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Huffington Post Acquires KBR’s Indemnity Clause, Authorization Came from Former Enron Exec

Through the Freedom of Information Act, The Huffington Post reported today that it has acquired the signed indemnity agreement between the United States Army and KBR (at the time known as Kellogg, Brown, and Root).

The Army official that signed the agreement at the insistence of the Houston-based private contractor was a former Enron executive. Thomas E. White was named secretary of the Army in 2001. He signed the agreement on March 19, 2003 after considering “the availability, costs and terms of private insurance to cover these risks, as well as the viability of self-insurance, and have concluded that adequate insurance to cover the unusually hazardous risks is not reasonably available.” His memo concluded that the use of the “indemnification clause in this contract will facilitate the national defense.”  There is no indication that KBR disclosed at the time of the contract-add any information or knowledge KBR had about the longstanding, widespread use of hexavalent chromium at Qarmat Ali, or any other specific hazard to the troops and other men on the ground at KBR’s work sites.

White resigned his position as secretary on April 23, 2003 amid questions about his ties to Enron Corp. He sold millions of dollars in stock in 2001 and claimed it was a requirement under government ethics rules. White and his wife were also investigated by the Pentagon’s inspector general for using a military jet for personal travel.

The language of the no-bid, cost-plus with award fee contract relates to the bellwether trial against KBR in Oregon where 12 veterans were awarded more than $85 million in damages stemming from KBR’s knowing exposure of the men to hexavalent chromium at Qarmat Ali. The additional “bailout” agreement, which was demanded by KBR after initially grabbing the multi-billion dollar no-bid, cost-plus award fee contract for Iraqi oilfield reconstruction, purports to shield the company from various liabilities, including financial costs associated with unusually hazardous risks including “sudden or non-sudden release of hydrocarbons or other toxic or hazardous substances or contaminants into the environment.”

KBR is now pursuing the government to pay the $85 million verdict and more than $15 million in legal fees, as well as the damages that may be owed to the more than 150 veterans whose cases are still awaiting trial. These lawsuits involve soldiers from Indiana, West Virginia and the UK.

Doyle stands behind these veterans and their fight for justice. Clearly this is simply another effort by KBR to shirk their responsibility for their misconduct.