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Home» Governmental Affairs » No more secret contractor indemnifications under new Defense authorization

No more secret contractor indemnifications under new Defense authorization

Published: Friday, December 21, 2012, 3:02 PM By Mike Francis, The Oregonian

The final Defense Authorization approved today by Congress includes an amendment that will prevent secret contractor indemnifications like the one the Army Corps of Engineers granted to KBR Inc. at the outset of the war against Iraq.

The amendment barring such secret arrangements was sponsored by Sen. Ron Wyden, D-Ore., who, along with other members of the Congressional delegation, has been tracking the lawsuit brought by a set of Oregon soldiers against KBR.

“What KBR received — and Oregon soldiers and the American taxpayers may be stuck paying for — is a get out of jail free card that no one outside of the Pentagon had any say in giving them,” Wyden said earlier this month when the Senate passed the authorization.

A jury in Portland last month found that KBR was negligent in exposing 12 Oregon National Guard soldiers and veterans to a carcinogen at a KBR worksite in southern Iraq in 2003. The jury awarded the first group of 12 Oregon veterans $85 million in damages.

In the long runup to the trial, it emerged that KBR believed it was protected from legal liability for its actions under the Restore Iraqi Oil contract because of a previously undisclosed indemnification clause it negotiated with the Army Corps of Engineers. However, the Army Corps disagreed with that interpretation, saying KBR was responsible for conditions at the Qarmat Ali water treatment plant. KBR is appealing the Corps’ interpretation, but for now, remains the legally responsible party for the claims made by the soldiers.

Wyden was angered to learn that the Pentagon had agreed to the legal protection clause and that it agreed to keep the provision secret.

Another group of Oregon troops will proceed to trial next year, assuming their case survives various legal challenges from KBR.

-Mike Francis



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