ETHICS

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster


More Money, More Problems

With an estimated $16 billion in defense contracts, KBR is by far the largest contractor in Iraq, "with eight times the work of its nearest competitor." The firm has 54,000 people working on its projects in Iraq. Until last year, KBR operated as a subsidiary of Halliburton, the oil services conglomerate over which Vice President Cheney once presided. Prior to the Iraq war, KBR received no-bid contracts from the Bush administration to "rebuild Iraq's oil infrastructure" and to "provide support services to troops." The company has profited handsomely from its sweetheart deals, racking up a $71 million profit in the fourth-quarter of 2007 alone. Yet for all the financial success it has attained, KBR has repeatedly engaged in abusive corporate practices and has shirked its duty to preserve and protect those men and women who are serving on the front lines of war.

DON'T DRINK THE WATER: According to a new report from the Pentagon Inspector General, dozens of American troops in Iraq fell sick at bases using "unmonitored and potentially unsafe" water supplied by KBR. The Associated Press writes that the medical records for troops at one KBR-run site indicated "38 cases of illnesses commonly attributed to problem water. These include skin abscesses, cellulitis, skin infections and diarrhea. Doctors diagnosed 24 of the cases in January and February 2006, the same period when medical officials warned of a rise in bacterial infections at the base." In January 2006, former Halliburton employees accused the company of "supplying contaminated water to American troops and Iraqi civilians at a marine base in Ramadi." In an internal e-mail, a Halliburton employee warned, "The level of contamination was roughly 2x the normal contamination of untreated water from the Euphrates river." Halliburton denied the allegations, and more soldiers continued to fall sick because of the water. Sen. Byron Dorgan (D-ND), who has led investigations in contract abuses, said, "I think it's outrageous that KBR tried to deny that there was a problem, especially when it turned out that there were dozens of U.S. troops reporting water-related illnesses."

DODGING SOCIAL SECURITY AND MEDICARE TAXES: Despite the massive profits KBR has been earning, it has worked hard to shelter those revenues from the U.S. government and its own employees. According a detailed investigation by the Boston Globe, KBR has "avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies" based in the Cayman Islands -- a scheme established by Halliburton under Cheney's tenure. In doing so, the firm deprived KBR employees of guaranteed future retirement benefits and unemployment insurance should they lose their jobs. Since at least 2004, the Pentagon has known about KBR's practices, but has chosen to ignore the issue. The use of the shell companies to divert millions from Social Security and Medicare gives KBR an unfair advantage over its rivals, almost all of whom pay the federal taxes. "It is both shocking and disappointing that some American companies continue to exploit our system in wartime by setting up shell corporations via a tax haven mailbox," said Rep. Richard Neal (D-MA). "You have to wonder why the Pentagon continues to do business with these contractors who skirt the rules."

COVERING UP RAPE: There is one circumstance in which KBR does claim its employees as its own: "when it comes to receiving the legal immunity extended to employers working in Iraq." When former KBR employee Jamie Leigh Jones revealed late last year that she was gang-raped by her co-workers while serving in Baghdad, the company pushed hard for the case to be heard in private arbitration, without a public record or transcript. "Legal experts say Jones' alleged assailants will likely never face a judge and jury, due to an enormous loophole that has effectively left contractors in Iraq beyond the reach of United States law." Last week, lawyers for Jones argued that her case should be "tried in court, not settled in private arbitration," but KBR insists her contract binds her to settle all claims through arbitration. Rep. Ted Poe (R-TX) has said his office has been contacted by other KBR employees who say they were sexually assaulted in Iraq. The Pentagon has refused to investigate these cases, and thus far, the Bush administration "has not offered to develop a coordinated response to the problem."

"Vice President Dick Cheney will visit the Middle East next week and meet with leaders of Saudi Arabia, Israel, the Palestinian West Bank and Turkey." Cheney's office did not provide any details of what issues would be discussed during the trip.

The Senate Intelligence Committee is set to release "a detailed critique of the Bush administration's claims in the buildup to war with Iraq." The report "reaches a mixed verdict" on whether "the White House misused intelligence to make the case for war," but it does criticize White House officials for "making assertions that failed to reflect disagreements or uncertainties in the underlying intelligence on Iraq."

In a CBS 60 Minutes interview that aired yesterday, Sen. John McCain (R-AZ) promised to release his medical records "sometime in the next month or two." Yet so far, campaign officials have assured reporters at least three times since March 2007 "that they would provide the detailed information" about the senator's health, "but they have not done so."

Average U.S. gas prices "have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn." Prices increased "about 9.44 cents per gallon in the past two weeks" and "64 cents per gallon in the past 12 months."

Climate change research published in separate journals over the past few weeks from scientists from around the world has a "simple message: The world must bring carbon emissions down to near zero to keep temperatures from rising further."

Children in Iraq "have been more gravely affected by the U.S. occupation than any other segment of the population." According to the United Nations, "at least two million Iraqi children lack adequate nutrition" and "only 40 percent of children nationwide have access to safe drinking water."

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