March 16, 2011
KBR Managers Got Kickbacks From Subcontractor in Iraq, Kuwait, U.S. Says
KBR Inc. (KBR) managers in Iraq and Kuwait took $45,000 in kickbacks from a dining facility subcontractor from late 2002 through 2003, the U.S. said in a lawsuit.
Terry Hall, who was KBR’s regional food services manager for the two countries, and his deputy, Luther Holmes, were accused of violating the False Claims Act and the Anti-Kickback Act yesterday in U.S. claims court in Washington. The allegation came as a counterclaim in a 2009 lawsuit against the government by Houston-based Kellogg Brown & Root Services Inc., a KBR unit seeking $41 million for an alleged breach of contract.
“Kickbacks in military subcontracts open the door to wartime profiteering and corrupt the integrity of our government contracting process,” Assistant Attorney General Tony West, who oversees the civil division, said in a statement. “When we learn of such illegal conduct at the expense of taxpayers, we will pursue it.”
The U.S. alleges the kickbacks were made by Mohammad Shabbir Khan, vice president of Tamimi Global Co., which is based in Dhahran, Saudi Arabia. During the time the payments were made, KBR awarded Tamimi contracts worth more than $400 million, the U.S. says, according to the Justice Department.
Gabriela Segura, a spokeswoman for KBR, said in an e-mailed statement that the Justice Department is seeking to set aside the entire value of a contract based on “some vague allegation of wrongdoing” that is “not supported by facts or law.”
Segura said that when the Army asked KBR to provide food services in support of the military in Kuwait, it already was using Tamimi for food services in Kuwait and Iraq and directed KBR to use Tamimi as a subcontractor in Kuwait, Segura said.
“Despite knowledge of various alleged improprieties by Tamimi, the Army continues to contract with Tamimi for such services today,” Segura said.
The case is Kellogg Brown & Root Services Inc. v. U.S., 09- 351, U.S. Court of Federal Claims (Washington).
http://www.bloomberg.com/news/2011-03-16/kbr-managers-got-kickbacks-from-subcontractor-in-iraq-kuwait-u-s-says.html
