KBR, Guilty In Iraq Negligence, Wants Taxpayers To Foot The Bill

Ryan J. Reilly for Huffington Post

Posted: 01/09/2013 9:37 am EST

WASHINGTON — Sodium dichromate is an orange-yellowish substance containing hexavalent chromium, an anti-corrosion chemical. To Lt. Col. James Gentry of the Indiana National Guard, who was stationed at the Qarmat Ali water treatment center in Iraq just after the 2003 U.S. invasion, it was “just different-colored sand.” In their first few months at the base, soldiers were told by KBR contractors running the facility the substance was no worse than a mild irritant.

Gentry was one of approximately 830 service members, including active-duty soldiers and members of the National Guard and reserve units from Indiana, South Carolina, West Virginia and Oregon, assigned to secure the water treatment plant, according to the Department of Veterans Affairs.

Sodium dichromate is not a mild irritant. It is an extreme carcinogen. In November 2009, at age 52, Gentry died of cancer. The VA affirmed two months later that his death was service-related.

In November, a jury found KBR, the military’s largest contractor, guilty of negligence in the poisoning of a dozen soldiers, and ordered the company to pay $85 million in damages. Jurors found KBR knew both of the presence and toxicity of the chemical. Other lawsuits against KBR are pending.

KBR, however, says taxpayers should be on the hook for the verdict, as well as more than $15 million the company has spent in its failed legal defense, according to court documents and attorneys involved with the case.

KBR’s contract with the U.S. to rebuild Iraq’s oil infrastructure after the 2003 invasion includes an indemnity agreement protecting the company from legal liability, KBR claims in court filings. That agreement, KBR insists, means the federal government must pay the company’s legal expenses plus the verdict won by 12 members of the Oregon National Guard who were exposed to the toxin at the Qarmat Ali water treatment plant.

The military disagrees. A U.S. Army Corps of Engineers contracting officer told KBR in November 2011 that litigation costs “are not covered by the indemnity agreement.”

The public doesn’t know what the indemnity agreement actually says because the military considers it classified. Until recently, the veterans exposed to the toxin couldn’t know either, nor could attorneys at the Department of Justice, who were left battling the contract in the dark, according to a source there.

Michael Doyle, a Houston-based lawyer who helped the successful suit against KBR, told The Huffington Post the military declassified the indemnification agreement on Dec. 21 and gave it to him under a protective order that banned him from sharing the language to parties not involved in the case. John A. Elolf, a spokesman for KBR, confirmed the declassification of the agreement and said the contractor also was prevented from providing a copy. HuffPost has requested the document under the Freedom of Information Act from the Corps of Engineers.

Doyle said the agreement may mean a taxpayer “bailout” for KBR. “It’s basically saying that no matter if we’re guilty of — willful misconduct, poisoning soldiers — taxpayers have to pay to cover us as well as whatever we decide to pay on lawyers at whatever rates and all these fees,” Doyle said. “That’s a pretty good bailout.”

Elolf, the KBR spokesman, said the company sought the indemnification agreement because its work was “performed under dangerous conditions in Iraq.” He said the government is required to indemnify KBR for claims arising from its restoration work.

“To date, the U.S. government has failed to comply with its indemnification obligations,” Elolf said in an email. “KBR is confident that it will prevail in enforcing the U.S. government’s legal obligations.”

It’s unclear how many defense contractors have secret indemnification agreements with the military. Under the law, most government agencies are banned from entering open-ended indemnification agreements, but the Pentagon and a handful of other agencies were exempted in an executive order signed by President Richard Nixon in 1971.

KBR originally claimed it didn’t know about the deadly toxin until the spring of 2003. Documents produced in the lawsuit, however, revealed that KBR knew the chemical was being stockpiled and used in massive quantities at the water treatment facility as early as January of that year. Prior to the U.S. invasion, Iraqi workers would treat water at the plant with sodium dichromate before injecting it under pressure into the ground, driving oil to the surface. Sodium dichromate helped increase the life of pipelines and pumps by preventing corrosion.

Soldiers assigned to guard the facility said the chemical dust came from bags stacked both inside and outside the plant, which some soldiers would sit on or use for protection from the wind. Wind spread the orange powder from the thousands of 100-pound bags. Gentry estimated the dust covered about half the plant’s area.

“There were soldiers that actually brought it up, asked what it was, and they were told it was a mild irritant at first,” Rocky Bixby, 45, a plaintiff in the Oregon National Guard suit that bears his name, told HuffPost.

“They had this information and didn’t share it,” Gentry said in a deposition two days before his final Christmas, in 2008. “I’m dying now because of it.”

Another soldier, Larry Roberta, now 48, was exposed to the chemical after a gust of wind blew it into his eye and into a chicken patty he was eating. After washing his face and mouth, he tried washing the chicken, because it was the only food he had left for the day. “It tastes like a mouthful of nickels,” Roberta said. “I just kept washing my mouth and I couldn’t get that taste out.”

Roberta said he now requires an oxygen tank because he has less than 60 percent of his lung function and gets migraines stemming from the eye that was exposed to the chemical. He had surgery to fix the muscle at the top of his stomach that prevented food from coming back up. “I can’t throw up, I can’t even burp,” Roberta said. “You know, when you can’t burp, the air has to come out the other end, which makes me the stinky dog that nobody wants to let in the house.”

Roberta said he doesn’t think U.S. taxpayers should have to pay for KBR’s mistakes.

“The United States Army Corps of Engineers is not in the business of restoring oilfields, therefore they hired KBR as their subject expert,” Roberta said. “KBR was paid a good sum of money to do a job and unfortunately it didn’t get done well. … The end results were okay, but they made some mistakes along the way.”

Gentry’s wife said the “bailout” fits a KBR pattern.

“Whether it’s morally, ethically or even fiscally, there was no accountability then and there is no accountability now,” LouAnn Grube Gentry told The Huffington Post. “In fact, they continue their negligence and indifference. And just as an example of that is they continue to overbill the government for the legal fees. And to me that in itself proves that they are profit-mongering and their sole motivation is profit.”

Gentry said her husband initially declined to get involved in the litigation because of his loyalty to the National Guard and the Army. Gentry even praised KBR’s work during his second tour in Iraq, calling company safety measures “top grade” during a deposition. He decided to join the litigation late in his life because he felt KBR was being dishonest about what it knew about the chemical.

“Once KBR denied accountability, denied knowing, my husband became very angry,” Gentry said.

A federal jury in Oregon found on Nov. 2 that KBR negligently exposed troops to the toxic dust and ordered the company to pay $85 million in noneconomic and punitive damages to the Oregon National Guard members. A separate suit against KBR on behalf of national guardsmen from both Indiana and West Virginia, as well as troops from the U.K., is pending in federal court in Houston. That case awaits a decision from the U.S. Court of Appeals on whether the case can proceed with claims based on wartime activity.

Bixby, who said he was at the water treatment plant for as many as five days, said it makes no sense for taxpayers to pick up the bill for KBR’s mistakes.

“I think it’s fraudulent and I think it’s criminal on their part to do this,” Bixby told HuffPost.

Secret indemnity agreements shouldn’t be a problem in the future, because of a provision in the National Defense Authorization Act of 2013 pushed by Sen. Ron Wyden (D-Ore.). The act requires the Pentagon to disclose indemnification clauses that hold military contractors harmless and to justify the agreements to Congress.

“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 in a statement last month. “Thanks to that plum deal, KBR could be let off the hook after negligently exposing Oregon servicemembers to toxic chemicals. Some indemnification agreements are justified, but many are not, and the Pentagon should have to justify these agreements to Congress.”

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