Dozens Of Major Military Contractors Granted Legal Immunity

NEW YORK -- Taxpayers may be on the hook if U.S. military contractors in Iraq incur liability while carrying out their work.

More than 120 military contracts include indemnification clauses -- essentially, promises that the Pentagon will pick up the tab if contractors are sued. The information was disclosed on Thursday in response to an inquiry by Rep. Earl Blumenauer (D-Ore.), who was concerned that contractor Kellogg Brown Root was granted indemnity amid a lawsuit claiming that the Halliburton subsidiary knowingly exposed soldiers to cancer-causing chemicals in Iraq, as previously reported by The Huffington Post.

Though Blumenauer said the Pentagon appears to show a "diligent, responsible process for work carried out in the United States that protects taxpayers from liability in cases of contractor negligence," he expressed concern about what he called "far looser standards" for work in Iraq.

The list of contractors include major airlines American, Continental and United, as well as military contractors Raytheon Missile Systems, General Dynamics, L3, Lockheed Martin, BAE, and Boeing. Other indemnified companies include Mason and Hanger, a company which stores and transports containers of the nerve agent VX, and several firms that maintain facilities to destroy chemical agents.

Few details appear in the documents released by the Department of Defense, although the Army does describe a $646,351.50 payment to anthrax-vaccine maker Emergent to cover the costs of two lawsuits brought by U.S. soldiers who claimed they were sickened by the vaccine. In one class-action suit, Ammend et al v. BioPort, the plaintiffs claimed that the Emergent subsidiary BioPort caused them to "suffer extreme pain and suffering" through its carelessness and negligence. In several other similar cases, the Pentagon refused to pay the contractor's litigation costs.

With Rep. Kurt Schrader and Sens. Ron Wyden and Jeff Merkley, all fellow Oregon Democrats, Blumenauer introduced legislation in September that would require regular reporting to Congress of contracts that contain such clauses.

WATCH:

Comments

[dashingdwl]

03:39 PM on 12/04/2010

Funny that the US State Department still uses Blackwater for all their travel security in Iraq. It pays to be the best!

[conservicide]

03:23 PM on 12/03/2010

Can someone publish the who.red out chain-of-command that passed and signed those contracts?

[Naithom]

04:06 PM on 12/03/2010

Yes, please.

[disgustedcitizen]

02:51 PM on 12/03/2010

Ah, the crimes of the bush/cheney regime will be with us for decades.

[jk1340]

11:58 AM on 12/03/2010

Sounds like Department of Defense needs to reconsider the type of outsourcing contract it uses. Historically, the US tends to negotiate cost-plus contracts. The Department of Energy deviated from standard outsourcing practice when it awarded a performance based management contract to Kaiser-Hill Company, LLC (K-H). The Rocky Flats Closure Project represents the first time, anywhere in the world, complete closing nuclear plant facility was attempted. The project culminated in 2005, about 60 years earlier and $30 billion dollars less than original estimates. The contract offered more than financial incentive; it offered more equitable distribution of risk. If Kaiser Hill did not achieve results, they did not get paid. They accepted health and safety risks. Even the common practice of extending a line of credit was changed.
K-H paid its own expense and submitting vouchers for payment. So it can be done and it certainly seems as though the DOD could benefit from looking into alternatives. I.e. read the book "Vested Outsourcing: Five Rules that Will Transform Outsourcing." Under Vested Outsourcing the company pays only for results, not transactions. When outcomes are mutually defined, the providers propose solutions that deliver the required level of performance at a predetermined price. This approach fundamentally shifts the business model, shifting risk from the company that is outsourcing (or, in this case, the government) to the service provider(s).
In this tight economy, deficits and wars people don’t like much, choosing a different way to outsource sounds like a dandy plan

[skepticreally]

11:42 AM on 12/03/2010

I have never come to terms with "reconstruction". I've heard the justification; get them back on their feet ASAP so they can be a stable and productive nation/economy and no longer a anti-american political state. Then why did we invade old school style? Whats the current state of infrastructure in Iraq's cities? Add up the cost; lives on both sides, loss of revenue from an absence of stability in the countries previous economic sector, reconstruction, indeterminable secular civil wars, the cost of military operations and occupation, ect....... Now the flood gates are about to open to reparations. "We don't have to try to sue _______, we can sue the U.S. government, and they'll settle out of court. Just what we don't need. Thanks congress. What I really want to say to congress is GOODBYE, YOUR FIRED!

[zooperman]

10:15 AM on 12/03/2010

All the benefits - no risk to the companies. Is this the makings for the next government scandal??

[pj-smith]

12:44 PM on 12/03/2010

there are too many to tally.
no accountability. No one pays for mistakes except those of us who have no voice anymore.

theY pile on and we have no one representing us. OFF WITH THEIR HEADS!

[Shebagirl]

09:55 AM on 12/03/2010

Kudoes to HP for printing this story - we wouldn't be getting this information with the MSM.

[turamali]

09:46 AM on 12/03/2010

Aren't the taxpayers expected to pick up the bill on everything, every vice, every transgression, every bad decision made by this government; and lets face it the military contractors are a runaway train accountable for nothing.

[pj-smith]

12:45 PM on 12/03/2010

STOP PAYING TAXES.REFUSE.
If we all did, how could they prosecute?

NO TAXATION WITHOUT REPRESENTATION!

[Veri]

09:45 AM on 12/03/2010

Ah, the emergence of the Corporate States of America continues. Now, if a soldier dies because of a private contractor, his previous taxes go to pay for the contractor liabilities. Dead soldiers paying for the faulty work that caused their death.

And, still... America sleeps.

[totaldisbelief]

09:25 AM on 12/03/2010

more privatize the profits...socialize the losses why not just stick a gun in our faces?

[phoenixbc]

08:51 AM on 12/03/2010

So where are the Tea Whiners, in the wake of this news?

The granting of immunity or even indemnification to a business for any harm that it might cause to a U.S. citizen is the very combining of business and government that the Tea Whiners have decried as "Socialism". We don't even give that kind of promise to doctors who treat patients enrolled in Medicare or Medicaid, the two favorite "social program" targets of the Tea Whiners.

Funny how they love to protect Haliburton, General Dynamics, and the other darlings of the Republican Party.

[The Dude67]

08:34 AM on 12/03/2010

It's just money.  If we raise taxes we'll have enough to cover all of the fraud, waste and corruption in Washington D.C.

[terramartom]

08:33 AM on 12/03/2010

GOD damn Bush!!!

[plebian3]

09:39 AM on 12/03/2010

It'd be more productive to put pressure on the enablers who remain in office, regardless of party affiliation (that'd be the R or D wing of the Corporate Party USA).

[pj-smith]

12:47 PM on 12/03/2010

AND THE HOLY REST OF 'EM...YOU CANT BLAME THIS ON BUSH.

[plebian3]

08:32 AM on 12/03/2010

http://www.warisaracket.org/

[just sayin]

08:30 AM on 12/03/2010

I'm sorry but they have a good point here. The govt has decided to contract out work that has traditionally been done by the military. If they want private contractors to work in (effectively) combat areas and do things that involve a high degree of risk (the same functions that the military previously performed) then the govt will have to cover the liability. No private insurance is going to bond these sots of operations.

[phoenixbc]

08:45 AM on 12/03/2010

These firms are paid a premium for this work. They are paid far in excess of what would traditionally be considered "fair market value". For that, they should have the risk.

Haliburton, in particular, was selected years ago by the U.S. Government, at the suggestion of Cheney and Rumsfeld, to be an all-purpose, all-things contractor, for the rebuilding of countries harmed by war. They received grants, tax breaks, and favorable treatment, above all other contractors, for that purpose. If they can't be responsible, and if they can't carry the risk, then they shouldn't have the luxury of that status.

[just sayin]

09:06 AM on 12/03/2010

I would certainly charge a premium, too - and want to be indemnified. This is unique and dangerous stuff.

It's difficult to say what the FMV for this sort of thing is. Haliburton was selected on a no-bid basis because there were only a few companies with the size and resources to do the work - and even fewer that were U.S. companies. I think that whole concept of contracting this sort of stuff out is a bad idea but if you're going to do it you can't stop a war to get bids.