As Julie Sullivan at The Oregonian reported this week, U.S. Rep. Earl Blumenauer (D-Ore.) has succeeded in getting the Department of Defense to provide more information about Pentagon contracts with indemnification clauses, or “promises that taxpayers will pick up the tab in cases where military contractors incur liability while executing contracts,” as Blumenauer’s announcement puts it.
But the DoD still won’t declassify KBR’s Project RIO (short for Restore Iraqi Oil) contract, which has resulted in a handful of lawsuits by members of National Guard units exposed to the toxic chemical sodium dichromate (a form of hexavalent chromium) while stationed at the Qarmat Ali water treatment plant in 2003.
Who pays when a military contractor causes harm has become a key issue in an Oregon lawsuit in which 34 National Guard soldiers have sued KBR. They allege that while guarding KBR’s operations, they were exposed to a rust-fighter piled around the Qarmat Ali water treatment plant in 2003. It contained the carcinogen hexavalent chromium, and soldiers say they suffer serious health problems from it.
KBR collected $2.5 billion in its no-bid contract to get Iraqi oil flowing.
A deposition filed last summer in U.S. District Court in Portland revealed that on the eve of the Iraq invasion, a KBR attorney won a secret clause ensuring that U.S. taxpayers, and not KBR, would pay in the event of any death or injury.
The Oregonian has obtained a letter dated Feb. 18, 2010 in which KBR managers indicate that potential total costs of soldiers’ claims against KBR could be more than $150 million, Sullivan wrote.
“KBR does not believe that the company is liable for any damages,” KBR’s Michael Morrow wrote to the U.S. Army Corps of Engineers. But he wrote that KBR continues to incur research and legal fees, and would bill the government for allowable costs not paid by insurance.
In a news release announcing that the Pentagon had provided details on 123 contracts with liability clauses, Blumenauer promised to keep pushing for answers on the terms of KBR’s contract.
“This is a victory for transparency in the military’s contracting process,” said Blumenauer. “By uncovering more than 120 military contracts that include taxpayer liability provisions, this inquiry has given taxpayers a broad picture of where their money is – and could be – going.”
The documents cover a range of military contracts for work conducted in the U.S. and in Iraq. They show taxpayer liability clauses in contracts granted to (among others) the makers of the anthrax and smallpox vaccines, firms operating hazardous materials facilities in the United States and a company tasked with recovering potential radioactive materials during the Iraq invasion.
Here’s a link to information provided by the DoD. The release continued:
Summaries of the contracts provided by the DoD appear to show a diligent, responsible process for work carried out in the United States that protects taxpayers from liability in cases of contractor negligence, but far looser standards for work in Iraq. In addition, the DoD continues to refuse declassification for the taxpayer liability section of its “Restore Iraqi Oil” contract with KBR in Iraq – a contract that is the subject of a lawsuit in Oregon in the wake of news that KBR exposed dozens of Oregon Guardsmen to cancer-causing chemicals at its Qarmat Ali facility.
“These documents suggest that contracts associated with our Iraq war efforts may not contain sufficient taxpayer protections in cases of contractor negligence,” said Blumenauer. “I remain concerned that KBR’s contract may be much more loosely drawn, removing incentives for the contractor to behave responsibly and exposing taxpayers to enormous liability and our troops to harm. Why is the Pentagon shielding this contract and protecting KBR? I will continue demanding answers on behalf of our Oregon Guardsmen and will ask once again for this portion of KBR’s contract to be declassified.”
KBR has denied any wrongdoing, and has posted a factsheet here.