Defense Base Act Compensation Blog

The Modern Day DBA Casualty

TOO BIG TO FAIL: The KBR-AIG Dream Team

Posted by defensebaseactcomp on November 20, 2009

Thanks to DC Bureau and Adam Lichtenheld

In late August 2003, medical testing of KBR employees at Qarmat Ali found elevated levels of total chromium in their blood. Total chromium is comprised of trivalent chromium—an essential and naturally occurring nutrient—and hexavalent chromium, the cancer-causing industrial component of sodium dichromate. In order to adequately determine if its workers were poisoned by sodium dichromate, KBR needed to separate out hexavalent chromium from the blood tests—a difficult and time-consuming process that usually requires a special laboratory.

But no such effort was even attempted. The reason, according to KBR Medical Director Robert Conte, lies in an archaic legal precedent, one that has forbidden sick KBR workers, such as Mr. Blacke and Mr. Langford, from seeking legal redress.

Under the Defense Base Act of 1941, private contractors working for the military are protected from legal liability for injuries suffered by their employees. Under the DBA, contractors transfer a work-related claim to a government insurer, which handles the claim and determines compensation. For KBR workers who became too sick to work at Qarmat Ali, this meant that their appeals for unemployment and disability benefits were turned over to American International Group, Inc, the world’s largest insurance company and the government’s handler of 90 percent of all DBA cases.

Since AIG retained full responsibility for KBR’s claims, it was at their discretion—not KBR’s—whether to follow up by ordering further blood tests. Determining the amount of hexavalent chromium in workers’ blood would have been critical to link their illnesses to the exposure at Qarmat Ali, thus making them eligible for worker’s compensation. AIG decided against it.

“When AIG picked it up, we figured they’d just follow up and do what they thought necessary at that point,” said Dr. Conte in a sworn deposition videotaped last year.

The Defense Base Act is a lucrative and low-cost deal for companies like AIG. Since the insurance giant works for the government in DBA cases, both premiums and payout claims are paid for by public funds. As a result, when AIG overcharged KBR tens of millions of dollars for DBA insurance in the first several years of the Iraq war—as the Army Audit Agency eventually discovered—U.S. taxpayers footed the bill. The findings of the audit investigation surfaced last fall, around the time that AIG was rescued from financial ruin by an $85 billion taxpayer bailout.

KBR, meanwhile, continues to use the DBA to shield it from accountability.

“KBR took the attitude…that there was nothing anyone was going to be able to do about [Qarmat Ali] because they were immune from lawsuit and/or any other accountability,” Langford said.

Original Story here

One Response to “TOO BIG TO FAIL: The KBR-AIG Dream Team”

  1. Barry said

    I have faith that God will hold us all accountable, including KBR and AIG, and those responsible in the U.S. government will also be held accountable for blatantly ignoring KBR and AIG and many more insurance companies extreme injustices that cause so much suffering on earth

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