popular logistics » KBR

U.S. settles with whistleblower Bunny Greenhouse

Jonathan Soroko — Thu, 28 Jul 2011 22:49:28 +0000

Below is an excerpt from Erik Eckholm’s piece in the Times, noting the settlement of litigation between Bunnatine “Bunny” Greenhouse and DOD for retaliatory action after her objections, in 2005, to the Halliburton/KBR no-bid contract for logistical support in Iraq. Greenhouse had been the Chief Contracting Officer for the Army Corps of Engineers. She’d previously had a perfect record of performance ratings.

More here

Her primary objections:

the study rationalizing the sole-source KBR contract was itself outsourced – to Halliburton/KBR, which recommended itself as the sole source;
Even if the contract’s premise was justified for the first few months on emergency grounds, it didn’t make sense for a multiyear, potentially indefinite contract.

Which raises the question of how much work KBR/Halliburton are doing now in Iraq, Afghanistan and elsewhere for DOD, CIA, et cet. We note the it’s KBR’s former CEO, and later the United States Vice President, who made famous the phrase “undisclosed location.” (For readers from Brooklyn, “undisclosed location” roughly translates to “going to the mattresses.”) KBR is currently, publicly, one of two logistics contractors in Iraq – but classified contracts are, by definition, outside the scope of public review – and for practical purposes – outside the scope of Congressional review.

From Pentagon Settles With Iraq-Contract Whistleblower, from The New York Times, dated 28 July 2011:

Ending a six-year legal battle, the Army Corps of Engineers has agreed to pay nearly $1 million to a former top contracting official who charged that she was demoted after she objected to a $7 billion no-bid contract granted to a Halliburton subsidiary to repair oil fields in Iraq.

In a settlement agreement signed earlier this month and made final by a federal judge this week, the Army Corps agreed to pay the former official, Bunnatine “Bunny” Greenhouse, $970,000 to cover lost wages, legal fees, and compensatory damages like the harm to her reputation and her mental health. Legal fees make up about 40 percent of the total, said Michael D. Kohn, a lawyer for Ms. Greenhouse.

While the Pentagon made no admission of wrongdoing, the payment for damages is unusually large for a lawsuit by a federal employee, and Mr. Kohn said it validated Ms. Greenhouse’s charges. The United States Attorney’s office in Washington and the Pentagon confirmed the terms of the agreement, but declined to comment further.

The dispute is rooted in the frenetic days leading up to the invasion of Iraq in 2003, and a project that came to symbolize the high costs and poor oversight of Iraqi reconstruction efforts. In early 2003, the Army, in secret and without competitive bidding, put KBR, then a subsidiary of Halliburton, in charge of restoring Iraqi oil production, in a contract potentially worth $7 billion over five years. The Pentagon later said that doing so was necessary because of the “compelling emergency” of war.

Ms. Greenhouse, a career civil servant who was the chief contracts monitor at the Corps at the time, objected that the contract was based on repair plans and cost estimates that KBR itself had been hired by the Corps to prepare, and that the emergency conditions did not justify a multiyear no-bid contract. After internal clashes and threats of demotion, she went public with her concerns in 2004.

Ms. Greenhouse was demoted from the Senior Executive Service and given a poor performance rating, prompting her to bring the lawsuit. As part of the settlement, Ms. Greenhouse, 67, formally retired this week with full benefits.

In the end, KBR collected about $2.4 billion under the disputed contract, according to a Congressional report. It was largely superseded in 2004 by new, competitively awarded contracts that divided up the oil work in Iraq between KBR and the Parsons Corporation.

Negligence at KBR Killed Americans

L J Furman, MBA — Thu, 05 Feb 2009 12:20:06 +0000

KBR, through negligence, kills Americans in Iraq. Staff Sgt. Ryan Maseth, 24, of Pittsburgh, serving in Iraq was killed while taking a shower in his barracks in Baghdad . (Military.com.)

An Army investigation called the electrocution death of a U.S. Soldier in Iraq a “negligent homicide” caused by military contractor KBR Inc. and two of its supervisors

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Sgt. Maseth was one of several soldiers killed by electrocution in the shower.

KBR, the firm once owned by Haliburton, the oil services firm once run by Dick Cheney, built the barracks, installed the shower, and apparently connected the electrical wiring to the plumbing, in violation of building codes and common sense and without oversight.

Q: Why is an oil services firm supporting a military operation?

A: Because, according to Alan Greenspan, it’s a war for oil (click here).

Q: Will KBR be held accountable?

A: I certainly hope so.

13 killed, others injured, hundreds of fires caused by defective KBR electrical work in Iraq; Pentagon responds anemically, and is less than forthcoming to Congress

Jon — Sat, 19 Jul 2008 14:55:28 +0000

James Risen reports in the Times of July 18th (Electrical Risks at Iraq Bases Are Worse Than Said) that

Shoddy electrical work by private contractors on United States military bases in Iraq is widespread and dangerous, causing more deaths and injuries from fires and shocks than the Pentagon has acknowledged, according to internal Army documents.

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During just one six-month period — August 2006 through January 2007 — at least 283 electrical fires destroyed or damaged American military facilities in Iraq, including the military’s largest dining hall in the country, documents obtained by The New York Times show. Two soldiers died in an electrical fire at their base near Tikrit in 2006, the records note, while another was injured while jumping from a burning guard tower in May 2007. Electrical problems were the most urgent noncombat safety hazard for soldiers in Iraq, according to an Army survey issued in February 2007. It noted “a safety threat theaterwide created by the poor-quality electrical fixtures procured and installed, sometimes incorrectly, thus resulting in a significant number of fires.”

Electrical problems were the most urgent noncombat safety hazard for soldiers in Iraq, according to an Army survey issued in February 2007. It noted “a safety threat theaterwide created by the poor-quality electrical fixtures procured and installed, sometimes incorrectly…”

Electrical problems were the most urgent noncombat safety hazard for soldiers in Iraq, according to an Army survey issued in February 2007. It noted “a safety threat theaterwide created by the poor-quality electrical fixtures procured and installed, sometimes incorrectly…”

The Army report said KBR, the Houston-based company that is responsible for providing basic services for American troops in Iraq, including housing, did its own study and found a “systemic problem” with electrical work.

But the Pentagon did little to address the issue until a Green Beret, Staff Sgt. Ryan D. Maseth, was electrocuted in January while showering. His death, caused by poor electrical grounding, drew the attention of lawmakers and Pentagon leaders after his family pushed for answers. Congress and the Pentagon’s inspector general have begun investigations, and this month senior Army officials ordered electrical inspections of all buildings in Iraq maintained by KBR.

“We consider this to be a very serious issue,” Chris Isleib, a Pentagon spokesman, said Thursday in an e-mail message, while declining to comment on the findings in the Army documents.

Heather Browne, a KBR spokeswoman, would not comment about a company safety study or the reports of electrical fires or shocks, but she said KBR had found no evidence of a link between its work and the electrocutions. She added, “KBR’s commitment to the safety of all employees and those the company serves remains unwavering.”

Read the rest of Mr. Risen’s post here: Electrical Risks at Iraq Bases Are Worse Than Said.

Of course, this calls KBR’s competence and integrity into question; more disturbingly, it calls into question the Department of Defense’s ability to to correct errors, particularly in connection with politically well-connected contractors – even when its soldiers and civilians are at risk.

Finally – the odd inconsistency of using local Iraqi contractors, who can scarcely be thought responsible to comply with American building codes, unless given training by KBR – while the State Department and other government agencies don’t generally hire Iraqis as interpreters within the Green Zone – because of their uncertainty about trusting Iraqis, Arabic speakers from other countries are recruited. Does this not raise the question of whether KBR’s mendacity – and the Pentagon’s indifference and passivity – created opportunities for sabotage?

Tags: KBR, sabotage, Iraq, outsourcing, emergency housing

Fiscal Impropriety, Abuse of Power, Incompetence

L J Furman, MBA — Thu, 19 Jun 2008 13:34:19 +0000

The New York Times published three articles in one day about fiscal impropriety, abuse of power, or incompetence of the Bush Administration. On the front page, James Risen writes “Army Overseer Tells of Ouster Over KBR Stir.” Charles Smith says he was fired from his job with the Army for refusing to approve paying more than $1 Billion to KBR after “Army auditors had determined that KBR lacked credible data or records for more than $1 billion.” Smith, an employee of the Army for 31 years, was quoted in The Times saying “the money going to KBR was money being taken away from the troops, and I wasn’t going to do that.” This is another case of firing the whistle-blower. As a patriot, it makes my blood boil. According to Risen, the Pentagon has recently awarded KBR a 10 year, $150 Billion contract in Iraq, which indicates that we will be in Iraq for another 10 years. Eric Lichtblau wrote “Grand Jury Said to Look at Attorneys’ Dismissals” that Justice Deptartment Prosecutors are using a grand jury to investigate criminal accusations that grew from the dismissals of nine United States attorneys. Some employees in the civil rights division of the Justice Department have said that they were given a “political litmus test.” The Wall Street Journal reported Monday that Bradley Schlozman, acting head of the civil rights division may be the subject of a “grand jury referral” focusing on perjury charges. Schlozman admitted to Congress that he had bragged about his success in politicizing the Justice Department. Alberto Gonzales, the former Attorney General, may also have committed perjury in his testimony about wireless eavesdropping by the National Security Agency. As a patriot, this too makes my blood boil. The Government of the United States has always been subordinate to The Law, not The Party. This is the United States, not Communist China, Soviet Russia, Baathist Syria, or Saddam’s Iraq. The Times also carried Judge Backs “White House in Dispute over E-Mail” a story by the Associated Press reporting the decision, by Judge Coleen Kollar-Kotelly, that the White House Office of Administration is exempt from the Freedom of Information Act. Since its creation, in 1978, the Office of Administration has responded to Freedom of Information requests. The White House has acknowledged problems with it’s e-mail system, while saying that any missing e-mail messages can be found on backup tapes. In a related matter, a judge is considering whether to instruct the Executive Office of the President on steps it must take to safeguard electronic messages. I am not a lawyer, however, I think that Judge Kollar-Kotelly is wrong. If she is making law, as a judicial activist, at least she is doing so legally. These articles are reproduced below.

The New York Times, nytimes.com, June 17, 2008

Army Overseer Tells of Ouster Over KBR Stir

By JAMES RISEN

WASHINGTON — The Army official who managed the Pentagon’s largest contract in Iraq says he was ousted from his job when he refused to approve paying more than $1 billion in questionable charges to KBR, the Houston-based company that has provided food, housing and other services to American troops. The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations. Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. Smith refused to sign off on the payments to the company. “They had a gigantic amount of costs they couldn’t justify,” he said in an interview. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.” But he was suddenly replaced, he said, and his successors — after taking the unusual step of hiring an outside contractor to consider KBR’s claims — approved most of the payments he had tried to block. Army officials denied that Mr. Smith had been removed because of the dispute, but confirmed that they had reversed his decision, arguing that blocking the payments to KBR would have eroded basic services to troops. They said that KBR had warned that if it was not paid, it would reduce payments to subcontractors, which in turn would cut back on services. “You have to understand the circumstances at the time,” said Jeffrey P. Parsons, executive director of the Army Contracting Command. “We could not let operational support suffer because of some other things.” Mr. Smith’s account fills in important gaps about the Pentagon’s handling of the KBR contract, which has cost more than $20 billion so far and has come under fierce criticism from lawmakers. While it was previously reported that the Army had held up large payments to the company and then switched course, Mr. Smith has provided a glimpse of what happened inside the Army during the biggest showdown between the government and KBR. He is giving his account just as the Pentagon has recently awarded KBR part of a 10-year, $150 billion contract in Iraq. Heather Browne, a spokeswoman for KBR, said in a statement that the company “conducts its operations in a manner that is compliant with the terms of the contract.” She added that it had not engaged in any improper behavior. Ever since KBR emerged as the dominant contractor in Iraq, critics have questioned whether the company has benefited from its political connections to the Bush administration. Until last year, KBR was known as Kellogg, Brown and Root and was a subsidiary of Halliburton, the Texas oil services giant, where Vice President Dick Cheney previously served as chief executive. When told of Mr. Smith’s account, Representative Henry A. Waxman, the California Democrat who is chairman of the House Oversight and Government Reform Committee, said it “is startling, and it confirms the committee’s worst fears. KBR has repeatedly gouged the taxpayer, and the Bush administration has looked the other way every time.” Mr. Smith, a civilian employee of the Army for 31 years, spent his entire career at the Rock Island Arsenal, the Army’s headquarters for much of its contracting work, near Davenport, Iowa. He said he had waited to speak out until after he retired in February. As chief of the Field Support Contracting Division of the Army Field Support Command, he was in charge of the KBR contract from the start. Mr. Smith soon came to believe that KBR’s business operations in Iraq were a mess. By the end of 2003, the Defense Contract Audit Agency told him that about $1 billion in cost estimates were not credible and should not be used as the basis for Army payments to the contractor. “KBR didn’t move proper business systems into Iraq,” Mr. Smith said. Along with the auditors, he said, he pushed for months to get KBR to provide data to justify the spending, including approximately $200 million for food services. Mr. Smith soon felt under pressure to ease up on KBR, he said. He and his boss, Maj. Gen. Wade H. McManus Jr., then the commander of the Army Field Support Command, were called to Pentagon meetings with Tina Ballard, then the deputy assistant secretary of the Army for policy and procurement. Ms. Ballard urged them to clear up KBR’s contract problems quickly, but General McManus ignored the request, Mr. Smith said. Ms. Ballard declined to comment for this article, as did General McManus. Eventually, Mr. Smith began warning KBR that he would withhold payments and performance bonuses until the company provided the Army with adequate data to justify the expenses. The bonuses — worth up to 2 percent of the value of the work — had to be approved by special boards of Army officials, and Mr. Smith made it clear that he would not set up the boards without the information. Mr. Smith also told KBR that, until the information was received, he would withhold 15 percent of all payments on its future work in Iraq. “KBR really did not like that, and they told me they were going to fight it,” Mr. Smith recalled. In August 2004, he told one of his deputies, Mary Beth Watkins, to hand deliver a letter about the threatened penalties to a KBR official visiting Rock Island. That official, whose name Mr. Smith said he could not recall, responded by saying, “This is going to get turned around,” Mr. Smith said. Two officials familiar with the episode confirmed that account, but would speak only on the condition of anonymity out of concern for their jobs. The next morning, Mr. Smith said he got a call from Brig. Gen. Jerome Johnson, who succeeded General McManus when he retired the month before. “He told me, “You’ve got to pull back that letter,”’ Mr. Smith recalled. General Johnson declined to comment for this article. A day later, Mr. Smith discovered that he had been replaced when he went to a meeting with KBR officials and found a colleague there in his place. Mr. Smith was moved into a job planning for future contracts with Iraq. Ms. Watkins, who also declined to comment, was reassigned as well. Mr. Parsons, the contracting director, confirmed the personnel changes. But he denied that pressure from KBR was a factor in the Army’s decision making about the payments. “This issue was not decided overnight, and had been discussed all the way up to the office of the secretary of defense,” he said. Soon after Mr. Smith was replaced, the Army hired a contractor, RCI Holding Corporation, to review KBR’s costs. “They came up with estimates, using very weak data from KBR,” Mr. Smith said. “They ignored D.C.A.A.’s auditors,” he said, referring to the Defense Contract Audit Agency. Lt. Col. Brian Maka, a Pentagon spokesman, disputed that. He said in a statement that the Army auditing agency “does not believe that RCI was used to circumvent” the Army audits. Paul Heagen, a spokesman for RCI’s parent company, the Serco Group, said his firm had insisted on working with the Army auditors. While KBR did not provide all of the data Mr. Smith had been seeking, Mr. Heagen said his company had used “best practices” and sound methodology to determine KBR’s costs. Bob Bauman, a former Pentagon fraud investigator and contracting expert, said that was unusual. “I have never seen a contractor given that position, of estimating costs and scrubbing D.C.A.A.’s numbers,” he said. “I believe they are treading on dangerous ground.” The Army also convened boards that awarded KBR high performance bonuses, according to Mr. Smith. High grades on its work in Iraq also allowed KBR to win more work from the Pentagon, and this spring, KBR was awarded a share in the new 10-year contract. The Army also announced that Serco, RCI’s parent, will help oversee the Army’s new contract with KBR. “In the end,” Mr. Smith said, “KBR got what it wanted.”

The New York Times, nytimes.com, June 17, 2008

Grand Jury Said to Look At Attorneys’ Dismissals

By ERIC LICHTBLAU

WASHINGTON— Justice Department prosecutors are using a grand jury to investigate criminal accusations that grew out of the dismissals of nine United States attorneys, signaling a new stage in one aspect of the inquiry, lawyers in the case said Monday. A lawyer connected to the case said a federal grand jury had recently begun to examine statements by Justice Department officials about hiring decisions in the civil rights division, where some employees said they were subject to a political litmus test. “The issue was lying, whether the people caught up in this told the truth or not,” said the lawyer, who insisted on anonymity because grand jury proceedings are secret. The Wall Street Journal reported on Monday that Justice Department lawyers had brought what is known as a grand jury referral focusing on possible perjury by Bradley J. Schlozman, who was acting head of the civil rights division in 2003. He later became the interim United States attorney in Kansas City, Mo., where the former prosecutor said he had been forced out over political disagreements with Washington. Mr. Schlozman admitted to Congress last year that he had bragged about his success in bringing conservative Republican lawyers into the civil rights division. Justice Department officials declined to comment on Monday. Mr. Schlozman also declined to comment, and his lawyer said he had not been informed that he was the target of any criminal investigation. “We haven’t been contacted by the Department of Justice regarding this, and other than that we have no comment,” the lawyer, William Jordan, said. Mr. Schlozman originally told a Senate committee last June that while he was acting United States attorney in Kansas City, a Justice Department supervisor “directed” him to bring an indictment in a voter fraud case against a liberal group. Days later, in a letter trying to “clarify” his remarks, he said that the decision to bring the indictment was his and that he took “full responsibility” for it. The grand jury inquiry is believed to focus on Mr. Schlozman’s Senate testimony. While prosecutors’ use of a grand jury to gather sworn testimony and records does not necessarily portend any criminal charges, this is the first time any aspect of the inquiry has advanced to the point of a criminal investigation. Since last year, two branches of the department, the Inspector General’s office and the Office of Professional Responsibility, have been investigating the firings and related charges of politicization in hiring. The inspector general has the power to refer possible criminal accusations to prosecutors for possible charges. The investigation led to the resignation of Attorney General Alberto R. Gonzales. A lawyer for Mr. Gonzales, George J. Terwilliger III, said Monday that the grand jury referral was “unrelated to anything connected to Judge Gonzales.” Noting that Mr. Gonzales has promised to cooperate with all Justice Department investigations into the resignations, Mr. Terwilliger said, “He continues to make good on that commitment.” He declined to discuss Mr. Gonzales’s contacts with investigators, but said, “There’s no criminal investigation involving Judge Gonzales and the United States attorneys.” Congressional Democrats said Mr. Gonzales might have perjured himself in his testimony about wireless eavesdropping by the National Security Agency, a program that the inspector general is also reviewing. Asked whether there was any criminal investigation involving Mr. Gonzales’s testimony about the eavesdropping, Mr. Terwilliger said, “I’m not going to get into other things.” Mr. Gonzales’s former chief of staff, Kyle Sampson, who instituted the ousters, was also at the heart of the inquiry. His lawyer, Bradford Berenson, said Mr. Sampson had answered questions from the inspector general’s investigators in two interviews last fall but had “not heard back from them.” Mr. Berenson added, “We have no reason to believe that any sort of referral has been or will be made with regard to Mr. Sampson.”

The New York Times, nytimes.com, June 17, 2008

Judge Backs White House in Dispute Over E-Mail

By The Associated Press

WASHINGTON (AP) — A federal judge ruled on Monday that a White House office did not have to make public its records about millions of e-mail messages that may be missing. The judge, Colleen Kollar-Kotelly of Federal District Court here, said the White House Office of Administration was not subject to the Freedom of Information Act, allowing the White House to maintain the secrecy of an internal paper trail about its problem-plagued e-mail system. The decision came in a lawsuit filed against the Bush administration by Citizens for Responsibility and Ethics in Washington, a private watchdog group that has been trying to determine the extent of the White House’s e-mail problems for more than a year. The functions of the Office of Administration “are strictly administrative,” Judge Kollar-Kotelly said in her ruling. She said that the Office of Administration had no authority over others in the executive branch and that it was dedicated exclusively to providing services to the executive office of the president. Since its creation in 1978, the Office of Administration has responded to requests under the Freedom of Information Act. But the Bush administration reversed that policy in August 2007 after this lawsuit was filed. The citizens’ group and another private group, the National Security Archive, have also sued the executive office of the president over the possibly lost e-mail messages, asserting that the office, by failing to ensure preservation of electronic records, has not complied with legal obligations. In that case, a judge is considering whether to instruct the executive office of the president on steps it must take to safeguard electronic messages. The White House is seeking to have that lawsuit thrown out. The White House has acknowledged problems with its e-mail system, while saying that if any e-mail messages are missing, they can be found on backup tapes.