The Enid News and Eagle, Enid, OK

Local and State News

January 27, 2014

Company accused of false claims 9 years after man spoke to News & Eagle

ENID, Okla. — In 2005, an Enid man talked with the Enid News & Eagle about the time he spent with a company offering services to the Army during the war in Iraq.

Bud Conyers told a reporter he was disturbed about the poor condition of equipment and the dangers he and other truck drivers faced while working as civilian contractors for a subsidiary of Halliburton.

Conyers drove trucks and heavy equipment from May 2003 to January 2004, hauling everything from tanks to ice, for Kellogg Brown and Root, a division of Halliburton that was contracted to provide services for the U.S. military in Iraq.

At the time, Conyers was looking for a way to tell his story. He was interviewed for a story by adult magazine Hustler, which was to hit store shelves the week following his story in the Enid News & Eagle.

On Friday, the Department of Justice announced the government had filed a complaint against Kellogg, Brown & Root Services Inc. and Kuwaiti companies La Nouvelle General Trading & Contracting Co. and First Kuwaiti Trading Co. for submitting false claims in connection with KBR’s contract with the Army to provide logistical support in Iraq.

A press release from federal prosecutors acknowledges the role Conyers played as a whistleblower.

“Some of the allegations contained in the government’s complaint were originally alleged in a lawsuit filed in a federal court in Houston by a whistleblower, Bud Conyers, under the qui tam provisions of the False Claims Act.”

In a qui tam suit, the whistleblower who brought the suit is entitled to a percentage of the recovery of the penalty.

KBR is an engineering, construction and services firm headquartered in Houston, Texas. Kuwait-based La Nouvelle and First Kuwaiti provided transportation, maintenance and other services in support of KBR’s contract with the Army.

The government is alleging KBR made claims to the government, knowing them to be false, under a contract with the Army to provide wartime logistical support.

The awarding of the contract paved the way for the company to become a critical source for logistical support services in Iraq, which included transportation, maintenance, food, shelter and facilities management. KBR performed many of these services through subcontracts awarded to foreign companies local to the region, such as La Nouvelle and First Kuwaiti.

In its complaint, filed in federal court in Rock Island, Ill., the government alleged that, in 2003 and 2004, KBR employees took kickbacks from La Nouvelle and First Kuwaiti in connection with the award and oversight of subcontracts awarded to these companies, according to a release from federal prosecutors. KBR then claimed reimbursement from the government for costs it incurred under the subcontracts that allegedly were inflated, excessive or for goods and services that were grossly deficient or not provided.

“For example, KBR allegedly awarded La Nouvelle a subcontract to supply fuel tankers for more than three times the tankers’ value,” according to the release. “La Nouvelle later rewarded the KBR employee who awarded the subcontract with a $1 million bank draft.”

KBR also is accused of making payment to a subcontractor for trucks and equipment that already had been returned.

“The lawsuit also alleges that KBR used refrigerated trailers to transport ice for consumption by the troops that had previously been used as temporary morgues without first sanitizing them,” according to the release.

This is one allegation specifically mentioned by Conyers in the Enid article.

“What particularly outraged Conyers was seeing the use of a refrigerated truck to transport dead bodies and then seeing the same vehicle used to transport potable ice for consumption by U.S. troops,” the story reads.

“I got documentation of it. They didn’t even clean it,” Conyers said.

The False Claims Act authorizes private parties to sue, on behalf of the government, companies and people they believe have falsely claimed federal funds and to share in any recovery. The act also allows the government to intervene and take over the action, as it has done in this case. The government notified the court earlier this year that it was intervening in Conyers’ case and intended to file its own complaint with additional allegations.

Halliburton officials did not respond to an email seeking comment.

The case is captioned United States ex rel. Conyers v. Kellogg Brown & Root Inc. et al.

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Enid News & Eagle photos taken throughout February 2014. Enjoy full-access all ENE photos at http://enidnews.smugmug.com