$85 million awarded to 12 Oregon soldiers; KBR guilty of negligence, not fraud

Oregon Live  November 2, 1012

A Portland jury found defense contractor KBR Inc. was negligent, but did not commit fraud against a dozen Oregon Army National Guard soldiers who sued the company for its conduct in Iraq nine years ago. Magistrate Judge Paul Papak announced the decision about 3:35 p.m. the U.S. Courthouse in Portland. Each soldier was awarded $850,000 in non-economic damages and $6.25 million in punitive damages.

“It’s a little bit of justice,” said Guard veteran Jason Arnold, moments after the verdict was announced Friday afternoon. Arnold was one of four of the soldier-plaintiffs in the courtroom was the verdict was read.

The verdict should send an important message to those who rely on military troops, he said.

“We’re not disposable,” said another soldier, Aaron St. Clair. “People are not going to make money from our blood.”

KBR’s lead attorney, Geoffrey Harrison, said the company will appeal.

“We will appeal the jury’s incorrect verdict,” he said. “We believe the trial court should have dismissed the case before the trial.”

Harrison said the soldiers’ lawyers produced a medical expert, Dr. Arch Carson, who offered “unsupported, untested medical opinions” that each soldier had suffered invisible, cellular-level injuries as a result of their exposure to hexavalent chromium.

The verdict means the jury did not hear clear and convincing evidence that KBR intended to deceive the soldiers in the way it operated at the Qarmat Ali water treatment plant, near Basra, Iraq. But they did find that the company failed to meet its obligations in managing the work at the plant.

Friday’s verdict closes the first phase of a web of litigation between National Guard and British troops against KBR Inc., the defense contractor they accuse of knowingly exposing them in 2003 to a carcinogen at Qarmat Ali. KBR has denied the accusations.

In Oregon another set of Oregon soldiers are waiting in the wings for their day in court. Magistrate Judge Paul Papak and the attorneys agreed earlier to hold an initial trial with the first 12 soldiers, in order to keep the proceedings from becoming too unwieldy. A second trial, featuring all or some of the remaining 21 plaintiffs, could begin in federal court in Portland this winter.

Another lawsuit brought by Indiana soldiers against KBR is on hold in federal court in Texas, while an appeals court considers a jurisdictional issue.

The cases stem from the chaotic aftermath of the U.S.-led invasion of Iraq in March 2003. The Army Corps of Engineers hired KBR Inc. to run a massive program called Restore Iraqi Oil. The program involved dozens of sites throughout Iraq — sites that neither the Army nor KBR had visited before the invasion. The project was intended to quickly restore the flow of Iraq’s oil, partly to fund the war. The Pentagon remembered the way Saddam Hussein had lit the fields on fire during the first Gulf War, and feared a repeat in 2003.

Qarmat Ali was a compound where water was pumped underground to drive oil to the surface elsewhere. For decades, Iraqis had treated the water with sodium dichromate, an anticorrosion agent that contains hexavalent chromium, a known carcinogen. (Sodium dichromate is banned in the United States.)

Iraq’s Southern Oil Co. took delivery of sodium dichromate, an orange-yellow crystalline powder, in bags that were stored on site. Soldiers and others testified that the material was loose and drifting around the site, and had contaminated areas even outside the chemical injection building where it was added to the water.

How contaminated was it? Accounts differ. Even one of the plaintiffs in this case said he didn’t notice any soil discoloration. One of the British soldiers whose testimony was prerecorded said it was everywhere. Another Oregon soldier said it settled heavily on the clothing of the soldiers, who unwittingly carried it back to their camps over the border in Kuwait.

Much of KBR’s defense in the first Oregon trial focused on just how unlikely it was that any soldier — who visited the plant at durations from one day to 21 days — could have been exposed to dangerously high levels of sodium dichromate. But one of the most gripping portions of the testimony was when Oregon veteran Larry Roberta described eating a chicken patty that had been coated with the orange crystals, which he said immediately burned in his esophagus, causing him to vomit.

Roberta now is confined to a wheelchair and takes oxygen from a tank in his backpack. He had a history of gastrointestinal issues, but attributes much of his poor health to his time at Qarmat Ali.

Harrison, KBR’s lawyer, said the company “believes in the judicial process and respects the efforts and time of the jurors,” but believes the process that brought the case to conclusion Friday shouldn’t have been allowed to come so far.

“KBR did safe and exceptional work in Iraq under difficult circumstances,” he said in a brief, prepared statement. “We believe the facts and law ultimately will provide vindication.”

Soldier-plaintiff Arnold said the message of the verdict is unmistakable. He said service members are being exploited “to this day.”

Now, he said, “the voice will be out. There will be a lot more scrutiny.”

The Ronco Riff

October 25, 2012

Voluntary Today, Involuntary Tomorrow

Another Successful Flush by Wackenhut G4S

Will the last Ronco Consulting Corporation Employee out please close the lid ?

Iraq convoy was sent out despite threat

Unarmored trucks carrying needed supplies were ambushed, leaving six drivers dead. Records illuminate the fateful decision.

“Can anyone explain to me why we put civilians in the middle of known ambush sites?”

“Maybe we should put body bags on the packing list for our drivers.”

T Christian Miller The LA Times  September 3, 2007

Senior managers for defense contractor KBR overruled calls to halt supply operations in Iraq in the spring of 2004, ordering unarmored trucks into an active combat zone where six civilian drivers died in an ambush, according to newly available documents.

Company e-mails and other internal communications reveal that before KBR dispatched the convoy, a chorus of security advisors predicted an increase in roadside bombings and attacks on Iraq’s highways. They recommended suspension of convoys.

“[I] think we will get people injured or killed tomorrow,” warned KBR regional security chief George Seagle, citing “tons of intel.” But in an e-mail sent a day before the convoy was dispatched, he also acknowledged: “Big politics and contract issues involved.”

KBR was under intense pressure from the military to deliver on its multibillion-dollar contract to transport food, fuel and other vital supplies to U.S. soldiers. At Baghdad’s airport, a shortage of jet fuel threatened to ground some units.

After consulting with military commanders, KBR’s top managers decided to keep the convoys rolling. “If the [Army] pushes, then we push, too,” wrote an aide to Craig Peterson, KBR’s top official in Iraq.

The decision prompted a raging internal debate that is detailed in private KBR documents, some under court seal, that were reviewed by The Times.

One KBR management official threatened to resign when superiors ordered truckers to continue driving. “I cannot consciously sit back and allow unarmed civilians to get picked apart,” wrote Keith Richard, chief of the trucking operation.

Six American truck drivers and two U.S. soldiers were killed when the convoy rumbled into a five-mile gauntlet of weapons fire on April 9, 2004, making an emergency delivery of jet fuel to the airport. One soldier and a seventh trucker remain missing.

Recriminations began the same day.

“Can anyone explain to me why we put civilians in the middle of known ambush sites?” demanded one security advisor in an e-mail. “Maybe we should put body bags on the packing list for our drivers.”

Please read the entire story here

Will the Exclusive Remedy continue to condone murder or will G4S/ArmorGroup finally be held responsible for the murders of Paul McGuigan and Darren Hoare?????

WARNINGS ABOUT KILLER OF SCOT WENT UNHEEDED  October 1, 2012

ArmorGroup put the gun in his hand knowing that he was troubled

CONTROVERSIAL security firm G4S ignored warnings not to employ an armed guard in Iraq who went on to murder two of his colleagues, it has been claimed.

Danny Fitzsimons was sentenced to at least 20 years in an Iraqi prison last year for killing Scot Paul McGuigan and Australian Darren Hoare in Baghdad in 2009.The parents of Paul McGuigan, 37, have now called for G4S ArmorGroup to face criminal charges for failing to heed the warnings and sending Fitzsimons to Iraq.Now a new BBC Scotland documentary has revealed that G4S was warned not to employ Fitzsimons, who was suffering from Post-Traumatic Stress Disorder, and had been fired by a previous security contractor for punching a client.It emerged that a whistleblower sent two e-mails to the London-based company, which operates as Armorgroup in Iraq, expressing concerns that Fitzsimons’ unstable behaviour made him unsuitable to be handling weapons in a war zone.

The first e-mail, revealed in tonight’s BBC Scotland Investigates: Britain’s Private War programme, reads: “I am alarmed that he will shortly be allowed to handle a weapon and be exposed to members of the public. I am speaking out because I feel that people should not be put at risk.”And in a second e-mail, sent as 32-year-old Fitzsimons was about to start work in Baghdad, the whistleblower adds:“Having made you aware of the issues regarding the violent criminal Danny Fitzsimons, it has been noted that you have not taken my advice and still choose to employ him in a position of trust.

“I have told you that he remains a threat and you have done nothing.”Paul McGuigan’s mother, Corinne Boyd-Russell, from Innerleithen, in Peebleshire, said: “Fitzsimons fired the bullets. But the gun was put in his hand by G4S ArmorGroup.“I want G4S to be charged with corporate manslaughter and be held accountable for what they did.”The parents of Fitzsimons were also shocked to hear about the existence of the e-mails.Mother Liz Fitzsimons, from Manchester, said: “The people who we feel are responsible, who we hold responsible for putting that gun in Danny’s hand, are without a shadow of a doubt G4S.”The news comes just months after the UK Government was forced to call in 1,200 troops to police the Olympic Games venues after G4S failed to provide enough staff.

The firm recently won a £20million contract to manage the electronic tagging of Scottish offenders.

A spokesman for G4S said: “Although there was evidence that Mr Fitzsimons falsified and apparently withheld material information during the recruitment process, his screening was not completed in line with the company’s procedures.

“Our screening processes should have been better implemented in this situation, but it is a matter of speculation what, if any, role this may have played in the incident.”

Burn, Baby !, Burn !

Remember when rioters in Watts, Calif., began shouting “Burn, Baby! BURN!” in the turmoil of 1965? I’m sure they didn’t have the following future in mind.

That would be the various lawsuits against KBR for operating burn pits in Iraq and Afghanistan. But we should all be paying attention to this and not just for the human toll it has taken on soldiers and contractors. It also says something disturbing about the ability of the federal government to exercise proper control over its private contractors.

by David Isenberg at Huffington Post  September 4, 2012

An article, “Military Burn Pits in Iraq and Afghanistan: Considerations and Obstacles for Emerging Litigation” by Kate Donovan Kurera, in the Fall 2010 issue of the Pace Environmental Law Review provides the necessary insight.

For those who haven’t been paying attention the last four years the background goes thusly:

Burn pits have been relied on heavily as a waste disposal method at military installations in Iraq and Afghanistan since the beginning of United States military presence in these countries in 2001 and 2003, respectively. Little attention was paid to the pits in Iraq and Afghanistan until Joshua Eller, a computer technician deployed in Iraq, filed suit in 2008 against KBR for negligently exposing thousands of soldiers, former KBR employees, and civilians to unsafe conditions due to “faulty waste disposal systems.” Eller and a group of more than two hundred plaintiffs returning from their tours of duty, attribute chronic illnesses, disease, and even death to exposure to thick black and green toxic burn pit smoke that descended into their living quarters and interfered with military operations.

The plaintiffs assert that they witnessed batteries, plastics, biohazard materials, solvents, asbestos, chemical and medical wastes, items doused with diesel fuel, and even human remains being dumped into open burn pits. Defense Department officials say this waste stream contained items now prohibited pursuant to revised guidelines. Plaintiffs contend that KBR breached these contracts by negligently operating burn pits.

As of August 2010 there were an estimated two hundred and fifty one burns pits operating in Afghanistan and twenty two in Iraq. The most attention has focused on the burn pit operating at Joint Base Balad in Iraq, which was suspected of burning two hundred and forty tons of waste a day at peak operation

While the health impact of the pits is what the media focuses on, Kurera sees even more important legal issues: She writes:  Please read the entire article here

Attention ALJ’s, Department of Labor, Defense Base Act Insurance Companies: It’s Official, The Iraq War was Dangerous for Everybody

Texas District Court Rules Iraq War Not Life Threatening

Eyesslinck VS Ronco Consulting:  Injustice Prevails

Many Civilian Contractors were sent to Post War Iraq in 2003 with little consideration for their safety even after it became clear that the Mission had not been Accomplished.  

Due to the Defense Base Acts Exclusive Remedy Contract Companies and those they take orders from never had to be concerned with Threat Mitigation, no cost to them when an employee is killed or injured.  Taxpayer picks up the tab, Contract Company puts another warm body in place.

When is our Government going to put it’s people before Profit

Lessons for Consideration from SIGIR Special Report #2

SIGIR identified two lessons for consideration.

1.  Reconstruction or stabilization operations conducted in combat zones present  potentially lethal threats to all participants, including military, contractors, U.S.  government civilians, third-country nationals, and host country citizens.        Planning for  such operations must anticipate this threat.

Reconstruction or stabilization operations are sometimes described as “soft,” “non-kinetic,” or “non-lethal” missions, but when they occur in a combat zone, these characterizations are a misnomer.   The human losses suffered in Iraq (and outlined in this report) underscore the point that when such operations are conducted in combat zones, they are dangerous for everyone involved, military and civilian, U.S. and non-U.S. alike.  Given the broad risks inherent in such operations, leaders and planners should consider threat mitigation when deciding to conduct reconstruction or stabilization operations missions in combat zones.

2.  Poor casualty data management during reconstruction or stabilization operations  obscures the actual human cost of such operations.       Reliably integrated databases must be developed and implemented prior to commencing future reconstruction or  stabilization operations.

One measure of the cost of reconstruction or stabilization operations is the number of casualties suffered.  Without accurate records, there cannot be a reasonably complete evaluation of the human cost of reconstruction or stabilization efforts.  U.S. agencies involved in such missions should develop systems that effectively track all casualty data related to stabilization or reconstruction operations.

Nine Years Ago Today, Still getting screwed over by CNA !

July 7, 2003

Nine years ago you get that phone call you hoped you’d never get

But hey they say, not to worry, the insurance company will take care of everything

Heart is breaking but not to worry

Everything, they say, will be OK

Good thing we’ve been paying for good medical insurance

No way of knowing that the “insurance” was Defense Base Act through CNA, a policy we had never heard of,  looked at, or signed for

Or that  Administrative Law Judge Paul C Johnson would deem his injuries to be alleged when denying him his rights under the DBA

One day we’ll look back at this and be so grateful for our blessings, for what we’ve overcome………

But one day never comes

What’s that in the way?

CNA 

CNA with the assistance of the Department of Labor District Office in Jacksonville

From failing to provide a medical evacuation and abandoning him to the military medical system to defaulting on the order to provide his medical care for nearly two years now after denying for six years.

CNA, their Claims Adjusters, their overly zealous legal representation, and the biased Department of Labor District Office have caused much more physical, mental, and financial  damage than there ever had to be. 

What should have been temporary disabilities have become permanent.

CNA has denied the looking back one day, the moving forward, the healing

If CNA had simply lived up to their responsibilities rather than playing paper games this family would have long moved on

And the US Taxpayers would not be paying ever more to the War Profiteers CNA and their “representation”

Documents showed that CNA reported the highest profits margins, taking in nearly 50 percent more in premiums than it paid out in benefits.

Consequences of Pursuit of Profit: All Protected by DBA’s Exclusive Remedy at the expense of the US taxpayer

That dispute led to the under-equipment and under-preparation of the security team on which the four Blackwater employees died.   Their deaths led the military to launch an invasion of Fallujah.

So here it is: A contract dispute led to a major development in a major war of the United States – and that is Paul’s point.

David Isenberg at PMC Observer

Reduced to its essentials every argument and debate about the use of private military and security contractors comes down to two words; outsourcing and privatization. The argument is simply whether they are good and bad.
Personally I think that, like most other things, the answer is maybe. Hey, if you want absolutes take up physics.

But lately, partly I suppose, in response to the predictable quadrennial Republican party blather about the glories of the free market – cue the inevitable segue into why America needs a purported businessman like Mitt Romney to “fix America” – my repressed academic side has been pondering the pitfalls of privatizing the battlefield.

Before going any further let me acknowledge the contribution and sacrifice of PMSC personnel. To paraphrase Winston Churchill, never has so much depended on such an unacknowledged few.

That said, let’s turn to one of the iconic contractor moments of the U.S.involvement in Iraq; the killing of four Blackwater contractors in Fallujah in 2004.

Last year law professor Arthur J. Jacobson of Yeshiva University publishedan article in the  Cardozo Law Review.   The occasion was a symposium in honor of Paul R. Verkuil, who is on the Cardozolaw school faculty. Verkuil is author of the 2007 book Outsourcing Sovereignty: How Privatization of Government Functions Threatens Democracy And What We Can Do About It.

In his article, Outsourcing Incompetence: An Essay in Honor of Paul Verkuil Jacobson provides some detail regarding that tragic day that is not appreciated by the public.  I realize the following quote is long but it is necessary to appreciate the true impact of what happened.

The four Blackwater employees who were dismembered and mutilated in Fallujah, where they ended up while guarding a convoy, is a grim reminder of how the military must react to contractor actions. The Marines had to secure that city after that gruesome event, which was not in their plans beforehand.

Paul’s conclusion about the Fallujah incident is ineluctable. The Department of Defense, it appears, outsourced to Blackwater a task that it regarded as amenable to outsourcing, rather than as an inherent government function. Were the Department of Defense to offer a justification of this decision, they would argue that providing security to a supply convoy is akin to an ordinary civilian security operation – like night watchmen at a construction site or armed guards accompanying an armored car – and is thus distinguishable from combat, which, as most today would probably agree, is
an inherent government function.  But the reality of a theater in combat does not permit so fine a distinction to be drawn.  The Blackwater employees had necessarily to engage in combat, and their defeat drew the Marines into a combat operation they had neither desired nor planned. Contracting with Blackwater to provide security for convoys thus wound up diverting the United States military from operations they had in fact planned, and calling into question the competence of a military that could so unwittingly be the cause of its own distraction.

Paul’s Blackwater story is bad enough. The real story is worse. I asked Erik Wilson, a captain in the United States Marine Corps and a first-year law student at Cardozo, to look into the Fallujah incident a little more closely. Here is what he found.

The U.S. Army did not hire Blackwater directly. The prime contract, part of the Logistics Civilian Augmentation Program (LOGCAP), was between the Army and Halliburton. It was a contract to supply Camp Ridgeway, an Army base near Fallujah.

Halliburton then subcontracted the supply contract to KBR, and KBR subcontracted it to ESS. It was ESS that hired Blackwater to provide security for the convoys to Camp Ridgeway. Four subcontracts connect, or separate, Blackwater from the ultimate recipient of its services. That looks like an awfully long chain of subcontracts. But things were not so simple.

Let’s start with the top of the chain. It was actually KBR’s predecessor, Brown & Root, and not Halliburton, that had the first LOGCAP contract with the Army. This was back in the 1990s, at the beginning of the LOGCAP program. In 2002, Halliburton created KBR (merging two of its subsidiaries, Brown & Root and M.W. Kellogg), and replaced the former Brown & Root as the prime contractor. Halliburton was thus the prime contractor at the beginning of the Iraq war in 2003. The LOGCAP contract Halliburton signed at that point, known as LOGCAP III, was the second renegotiation of the initial LOGCAP contract between the Army and Brown & Root. Halliburton’s role under LOGCAP III was only to guarantee KBR’s services, and the Army and other federal auditing agencies dealt directly with KBR, not with Halliburton. Halliburton was involved in LOGCAP III only because it owned KBR. Thus, after Halliburton divested itself of KBR in 2007, KBR once again became the prime contractor in the LOGCAP IV contract, which is just now coming into
effect.

Now let us consider the bottom of the chain. ESS did not hire Blackwater directly. It hired Blackwater through a proxy company, Regency Hotel and Hospital Company of Kuwait. What happened was this: Regency and Blackwater had submitted a joint proposal to replace ESS’s existing private security contractor, Control Risks Group. Once Regency/Blackwater won the contract, they renegotiated it to make Regency ESS’s subcontractor and, in turn, make
Blackwater Regency’s subcontractor. Apparently Blackwater wanted this arrangement so it could get exclusive credit for the successful security operations.

The presence of Regency in the chain is important because a dispute erupted between Blackwater and Regency about the armoring of the vehicles to be used in protecting the convoys. According to Captain Wilson, Blackwater used its
subcontractor status to “blackmail” Regency, saying that Regency now had to provide weapons, armor, and other supplies, and that Blackwater would not supply them. The apparent aim of this strategy was to get Regency either to pay for Blackwater’s supplies or default on their contract, which Blackwater would try to take over at an increased profit once Regency was no longer in the way. Captain Wilson believes that Blackwater probably could not have gotten the security contract on its own and that it teamed with Regency for credibility, then tried to cut Regency out.

Partially as a result of this dispute between Regency and Blackwater over equipment funding, the Blackwater team was extremely underequipped and underprepared for the March 31, 2004, mission in which four Blackwater employees died.

I want to pause here in telling the story to make a comment. Outsourcing government tasks to a firm in the private economy subjects those tasks to the push and pull of the economy. I do not have the illusion, and neither does Paul, that elements of the bureaucracy are without their own motivations and distortions, but when you sign up with the private economy, you agree to participate in the private economy’s motivations and distortions. Let’s be blunt. There was a dispute between Regency and Blackwater over who would pay to armor the security for the convoys. That dispute led to the under-equipment and under-preparation of the security team on which the four Blackwater employees died. Their deaths led the military to launch an invasion of Fallujah. So here it is: A contract dispute led to a major development in a major war of the United States – and that is Paul’s point.

Please go to David’s blog and read the entire post

Halliburton, KBR win appeal of Fisher vs Halliburton on Exclusive Remedy Clause of Defense Base Act

The Defense Base Act’s Exclusive Remedy “A License to Kill”

The Exclusive Remedy was intended to be trade off to keep injured contractors from having litigate with their employers when they are injured.  As it turns out the employers are off the hook and the injured contractors fight for years for medical care and lost wages from private insurance companies, AIG, CNA, ACE

AIG has fought the survivors and families of those killed like they were common criminals for the death, medical, and lost wages that were to be provided “forthwith”.

And don’t think something like couldn’t happen to you, your only one bomb or one sniper away.

Bloomberg  January 12, 2012

KBR Inc. (KBR) and its former corporate parent, Halliburton Co. (HAL), won’t face a jury on claims they sent unarmed civilian convoy drivers into an Iraqi battle zone in 2004, knowing the workers would be injured or killed, an appeals court ruled.

The U.S. Court of Appeals in New Orleans today ruled the drivers’ claims were blocked by the Defense Base Act, a U.S. law that shields military contractors from lawsuits. The drivers were attacked and injured because of their role in support operations for the U.S. Army, which is covered under that statute, the judges said.

“Coverage of an injury under the DBA precludes an employee from recovering from his employer,” even if the worker claims the company was “substantially certain” the injuries would occur, U.S. Circuit Judge Priscilla R. Owen said in a 30-page ruling by the panel.

KBR, a Houston-based government contractor, was sued in 2005 by the families of seven drivers killed while working inIraq for the largest U.S. military contractor. The company appealed a 2010 lower-court ruling that jurors could weigh the companies’ actions without second-guessing the actions of the Army.

Unarmed Civilians

U.S. District Judge Gray Miller, who presided over the case in Houston federal court, refused to dismiss Halliburton, which spun off KBR as a separate company in 2007. Miller had also ruled that the companies couldn’t name the military as a co-defendant in the lawsuits, so the Army wasn’t required to defend its actions.

The drivers and their families claimed KBR officials fraudulently recruited workers for safe jobs in Iraq and intentionally sent unarmed civilians into a recognized combat zone in April 2004. KBR’s military-supply contract gave company officials the right to refuse assignments deemed too dangerous for civilians, according to the complaints.

KBR and Halliburton argued that they weren’t liable because they couldn’t refuse Army orders to dispatch the fuel convoys under terms of their multibillion-dollar supply contract with the U.S. military. The convoys were attacked at a time when Iraqi insurgents were escalating the fight against U.S. troops that had taken over the country to oust dictator Saddam Hussein.

The case is Fisher v. Halliburton, 10-20202, U.S. Court of Appeals, Fifth Circuit (New Orleans).

IRS Targets US Expats

Updates to our ExPat Tax Page

For years companies like Blackwater and Ronco Consulting  have Misrepresented their employees as Consultants or Independent Contractors to the IRS to escape having to pay Social Security and Medicare payroll taxes.

Thank you Blackwater and Ronco Consulting

At the same time these same companies represented these same consultants and Independent Contractors to be employees for the purpose of purchasing the mandated Defense Base Act Worker’s Comp Insurance.  Even going so far as to have contractors sign new backdated employment contracts AFTER they were injured.

Fraudulent activity of this nature has garnered the full attention of the IRS to the Contract Employee much more so than it has the Contract Company.  Blackwater even continued to do this after the IRS busted them.

Bob Powers of Power Tax sends us this and asks that we warn all ExPats to be prepared.

Pursuant to an IRS internal memo Memorandum Number: AM2009-0003

This link IRS  has an important note regarding the definition of a foreign tax home (which is necessary to claim the Sec 911 benefit).

The IRS has been using this in somewhat of a distorted way to deny the FEIE to contractors working in Iraq and Afghanistan,, not only those who have families in the U.S., but also single people who left home, joined the military and then were hired as contractors.

If they did not plan in advance and take all the steps necessary to show that their abode was in a foreign country and not in the U.S. they are disallowing the exclusion.

Many have had inexperienced tax preparers or did their own tax return and the case dragged on so long that they lost their administrative appeals rights and facing a substantial tax bill plus penalties cannot afford a good tax attorney to take it to Tax Court.

As a result, the IRS is using their muscle to claim that these workers were living on a base and had no contact with the local community and therefore their “abode-which is not clearly defined anywhere) was in the U.S.

This is the quote from the IRS page:

Tax Home
Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home.
Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.

If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work.

You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States . However, your abode is not necessarily in the States while you are temporarily in the United States .

Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United
States , whether or not your spouse or dependents use the dwelling.

“Abode” has been variously defined as one’s home, habitation, residence, domicile, or place of dwelling. It does not mean your principal place of business. “Abode” has a domestic rather than a vocational meaning and does not mean the same as “tax home.”
The location of your abode often will depend on where you maintain your economic,
family, and personal ties.

Example 1.
You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. You return to your family residence in the United States during your off periods. You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. You cannot claim
either of the exclusions or the housing deduction.

Example 2.
For several years, you were a marketing executive with a producer of machine tools in Toledo , Ohio . In November of last year, your employer transferred you to London , England , for a minimum of 18 months to set up a sales operation for Europe . Before you left, you distributed business cards showing your business and home addresses in London .

You kept ownership of your home in Toledo but rented it to another family. You placed your car in storage. In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London .

Shortly after moving, you leased a car and you and your spouse got British driving licenses. Your entire family got library cards for the local public library. You and your spouse opened bank accounts with a London bank and secured consumer credit. You joined a local business league and both you and your spouse became active in the
neighborhood civic association and worked with a local charity.

Your abode is in London for the time you live there. You satisfy the tax home test in the foreign country.

Note that the IRS agents examining these returns are not seasoned international agents and their internal directive is to disallow the exclusion regardless of the taxpayer’s defenses and force it to go to Tax Court.

We recommend you check out Power Taxes pages before you deploy.

U.S. Expatriate Tax & Business Solutions

KBR Settles Lawsuit Brought by Driver Injured in Iraq Convoy

Bloomberg  January 10, 2012

KBR Inc. (KBR) settled a lawsuit brought by an injured convoy driver who claimed the company sent civilians into a battle zone in Iraq in 2004 knowing they would be attacked and possibly killed, according to a court filing.

Reginald Cecil Lane, the injured driver, reached a“confidential settlement” with KBR and its former parent,Halliburton Co. (HAL), his lawyer Tommy Fibich said in court papers yesterday. Lane and the defendants asked the court to dismiss the lawsuit, according to the filing.

KBR, a Houston-based government contractor, was also sued by the families of seven drivers who were killed in Iraq. The company is appealing a ruling by U.S. District Judge Gray Miller in Houston allowing the suits to go forward. The other claims haven’t been settled, Scott Allen, a lawyer for the families, said today in a phone interview.

Sharon Bolen, a KBR spokeswoman, and Fibich didn’t immediately return calls or e-mails seeking comment on the settlement.

The case is Lane v. Halliburton, 06-CV-01971, U.S. District Court, Southern District of Texas (Houston)

Families of dead Blackwater Contractors Settle Suit

Bill Sizemore The Virginian Pilot  January 6, 2012

Seven years after it was filed, what could have been a landmark lawsuit over battlefield accountability in an era of privatized warfare has been quietly laid to rest.

As a result, the security company formerly known as Blackwater has avoided a public examination of the bloody event that catapulted the company to worldwide attention and changed the course of the Iraq war.

The lawsuit was filed in January 2005 by the families of four Blackwater guards killed in a convoy ambush in Fallujah, Iraq, in March 2004. In what became an iconic image of the war, the four were shot and dismembered, and two of the bodies were strung from a bridge while a crowd of Iraqis cheered and chanted.

Televised images of the gruesome scene were flashed worldwide, prompting a devastating retaliatory assault on the city by U.S. forces that fanned the flames of the Iraqi insurgency.

The security company, now known as Academi, reached a confidential settlement with the families last week.

Two sources who insisted on anonymity said the company agreed to a total payout of $635,000 – a mere fraction of the legal fees in the long-running case, let alone the $30 million in claims and counterclaims at stake.

The settlement is in keeping with an aggressive makeover effort by Academi’s current owners, who bought the company from founder Erik Prince a year ago and are doing their best to distance themselves from allegations of lawless behavior at Blackwater, from the streets of Baghdad to the executive suite in Moyock, N.C.

Beyond any financial considerations, the Fallujah victims’ families never got what they always said they wanted most: an opportunity to hold the company publicly accountable for their loved ones’ deaths.

The four men – Wesley Batalona, Scott Helvenston, Michael Teague and Jerry Zovko – were traveling in two Mitsubishi SUVs, escorting a convoy of flatbed trucks to pick up kitchen equipment from a U.S. military base.

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Senators Press for Burn Pit Updates from the Military

TAMPA BAY ONLINE  May 18, 2011

Armed with a new study showing military personnel deployed to Afghanistan and Iraq are eight times more likely to suffer respiratory problems than those who are not, two senators are asking the Department of Defense to provide an immediate update on what is being done about the problem of burn pits, which have operated in both countries.

Armed with a new study showing military personnel deployed to Afghanistan and Iraq are eight times more likely to suffer respiratory problems than those who are not, two senators are asking the Department of Defense to provide an immediate update on what is being done about the problem of burn pits, which have operated in both countries.

Democrats Bill Nelson of Florida and Charles Schumer of New York got involved with the issue after the December death of retired Army Sgt. Bill McKenna, who was born in New York but lived in Spring Hill.

McKenna, 41, who served two tours of duty in Iraq, died at HPH Hospice, of Spring Hill, from cancer he contracted after constant exposure to the thick smoke that wafted almost every hour of every day across Balad Air Base in Iraq, where McKenna was stationed about 18 months.

In bases across Afghanistan, amputated body parts, Humvee parts, human waste, plastic meal trays and other garbage are incinerated using jet fuel in large trenches called burn pits. The military halted the practice in Iraq last year.

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Text of S. 669: Longshore and Harbor Workers’ Compensation Act Amendments of 2011

A bill re-introduced in the United States Senate and backed by maritime insurers and employers

would substantially reform existing Longshore and Harbor Workers’ Compensation Act procedures

and the benefits afforded injured and sick workers.

A Bill

To ammend the Longshore Harborworker’s Compensation Act to improve the compensation system and

for other purposes.

http://www.govtrack.us/congress/billtext.xpd?bill=s112-669

ArmorGroup’s Danny Fitzsimons faced charges for assault prior to being so negligently deployed

“If people start to recognise PTSD and do something about it, then at least some good has come out of this horrendous situation. Danny doesn’t deserve this. He has been let down by us, the Army and he has been let down by the ArmourGroup.”

Criminal Behavior and PTSD: An Analysis

A Middleton man jailed in Iraq for murdering two colleagues had been due to appear in court at home accused of assaulting an Asian man on a train.

Rochdale Online  April 26, 2011

But the family of security contractor Danny Fitzsimons said it is evidence that he is suffering form post-traumatic stress disorder (PTSD).

The 31-year-old was jailed for 20 years last month after shooting ArmorGroup colleagues Paul McGuigan and Darren Hoare in Baghdad in August, 2009.

His family said the ex–paratrooper, who served eight years in the forces, was tormented by his experiences in Kosovo and Iraq and should never have been given clearance to work for the security firm.

In April the same year, Fitzsimons was convicted of a public order offence after he fired a flare gun into the air to scare off teenagers causing trouble outside his flat in Middleton.

He was due to be sentenced at Bolton Crown Court and also appear on the assault charge.

Stepmother Liz Fitzsimons said: “There were youths climbing all over the roof of the flat he lived in. He went and tried to warn them off. He just got laughed at and a lot of abuse. That’s when he went back in the flat and got this flare gun.

“Any normal person not suffering from PTSD would have just phoned the police.”

She said of the assault on the train: “That wasn’t a racist attack. He felt threatened. There were three of them.”

Mrs Fitzsimons said the offences would not have happened if Danny had received support for his condition.

She said: “I feel very strongly that we have let him down because we did not know the severity of his illness. If we had known, we would have helped him so much. He is now in an Iraqi jail not getting treatment for PTSD. There is treatment available, but not in Iraq.”

She stressed the family’s sadness that two men had lost their lives but said: “If people start to recognise PTSD and do something about it, then at least some good has come out of this horrendous situation. Danny doesn’t deserve this. He has been let down by us, the Army and he has been let down by the ArmourGroup.”

PTSD and the Law

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