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U.S. sues KBR over troop trailers in Iraq

Nov. 20, 2012 - 05:45PM   |   Last Updated: Nov. 20, 2012 - 05:45PM  |  
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CHICAGO — The U.S. government has filed a civil lawsuit accusing a Houston-based global construction company and its Kuwaiti subcontractor of submitting nearly $50 million in inflated claims to install live-in trailers for troops during the Iraq War.

The lawsuit names KBR Inc. and First Kuwaiti Trading Co., alleging they overcharged for truck, driver and crane costs, and misrepresented delays in providing around 2,250 trailers meant to replace tents used by soldiers earlier in the invasion.

In one instance, the contractors allegedly claimed they paid $23,000 to lease one crane per month when the actual price was about $8,000, according to the lawsuit, which was filed this week in U.S. District Court in Rock Island, Ill., and first appeared in federal court records Tuesday.

KBR, once the engineering and construction arm of Halliburton, has faced lawsuits before related to its work in Iraq. One of the most prominent involved a soldier electrocuted in his barracks shower at an Army base. That case was eventually dismissed.

In the case involving the trailers, Jim Lewis, the U.S. Attorney for the Central District of Illinois, said "KBR and First Kuwaiti did not provide an honest accounting."

Stuart Delery, a U.S. deputy assistant attorney general, said in a Department of Justice statement regarding the lawsuit that contractors "are not permitted to profit at the expense of the taxpayers at home who are supporting our men and women in uniform."

KBR spokeswoman Marianne Gooch emailed a brief statement Tuesday that said the company hadn't yet seen the complaint but that, "We believe the government claims to be baseless and without merit."

"KBR has faithfully supported American troops in Iraq and has performed its work in support of the Army with professionalism and in full compliance with its contract and the law," the statement said.

Shortly after the Iraq War began in 2003, KBR subcontracted First Kuwaiti to deliver and install the trailers for about $80 million, according to the lawsuit.

First Kuwaiti blamed a lack of military escorts for repeated delays and tacked on around $49 million in charges, and KBR passed those extra charges on to the U.S. government knowing at least some of the costs were inflated, the lawsuit said.

The suit cites an alleged 2004 letter from a KBR executive to First Kuwaiti that purports to prove the Texas company knew some of its subcontractor's calculations were exaggerated, calling them "absolute highway robbery."

KBR employs more than 27,000 workers worldwide and remains a major defense contractor. Just last month, it was selected for a multibillion-dollar Army logistics project for work at the Redstone Arsenal in Huntsville, Ala., and in Afghanistan and Kuwait.

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