House Rips Pentagon Insurance Contracts

Says Civilian Employees Are Being Shorted Of Benefits While Companies Pocket Big Profits

(AP)  A poorly run Pentagon program for providing workman's compensation for civilian employees in Iraq and Afghanistan has allowed defense contractors and insurance companies to gouge U.S. taxpayers, a House of Representatives oversight committee said Thursday.

Insurance companies alone have pocketed $600 million in excessive profits over the past five years, says a staff report from the House Oversight and Government Reform Committee, but the Defense Department refuses to adjust its approach for managing the program.

According to the committee, the Pentagon allows its contractors to negotiate their own insurance contracts. By contrast, the State Department, U.S. Agency for International Development and the Army Corps of Engineers have all selected a single insurance carrier to provide the insurance at fixed rates.

"What makes the situation even worse is the people this program is supposed to benefit - the injured employees working for contractors - have to fight the insurance companies to get their benefits," committee Chairman Henry Waxman, a Democrat, said at a hearing Thursday. "Delays and denials in paying claims are the rule."

KBR Inc., one of the largest defense contractors in Iraq, paid the insurance giant AIG $284 million for medical and disability coverage under the Defense Base Act, a reference to the federal law mandating the insurance. Due to the way KBR's contract is structured, this premium, along with an $8 million markup for KBR, gets billed to the taxpayer.

"Out of this amount, just $73 million actually goes to injured contractors, and AIG and KBR pocket over $100 million profit," Waxman said.

All contractors doing work overseas for the Corps of Engineers or any other U.S. government agency are required to insure their civilian employees, many of whom are handling dangerous jobs in hostile areas. Contractors get the coverage from private insurance companies, then they're reimbursed for what they spend. The insurance costs are included in the contract's overall price.

The Associated Press reported Wednesday that the Army Criminal Investigation Command has opened a probe into two companies working on Iraq reconstruction that have been accused of padding their profits by claiming reimbursements for insurance coverage they never purchased.

The investigation of two companies located in Tikrit - Sakar al-Fahal and al-Jubori - led the Army Corps of Engineers to scour its records for evidence of fraud by other contractors hired with billions of U.S. dollars to help rebuild Iraqi infrastructure devastated by the war.

Rep. Darrell Issa, a Republican, asked what the Corps of Engineers is doing to stop other companies from bilking the federal government for unpaid insurance benefits.

James Dalton, chief for engineering and construction for the Corps of Engineers, said contracting officers are trained to look for signs of fraud.

The case involving the Iraqi companies, Dalton said, "was found through routine oversight of our contracts."

[keithle1]

When will they learn? What''s it going to take? It''s like putting a fat mouse in a snake''s cage & expecting the snake not to eat it.

[sjc_1]

If the Democrats pick up seats in Congress in November, we may see some real action on all this greed, corruption and graft on the part of Republicans and big business. They are the ones that profit from no bid contracts at the expense of the American tax payers.

[mo005]

These people don''t give a rats a-ss about what we think about it. This country is going down at the hands of the people we have intrusted with our nation. We are making them a great living at our exspense. I love america, doesn''t mean I love my goverment. I think the goverment is as corupt as these terrorists we are fighting over seas. They are no different then saddam hussein. We can vote bart simpson into office , but it will still be the rich for the rich not for the people. I am ashamed of this goverment. But thats all I can be because, I am not rich and cannot afford to fight them. Until we restructer our goverment it is going to slowly become worse to the point china, mexico or some other country will own us. To me it is a shame , just a shame.

[killface7]

Thieves and scum. taking this $$ while our US Soldiers fight and die without being properly armed and medically cared for. A most gruesome administration, full of Death, Greed, Torture. Hitler and Stalin and Musso would be proud of the US, and a little scare of us. Muck out the lot. Get some fresh blood and minds. These *** need to be on the Dock at the Hague. The next administration MUST HOLD THEM ACCOUNTABLE!

[jjp735i]

More money wasted, err stolen from the tax payer. Now the hearing and inthe end no one will have to pay it back and no one, but some pee on will be guilty.

That''s how Congress works.

[forthepeopl1]

AS ALLWAYS BLA,BLA,BLA,BLA,

I THINK I WILL ROB BANK AND CLAIM, I WAS TOLD BY THE BUSH ADMINASTRATION IT WAS OK

[forthepeopl1]

common sense is all that is needed.here it is.
U.S. Treasury Secretary Paulson possibility of bailout for individual mortgage holders, singling out the growing number
going "under water" as their loans exceed the diminishing value of their properties.

please this is a simple thing to fix, why are you bending over for all of the wallstreet scum.
you have the right to do what this paulson/ben did for wallstreet,saying they had to to save america. so you can say the same thing, but this time you would be saveing america, and not wallstreet.
you must come out and stop the forcloseing of all these millions of homes, now,
ALL YOU HAVE TO DO IS MANDATE THAT ALL MORTGAGES THAT HAVE BEEN TAKEN OUT FROM 2000 TO 2007 BY ALL AMERICANS TO BE RE-FI A.S.A.P. NO EXCEPTIONS,


NO MATTER WHAT THE CREDIT IS, THEY WILL RE-FI EVERYONE AT JUST OVER PRIME, AND AT A RATE OF 40% OF WHAT IS OWED ON THE PROPERTY( PERSONAL HOMES ONLY)!!
WHY, BECAUSE MOST HOST ARE SELLING AT FORCLOSER FOR 20 TO 30 CENTS ON THE DOLLAR, SO AS TO WHAT PAULSON SAID TO BEARSTEARN 2 DOLLARS IS BETTER THAN NO DOLLARS SO TAKE THE DEAL..NOW REMEMBER ALL OF YOU, IF THIS COMPANY IN 6 MONTHS LOST 98% OF THEIR VALUE FROM 700 BILLION TO WHAT IS IT NOW. AND FOR SOMEONE TO COME IN AND BUY IT FOR NOTHING, WHAT IS THE REAL VALUE OF ALL THESE HOMES???NOBODY KNOWS, SO WHY NOT JUST START OVER??? AND STOP THE BLEEDING FOR ALL AMERICANS.

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DAVID A BELANGER