater number of roles putting them in danger," said Peter W. Singer, a contracting expert at the Brookings Institution, a Washington research center. "And issue No. 3, you've got a much more dangerous environment."
Keven Dagit, a truck driver for Halliburton, knew it. The day before he was killed he told his mother, "Now, it's really getting dangerous," she recalled.
He left two daughters, ages 9 and 11.
"I want more people to realize that these guys are out there defenseless," Gloria Dagit said. "It was an ambush. ... They are not allowed to carry weapons."
So far this year, 196 contractors in Iraq have been killed and 2,427 have been injured, according to Labor Department statistics.
In August, Mike Dawes of Stillwell, Okla., a longtime police officer who'd been hired to train Iraqi police, was killed by a suicide bomber in downtown Baqoubah, 36 miles northeast of Baghdad. He'd worked for DynCorp International and had survived as a private contractor in Kosovo, where he also taught police from Poland, India and Pakistan. He described that experience as "really an honor."
Dawes "was an excellent officer," said Stephen Farmer, the police chief at the Tahlequah Police Department in Oklahoma. "If he wasn't the first one there on the call, he was usually the one right behind."
The invisible nature of the contractors' deaths irks their friends and families.
"We get hurt right next to them in many cases," said Erick Fern, a Houston trucker for Halliburton who injured his back in Iraq and is fighting to get compensation. "It seems to be that we don't exist since we're getting paid."
Private companies aren't obligated to report deaths to the news media, as the military does. But they're required to carry federal insurance for all their workers in Iraq and to report claims to the Labor Department under the Defense Base Act. That doesn't include contractors who work for agencies outside of the Pentagon, however.
"Most of what you see on TV is strictly about the military," said Steve Powell of Azle, Texas, who worked for Halliburton in the Iraqi city of Mosul and watched friends get killed. "There's very little said about the contractors. ... I felt like I was over there doing something to help the military in a way."
Rick Kiernan, a spokesman for L-3 Communications, said his firm had had so many losses because its translators were "with the combatants; they're with the special forces; they're with the infantry units. That probably puts them out in the most dangerous places."
Kiernan noted that L-3's employees aren't killed in combat, they're being assassinated. Of the company's 152 dead Iraqi employees, 105 were murdered because they collaborated with Americans, he said.
"They've been targeted," Kiernan said. "A lot of these local nationals are really doing their part as well in a very courageous way."
The workers' families also make sacrifices.
Yvette English, a pregnant Colorado woman with a 19-month-old daughter, helps run an Internet message board to assist families with loved ones in Iraq. Her husband is a Halliburton truck driver.
"While he's gone, it's very lonely," she said. "You didn't bargain in a marriage to be alone and be a single mom. Then again, you support your husbands and what they're doing. For them, it's a sense of duty."
Todd Drobnick of Everett, Wash., was one of the first American employees of L-3 to be killed, dying with two military personnel in a suicide bomb attack two years ago this month.
For his father, John Drobnick, his son's loss is still painful. "I was just crying today," he said.
"There are days I get angry, but that's not the way you honor someone; you go and do something decent," he said. So he and his wife, Sharon, plan to mark the second anniversary of their son's death by fixing up houses that Hurricane Katrina damaged in Louisiana.
"That's the kind of thing he would have done," John Drobnick said, weeping. "That's the reason he worked in the (Persian) Gulf. He was there five times. He went back because he loved the people, because he thought they needed help and he could help."
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