New York Times: Exec pleads guilty in Iraq contractor bribery scheme
Published: Friday July 20, 2007
Print This  Email This

As the New York Times reports in its Saturday edition, at least eight people connected to former Halliburton subsidiary KBR (formerly Kellogg, Brown and Root), so far receiving $20 billion for war-related services, have been implicated in an investigation into kickbacks and bribes stemming from a scheme to overcharge for freight services to Iraq.

Kevin Andre Smoot, managing director for KBR subcontractor Eagle Global Logistics Incorporated, pleaded guilty to dispensing the bribes along with lying to investigators.



The guilty plea by Mr. Smoot is the second by an Eagle executive in the case. But the papers describing his plea indicate that investigators believe at least one more Eagle employee and five KBR employees, all so far unnamed, were also involved. Mr. Smoot alone admitted to delivering bribes, called gratuities in the legalistic language of the court papers, to the employees of KBR on some 90 occasions between 2002 and 2005.

The company hired Eagle in a subcontract to fulfill part of that mission, carrying military goods from Dubai, United Arab Emirates, to Baghdad. But the scheme by the Eagle executives began in November 2003 when a plane operated by a rival carrier, DHL, was struck by a missile and landed in Baghdad with its left wing in flames. The Eagle executives used that incident to charge a fraudulent “war-risk surcharge” of 50 cents for every kilogram (2.2 pounds) of freight on its own flights, the papers say.

Between November 2003 and July 2004, Eagle made 379 flights as part of the subcontract, charging some $13.3 million — an amount that included $1.1 million in overcharges. It is not clear whether KBR knew of the overcharging scheme, but the papers say that Mr. Smoot and an Eagle subordinate delivered nearly $34,000 in gratuities to KBR employees “to obtain or reward favorable treatment” in connection with the contract.


The entire New York Times article can be read HERE.