One such contractor, Kellogg, Brown & Root Services Inc (KBR) is being sued by a whistleblower and the Department of Justice for defrauding the government. The lawsuit says two Kuwaiti firms, La Nouvelle General Trading & Contracting Company and First Kuwaiti Trading Company both were using a kickback scheme along with overbilling to rip off the U.S. Army on their Logistics Civil Augmentation Program (LOGCAP) contract.
According to the complaint, whether deliberate or unintentional, KBR was reckless in its failure to catch and prohibit the false billing claims submitted early during the war in Iraq.
The men involved in the scheme were Jeff Alex Mazon, Anthony Martin and Stephen Lowell Seamans. These men took illegal kickbacks from two companies ( LaNouvelle and First Kuwaiti) and permitted those companies to be awarded lucrative contracts between 2002-2004. Then KBR would allegedly submit hugely inflated bills for the work completed by the subcontractors. Some of the services, which were extremely expensive, were not completed or were completely underperformed.
According to an article by Pogo, “KBR is alleged to have awarded La Nouvelle a subcontract to supply fuel tankers at more than three times their actual cost, while La Nouvelle allegedly rewarded Mazon, who awarded the subcontract, with a $1 million kickback.” Now that’s a good day at the office for Mazon!
KBR also allegedly charged for vehicles that were not delivered. Those that were delivered were so substandard that the government had to return the vehicles as unusable for the tasks they were purchased to perform!
Another allegation really shows just how bad some government contractors can get. Allegedly, KBR was hired to use refrigeration trucks to transport ice and food. These trucks were originally used to transport human corpses. Then, without proper sanitation, the trucks were used to handle food and ice! Who is hungry for a good army dinner now?
At this point, the three KBR employees have admitted to taking the kickbacks and to making false claims. Mr. Seamans pleaded guilty in 2006 and was sentenced to a year in prison and a $380,000 fine. Mr. Mazon fought his conviction and had two mistrials due to deadlocked juries. After that, he pleaded guilty in 2009 to the charges and was only sentenced to one year of “supervised release.” Mr. Martin pleaded guilty in 2007 and was sentenced to a year and a day in prison and paid a $200,000 fine.
At this point, it is the government that is suing KBR under the False Claims Act and the Anti-Kickback Act. But who is the high-level soul who blew the lid on this ring? None other than a KBR truck driver named Bud Conyers. He worked for KBR in Iraq and the food/ice cross-contamination in the corpse hauling trucks grossed him out enough to tell the news.
This is not the first lawsuit for First Kuwaiti, either. They previously were sued for poor construction on the U.S. Embassy in Bagdad as well as for overbilling US Troop barracks.
So what will happen in the end? Wait and find out. My guess is a stiff fine and some payback, but in the long run, KBR will continue to be awarded government contracts, and the American people will continue to need Qui Tam whistleblowers to keep things fair and honest!