Vanity Fair: "The People vs. the Profiteers" OMG - A Must Read

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Fri Oct-12-07 11:49 AM
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Vanity Fair: "The People vs. the Profiteers" OMG - A Must Read

The People vs. the Profiteers
Americans working in Iraq for Halliburton spin-off KBR have been outraged by the massive fraud they saw there. Dozens are suing the giant military contractor, on the taxpayers' behalf. Whose side is the Justice Department on?

by David Rose November 2007

~snip~

Over the past 16 years, Grayson has litigated dozens of cases of contractor fraud. In many of these, he has found the Justice Department to be an ally in exposing wrongdoing. But in cases that involve the Iraq war, the D.O.J. has taken extraordinary steps to stand in his way. Behind its machinations, he believes, is a scandal of epic proportions—one that may come to haunt the legacy of the Bush administration long after it is gone.

~snip~

Consider the case of Grayson's client Bud Conyers ... Conyers worked in Iraq as a driver for Kellogg, Brown & Root. ...

In the midday heat of June 16, 2003, Conyers was summoned to fix a broken refrigerated truck—a "reefer," in contractor parlance—at Log Base Seitz, on the edge of Baghdad's airport. He and his colleagues had barely begun to inspect the sealed trailer when they found themselves reeling from a nauseating stench. The freezer was powered by the engine, and only after they got it running again, several hours later, did they dare open the doors.

The trailer, unit number R-89, had been lying idle for two weeks, Conyers says, in temperatures that daily reached 120 degrees. "Inside, there were 15 human bodies," he recalls. "A lot of liquid stuff had just seeped out. There were body parts on the floor: eyes, fingers. The goo started seeping toward us. Boom! We shut the doors again." The corpses were Iraqis, who had been placed in the truck by a U.S. Army mortuary unit that was operating in the area. That evening, Conyers's colleague Wallace R. Wynia filed an official report: "On account of the heat the bodies were decomposing rapidly.… The inside of the trailer was awful." ... when Bud Conyers next caught sight of trailer R-89, about a month later, it was packed not with human casualties but with bags of ice—ice that was going into drinks served to American troops. He took photographs, showing the ice bags, the trailer number, and the wooden decking, which appeared to be stained red. Another former KBR employee, James Logsdon, who now works as a police officer near Enid, says he first saw R-89 about a week after Conyers's grisly discovery. "You could still see a little bit of matter from the bodies, stuff that looked kind of pearly, and blood from the stomachs. It hadn't even been hosed down. Afterwards, I saw that truck in the P.W.C.—the public warehouse center—several times. There's nothing there except food and ice. It was backed up to a dock, being loaded."

~snip~

In the fall of 2006, Conyers told me he was planning to file a lawsuit against KBR under the False Claims Act, a law crafted by Abraham Lincoln to punish war profiteers. Under the act's "qui tam," or whistle-blowing, provisions, anyone who comes across a suspected fraud can file a suit on taxpayers' behalf. ("Qui tam" is an abbreviation of a Latin phrase that means "He who sues for the king as well as for himself.") If the government—in the shape of the Department of Justice—decides that the case has merit, it "intervenes," adopting the suit as its own and bearing its costs. The original whistle-blower will get a proportion (usually about 18 percent) of the damages, which can be considerable: when qui tam cases succeed, contractors have to pay back three times as much as they stole. ... Vanity Fair is able to publish Conyers's story only because he told it before any gag was imposed, to a writer for Hustler magazine, and to me. If he spoke about his allegations now, he could go to jail.

So far, Alan Grayson estimates, his efforts to pursue qui tam cases against contractors in Iraq have cost him about $10 million. ... he cannot even reveal how many fraud whistle-blowers he represents, but there are dozens. Stuart Bowen is the special inspector general for Iraqi reconstruction (sigir), a unique watchdog whose office reports to both the Pentagon and State Department. He reported last year that his office knew of 79 suppressed qui tam cases, some of which have multiple plaintiffs. As of August, 66 are still under seal. There may be many more. (KBR refuses to say how many qui tam cases have been filed against it.)

~snip~

It is perfectly normal, Grayson says, for the D.O.J. to seek to extend the seal on a qui tam suit for 6 or 12 months while it carries out investigations. But with many of the Iraq cases it has gone back to court time and again, successfully asking judges for extension after extension. As a result, even many suits first filed in 2003 and 2004 remain entirely secret.

"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."

In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.

~snip~

"I wish I could tell you about the ones that are under seal," says Grayson, "because some of them really are time bombs. They're literally burying these cases to keep the public from finding out about them, and to keep anything from being done on them. But it is a time bomb, because any normal amount of attention on these cases would result in massive amounts of money being recovered for the taxpayers."

~snip~

Much more: http://www.vanityfair.com/politics/features/2007/11/halliburton200711?currentPage=1