Iraq Embassy Builder Tied to Kickbacks
Thursday, September 20, 2007; 7:38 PM
WASHINGTON -- The Kuwaiti company building the U.S. embassy in Baghdad has been accused of agreeing to pay $200,000 in kickbacks in return for two unrelated Army contracts in Iraq.
The scheme, outlined in a now-sealed court document obtained by The Associated Press, allegedly involved First Kuwaiti General Trading & Contracting and a manager for Kellogg Brown & Root Inc. or KBR, a firm hired to handle logistics for the military in Iraq and Afghanistan.
The document summarizes grand jury testimony from the former KBR manager, Anthony J. Martin, who pleaded guilty in July to taking kickbacks in 2003.
Although the government has tried to keep First Kuwaiti's name out of public records related to Martin's case, details from his grand jury testimony were found by a defense lawyer, J. Scott Arthur of Orland Park, Ill., who included a summary in a six-page document filed last Friday in an unrelated federal court case in Rock Island, Ill. The AP downloaded a copy of the document from the court's Web site shortly before a judge ordered the document sealed and removed from the public record.
According to the court document, Martin testified to a federal grand jury that he engaged in the kickback scheme with Lebanese businessman Wadih Al Absi, who controls First Kuwaiti General Trading & Contracting. The company is building the $592 million Baghdad embassy, the largest in the world with working space for about 1,000 people.
In a statement, First Kuwaiti said Martin's allegations are "without merit."
Questions about the company come amid growing concerns about contractors in Iraq and Afghanistan, and claims that the State Department's inspector general has been reluctant to help investigations into alleged fraud.
First Kuwaiti has done other work for the government, including jobs for the Army Corps of Engineers and the U.S. Marine Corps, according to the company's Web site. The company already is under scrutiny by Congress for its labor practices, and a State Department e-mail disclosed this week says the Justice Department is investigating First Kuwaiti for alleged contract fraud on the embassy project.
The document filed by defense attorney Arthur of Orland Park, Ill., seeks more information from the government about the alleged conspiracy between Martin and First Kuwaiti. Arthur contends the government is improperly withholding evidence about Martin and his allegedly criminal relationship with the company through Al Absi.
In the court filing, Arthur says that while preparing for his client's upcoming trial, he discovered the allegations about First Kuwaiti and Al Absi agreeing to pay kickbacks to Martin. Arthur said federal prosecutors accidentally disclosed Al Absi's name in heavily edited grand jury transcripts. Arthur now is demanding that prosecutors turn over all information about the company and Al Absi.
"Tony Martin's plea agreement, together with the inadvertent identification of Wadih and First Kuwaiti as coconspirators in an ongoing scheme to defraud the United States government entitles the defendant to know the exact scope of said conspiracy," Arthur's court filing stated.
Martin said in court documents that he agreed to receive kickbacks before awarding a $4.6 million contract to First Kuwaiti to supply 50 semi-tractors and 50 refrigeration trailers for six months. A month later, Martin awarded First Kuwaiti an additional $8.8 million subcontract to supply 150 semi-tractors for six months.