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U.S. Army paid bonuses to KBR despite questions

By Thomas FerraroPosted 2009/05/20 at 2:32 am EDT

WASHINGTON, May 20, 2009 (Reuters) — The U.S. Army paid “tens of millions of dollars in bonuses” to KBR Inc, its biggest contractor in Iraq, even after it concluded the firm’s electrical work had put U.S. soldiers at risk, according to a source close to a U.S. congressional investigation.

The Senate Democratic Policy Committee plans to hold a hearing on Wednesday to examine KBR’s operations in Iraq, and question why the Army rewarded the Houston-based company.

The panel says KBR has been linked to at least two, and as many as five, electrocution deaths of U.S. soldiers and contractors in Iraq due to “shoddy work.”

Investigators believe hundreds of other soldiers may have received electrical shocks, the source added. The Army is investigating.

[ . . . ]

KBR was part of Halliburton Co until two years ago. Former Vice President Dick Cheney served as Halliburton’s chief executive from 1995 to 2000, when he became George Bush’s running mate.

During the Bush administration, some critics claimed Cheney’s deferred compensation from the company represented a conflict of interest and questioned Halliburton’s winning of lucrative government contracts in Iraq.

Military reports have criticized KBR’s work in Iraq in recent years. Yet afterward, the company received “tens of millions of dollars in bonuses,” said the source, who declined to be identified.

[ . . . ]


A September 30, 2008, letter to KBR from an officer in the Defense Department’s Defense Contract Management Agency had harsh words for the company.

“We cannot overemphasize the significance of the lack of sustained electrical support services being provided by KBR in Iraq to maintain the minimum life, health and safety standards in support of our warfighters,” wrote Captain David Graff, an agency commander.”Primary safety threat, theater wide, is fire due to the inferior 220 electrical fixtures found throughout Iraq,” it said. “Improper installation, substandard equipment purchases (such as light fixtures) and heavy usage appears to be the three primary causes of these fires.”



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