KBR Got Bonuses for Work that Killed Soldiers

The Department of Defense paid former Halliburton subsidiary KBR more than $80 million in bonuses for contracts to install electrical wiring in Iraq. The award payments were for the very work that resulted in the electrocution deaths of US soldiers, according to Department of Defense documents revealed today in a Senate hearing. More than $30 million in bonuses were paid months after the death of Sgt. Ryan Maseth, a highly decorated, 24-year-old Green Beret, who was electrocuted while taking a shower at a US base in January 2008. His death, the result of improper grounding for a water pump, has been classified by the US Army Criminal Investigations Division (CID) as a "negligent homicide." Maseth's death had originally been labeled an accident. Bonuses were paid to KBR in 2007 and 2008, after CID investigators had officially expressed concerns about the quality of KBR's electrical work. For its part, KBR denies any culpability for the electrocution deaths.

This information was revealed at a hearing of the Senate Democratic Policy Committee. According to the committee's chair, Sen. Byron Dorgan, the rewards KBR received under its LOGCAP contracts were supposed to be for work of the "highest quality" with "no deficiencies" or problems. Dorgan said KBR's work was "shoddy" and "unprofessional." Some eighteen US soldiers have died since 2003 as a result of KBR's "shoddy work," according to Sen. Frank Lautenberg. KBR/Halliburton, of which Dick Cheney was chairman and CEO from 1995 to 2000, has been the single largest corporate beneficiary of the US wars in Iraq and Afghanistan. It continues to operate globally on US government contracts.

Charles Smith, the former Army official who managed the contracts under which KBR performed electrical work in Iraq, testified that it was "highly inappropriate" that KBR received these bonuses for what he called "dangerously substandard" work. He said that the Army was well aware of KBR's "poor performance" since the beginning of the Iraq invasion, and yet continued to reward KBR because the military was "afraid" KBR would cease work. He said there was "a culture that decided KBR was too big to fail and too important to be held to account." The "perverse incentive is that there was no incentive" for KBR to do quality work because they received bonuses for poor work.

Senator Dorgan said there are "tens of thousands of examples" of unnecessary risks to US soldiers, including deaths that have arisen as a result of KBR's work. "Why should [KBR] be getting more contracts now that we know all this information?" asked Sen. Bob Casey. "The Defense Department has not answered these questions."

James Childs, a master electrician hired by the Army to review electrical work in Iraq during 2008, testified that KBR's work in Iraq was the "most hazardous, worst quality work" he'd ever seen. He said his investigation found improper wiring in "every" building KBR wired in Iraq (of which there are thousands) and that KBR's rewiring work in buildings that were previously safely wired resulted in the electrical system becoming unsafe. Childs said that KBR did not do any work "according to code." He also testified that the same risks exist in Afghanistan, which he recently visited. "While doing inspections in Afghanistan, I found the exact same code violations," Childs said.

Eric Peters, a master electrician who worked for KBR in Iraq as recently as 2009, said that 50 percent of the KBR-managed buildings he saw were not properly wired. "I worried every day people would be injured or killed as a result of this work," Peters testified. He estimated that at least half the electricians hired by KBR--many of them cheaper-costing Third Country Nationals (TCNs)--to service the US military in Iraq would not have been hired to work in the United States, saying they were not trained in US or UK electrical standards. TCNs--from places like India, Bangladesh and Bosnia--are estimated to have done some 60 percent of the electrical work for KBR in Iraq. Peters charged that KBR allowed trainees to take notes in to certification tests, making it very easy to be cleared for work.

Peters also charged that KBR "frowned upon" any refusal to sign off on work that Peters deemed incomplete or unsafe. Peters and others who testified said that "all over theater," meaning everywhere in Iraq, KBR would effectively double-bill US taxpayers by leaving electrical work half-done or incorrectly done and then billing taxpayers again to repair its own shoddy work.

Peters characterized KBR managers as "completely unqualified" and said he is not a "disgruntled former employee" but rather a "disgusted former employee."

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