Iraq Contractor KBR Has Dodged $500 Million in U.S. taxes March 10, 2008Posted by Aaron Walter in Uncategorized.
Tags: Defense Base Act, Iraq, KBR, Service Employers International, Shell Corporations, Taxes, U.S. Contractors
Kellogg Brown & Root (KBR) sure is a piece of work. Lets recap a week or so of posts concerning KBR.
1. KBR has been passing along to the American taxpayer, AIG’s inflated premiums for Defense Base Act coverage, so that KBR (and other contractors in Iraq and Afghanistan) could be insulated from liability for injuries to its employees.
2. KBR is presently being sued in Federal Court for allegedly intentionally causing the deaths of six KBR truck drivers in 2004.
3. Now we discover that the 10,000+ Americans working for KBR, were really working for a Caribean company, not an American one, saving KBR as much as $100 million a year in U.S. Medicare and Social Security Taxes. By claiming its own employees, many of which were hired in Texas and shipped directly to Iraq from there, to be employees of the Cayman Islands corporation Service Employers International Inc, KBR also avoids having to pay for unemployment insurance. That means KBR employees coming home from Iraq are ineligible to recieve unemployment. I bet that wasn’t part of the orientation movie. I also bet it wasn’t part of the pitch to the Department of Defense before they were granted a no-bid contract for work in Iraq.
Tags: Defense Base Act, Fisher v. Halliburton, Good Friday Massacre, Halliburton, Iraq, Jurisdiction, KBR, Tort, U.S. Contractors
The sad back story of this court case has come to be known as the “Good Friday Massacre.” Friday, April 9, 2004, hundreds of insurgents attacked a KBR convoy, killing 6 civilian drivers, injuring 14, and leaving another driver still missing to this day.
To make a long story short, KBR a former subsidiary of Halliburton has been accused of knowing that this particular convoy would be attacked, but sent these civilians into the firefight in a risky attempt to pad its bill to the Department of Defense. However, the factual arguments are on hold while a bitter fight ensues concerning jurisdictional questions.
The case, titled Fisher v. Halliburton, 454 F. Supp. 2d 637 (S.D. Tex. 2005), brings up a rarer situation than most Defense Base Act cases. The plaintiff(s) here allege that the Defense Base Act does not bar a traditional tort suit in federal court because the defendant, KBR, intentially harmed the injured and deceased drivers. The plaintiff is right, and though difficult to prove, this is a common exception in most workers’ compensation schemes, including the Defense Base Act and even the state laws here in Georgia.
Tags: AIG, Defense Base Act Insurance, KBR
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This comes as no surprise to many, but AIG may have been lining its pockets at the expense U.S. taxpayers. AIG is currently under investigation for overcharging KBR Inc., the Army’s largest contractor in Iraq, possibly by tens of millions. The money paying for these overpriced premiums comes from tax payers as part of the $23+ Billion contract KBR has with the Department of Defense. AIG actually gets to charge the American tax payer twice, because your tax dollars not only pay the premiems, but also reimburse AIG for what it pays out on the 15,000+ Defense Base Act claims filed with AIG since 2003.
In case you missed this story, read more about it below in an article from Bloomberg.com by Tony Capaccio: