KBR tax loophole raises new questions By ANNE FLAHERTY, Associated Press Writer
37 minutes ago
WASHINGTON - When it comes to paying federal taxes on its workers in Iraq, KBR says it was exempt because they were foreign hands hired through subsidiaries in the Cayman Islands.
But when it comes to job-related injuries, including those at an Iraqi water plant, the Houston-based defense contractor says those same workers are Americans who must file their grievances with the U.S. government.
Under federal compensation laws, U.S. companies working for the government in Iraq and elsewhere overseas are mostly shielded from employee lawsuits. The 1941 Defense Base Act entitles injured workers instead to government-funded medical care and other benefits.
"It's an unbelievable hypocrisy," Sen. Byron Dorgan, D-N.D., chairman of the Senate Democratic Policy Committee, said of KBR's position.
When asked to respond, KBR, which split from Halliburton last year, said it established its overseas subsidiaries in accordance with the law.
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