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ALLEGATIONS OF WASTE, FRAUD AND ABUSE AT

THE NEW U.S. EMBASSY IN IRAQ

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY

AND FOREIGN AFFAIRS

AND THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

JULY 26, 2007

Serial No. 110–61

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

HENRY A. WAXMAN, California, Chairman

TOM LANTOS, California

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

JOHN A. YARMUTH, Kentucky

BRUCE L. BRALEY, Iowa

ELEANOR HOLMES NORTON, District of

Columbia

BETTY MCCOLLUM, Minnesota

JIM COOPER, Tennessee

CHRIS VAN HOLLEN, Maryland

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

JOHN P. SARBANES, Maryland

PETER WELCH, Vermont

TOM DAVIS, Virginia

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

VIRGINIA FOXX, North Carolina

BRIAN P. BILBRAY, California

BILL SALI, Idaho

JIM JORDAN, Ohio

PHIL SCHILIRO, Chief of Staff

PHIL BARNETT, Staff Director

EARLEY GREEN, Chief Clerk

DAVID MARIN, Minority Staff Director

SUBCOMMITTEE ON NATIONAL SECURITY AND FOREIGN AFFAIRS

JOHN F. TIERNEY, Massachusetts, Chairman

CAROLYN B. MALONEY, New York

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

JOHN M. MCHUGH, New York

TODD RUSSELL PLATTS, Pennsylvania

DAVE TURK, Staff Director

(III)

C O N T E N T S

Page

Hearing held on July 26, 2007 ............................................................................... 1

Statement of:

Demming, Karl, engineering and construction manager, KBR .................... 25

Owens, John, former employee, First Kuwaiti Trading and Contracting

Co.; and Rory Mayberry, former employee, First Kuwaiti Trading and

Contracting Co. ............................................................................................. 79

Mayberry, Rory .......................................................................................... 86

Owens, John .............................................................................................. 79

Williams, Major General, retired, Charles E., Director, Office of Overseas

Building Operations, U.S. Department of State; William Moser, Deputy

Assistant Secretary for Acquisitions, U.S. Department of State; Patrick

Kennedy, Director, Office of Management Policy, U.S. Department of

State; and Howard J. Krongard, Inspector General, U.S. Department

of State ........................................................................................................... 108

Kennedy, Patrick ....................................................................................... 118

Krongard, Howard J. ................................................................................. 121

Williams, Major General, retired, Charles E. ......................................... 108

Letters, statements, etc., submitted for the record by:

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland:

June 7th cable ........................................................................................... 56

KBR report dated May 25, 2007 .............................................................. 42

Davis, Hon. Tom, a Representative in Congress from the State of Virginia, prepared statement of ........................................................................ 15

Demming, Karl, engineering and construction manager, KBR, prepared

statement of ................................................................................................... 27

Kennedy, Patrick, Director, Office of Management Policy, U.S. Department of State, prepared statement of .......................................................... 119

Krongard, Howard J., Inspector General, U.S. Department of State, prepared statement of ........................................................................................ 123

Mayberry, Rory, former employee, First Kuwaiti Trading and Contracting

Co., prepared statement of ........................................................................... 88

Owens, John, former employee, First Kuwaiti Trading and Contracting

Co., prepared statement of ........................................................................... 81

Shays, Hon. Christopher, a Representative in Congress from the State

of Connecticut, prepared statement of ........................................................ 23

Tierney, Hon. John F., a Representative in Congress from the State

of Massachusetts, prepared statement of ................................................... 19

Waxman, Hon. Henry A., a Representative in Congress from the State

of California

May 25th cable .......................................................................................... 32

Prepared statement of ............................................................................... 5

Williams, Major General, retired, Charles E., Director, Office of Overseas

Building Operations, U.S. Department of State, prepared statement

of ..................................................................................................................... 111

(1)

ALLEGATIONS OF WASTE, FRAUD AND ABUSE

AT THE NEW U.S. EMBASSY IN IRAQ

THURSDAY, JULY 26, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIONAL SECURITY AND FOREIGN AFFAIRS, COMMITTEE

ON OVERSIGHT AND GOVERNMENT REFORM, JOINT WITH

THE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

Washington, DC.

The committee and subcommittee met, pursuant to notice, at

10:10 a.m., in room 2154, Rayburn House Office Building, Hon.

Henry A. Waxman (chairman of the Committee on Oversight and

Government Reform) presiding.

Present: Representatives Waxman, Davis of Virginia, Maloney,

Cummings, Kucinich, Tierney, Watson, Lynch, Braley, Norton,

McCollum, Sarbarnes, Shays, Platts, Cannon, Duncan, Issa, and

Westmoreland.

Staff present: Phil Schiliro, chief of staff; Phil Barnett, staff director and chief counsel; Karen Lightfoot, communications director

and senior policy advisor; David Rapallo, chief investigative counsel; Theo Chuang, deputy chief investigative counsel; Margaret

Daum, counsel; Christopher Davis, professional staff member;

Earley Green, chief clerk; Teresa Coufal, deputy clerk; Matt

Siegler, special assistant; Caren Auchman, press assistant;

Zhongrui J.R. Deng, chief information officer; Leneal Scott, information systems manager; Dave Turk, staff director, National Security and Foreign Affairs Subcommittee; Andrew Su and Andrew

Wright, professional staff members; Davis Hake, clerk; Steve Glickman, counsel; Kerry Gutknecht, staff assistant; David Marin, minority staff director; Larry Halloran, minority deputy staff director;

Keith Ausbrook, minority general counsel; Ellen Brown, minority

legislative director and senior policy counsel; John Brosnan, minority senior procurement counsel; A. Brooke Bennett and Emile

Monette, minority counsels; Nick Palarino, minority senior investigator and policy advisor; Patrick Lyden, minority parliamentarian

and member services coordinator; Brian McNicoll, minority communications director; and Benjamin Chance, minority clerk.

Chairman WAXMAN. The committee and subcommittee will

please come to order.

Today, the committee is holding a hearing on the State Department’s single largest construction project in the world, the $600

million U.S. Embassy in Baghdad. This is the first oversight hearing Congress has held on this immense project.

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We will hear today from the State Department witnesses that

the Embassy will be built on time and under budget. I hope they

are right.

Billions of taxpayer dollars have been squandered on contracts in

Iraq. There should be at least one major project that is done right.

But there are red flags involving the Embassy complex that

should not be ignored. On July 5, the Washington Post ran a front

page article that described ‘‘a cascade of building and safety blunders’’ in the facility being built to house the Embassy security

guards.

This facility was built by the same company, First Kuwaiti, that

is building the main Embassy. It was delivered to the Embassy

with the assurance that it ‘‘meets and exceeds’’ contract requirements. It passed the inspections required by the State Department

and it seemed like a success.

But when the kitchen equipment was turned on for the first time

in May, the appliances didn’t work. The electrical wiring melted,

creating a serious fire hazard. Embassy officials cabled Washington: ‘‘Poor quality construction . . . [l]ife safety issues . . . inherent construction deficiencies . . . left the post with no recourse but

to shut the camp down in spite of the blistering heat in Baghdad.’’

Over 2 months later, the base for the guards remains shuttered.

As we will learn today, there are other red flags. The oversight

and management of the Embassy project appears to be in disarray.

The State Department agency responsible for the day to day oversight of the project is the Office of Overseas Buildings Operations

[OBO], but the OBO appears to be in a raging battle with the State

Department officials in Baghdad who will ultimately live and work

in the new Embassy.

The conflicts are so severe that the senior OBO official who is

supposed to be on the ground in Iraq, monitoring the construction

of the new Embassy has been banished from the country.

It does not help matters that there are only three career State

Department officials onsite to oversee this massive project. Everyone else is a private contractor.

The project has also been beset by allegations that the prime contractor, First Kuwaiti, has used forced labor to build the Embassy,

violating the laws against human trafficking and sending exactly

the wrong message to Iraqis and the rest of the world about U.S.

respect for human rights.

This committee called this hearing to investigate these allegations. As the principal oversight committee in the House, that is

our job.

Unfortunately, the State Department has taken exactly the

wrong approach to our inquiry. The Department has gone into full

bunker mentality, stonewalling the committee’s document requests

and obstructing our efforts to conduct legitimate oversight of the

Embassy project.

The committee sent a letter on July 10th requesting documents

in preparation for today’s hearing. We asked for a list of eight discrete, clearly identified memos, reports and cables. We also asked

for a set of broader documents including communications, briefings

and meeting minutes. We informed the Department that we wantVerDate 11-MAY-2000 12:08 Aug 11, 2008 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\43507.TXT KATIE PsN: KATIE
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ed the eight documents we specifically identified before today’s

hearing. The rest could be produced afterwards.

In response, the committee was told almost daily that these documents were on the way. We were told: They are being gathered.

They are being reviewed. They are in the approval process. They

will be there tomorrow.

But aside from two incomplete cables, none of the documents

were provided. Finally, 2 weeks after we requested these eight documents, we issued a subpoena for the documents. The due date

was yesterday at 4 p.m. The Department produced none of the documents by the deadline.

Just this morning, the State Department faxed over a handful of

documents that were required under the subpoena. Some of these

documents raise even new questions.

In one e-mail exchange, the Senior Coordinator of the State Department Office to Monitor and Combat Trafficking in Persons

writes that he has ‘‘strong concerns about allegations of human

trafficking among state contractors in Iraq.’’

The State Department official in charge of overseeing the Embassy project instructs his staff, ‘‘Do not respond to these folks as

you can see no matter what you say you cannot win.’’

The fact that the Department is resisting congressional oversight

doesn’t mean that the project is failing, but it inspires no confidence in the Department’s assertions that everything is on track.

We have also received limited cooperation from the State Department’s prime contractor on this project, First Kuwaiti. We sent an

invitation to company officials to testify here today, but they refused. We asked to interview knowledgeable First Kuwaiti officials,

but they refused. We asked for a telephone call to ask questions,

but again they refused.

First Kuwaiti did make a substantial document production to the

committee and did provide a written statement, but from the

standpoint of the U.S. taxpayer, its refusal to testify is, to me, another red flag.

The State Department awarded First Kuwaiti a contract to build

the largest U.S. Embassy in the world. The company is being paid

a half a billion dollars in taxpayer funds, yet it is acting as if it

is unaccountable to Congress and the taxpayer.

There is one party in this process that did cooperate with the

committee, and that is KBR. KBR has provided the documents we

asked for, gave a briefing to committee staff and agreed to testify

here today, and they took these steps even though they knew that

I have been outspoken about my concerns about other KBR projects

in Iraq.

Despite the obstacles we faced, today’s hearing will raise important questions about the Embassy project. Witnesses will describe

evidence of substandard labor conditions and shoddy construction

work. Internal cables will reveal a Department at war with itself.

My goal is to use this hearing to begin to sort through the claims

and counterclaims that envelope the Embassy project. We won’t answer every question that has emerged about this secretive project,

but if we can shed more light on some, we will be doing our job.

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I hope the Embassy project opens on time and under budget, but

real questions about the project are being asked and these need to

be addressed.

This is an unusual hearing in that it is being held as a joint

hearing of the full committee and its National Security Subcommittee. The hearing is being held jointly in recognition of the extensive

work that the subcommittee has been doing for the past several

months to examine the allegations of human trafficking by First

Kuwaiti.

For this reason, after Ranking Member Davis is recognized for

his statement, Subcommittee Chairman Tierney and Subcommittee

Ranking Member Shays will be recognized for their opening statements, and then we will go directly to the witnesses.

[The prepared statement of Chairman Henry A. Waxman follows:]

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Chairman WAXMAN. Mr. Davis.

Mr. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

In my opinion, this could have been a good hearing. It could have

been a thoughtful examination of how the State Department’s

Overseas Building Operations Office constructs diplomatic facilities

under difficult conditions in some of the most inhospitable parts of

the world.

It could be a responsible assessment of incidental and systematic

problems encountered by an ambitious program to build more secure embassies, particularly the effort to complete the State’s largest single project ever in Baghdad, Iraq, in the middle of a war

zone. It could, but I am afraid it won’t.

Why? Because, as I think the chairman would acknowledge, this

hearing is a little bit premature.

Based on media reports alone, the committee scheduled today’s

testimony before completing a thorough investigation of thinly

sourced, sensationalized charges of shoddy construction and labor

abuses.

In what has become an unfortunate modus operandi, politically

charged allegations are marching miles ahead of the proven facts.

Whenever a news story jumps to a convenient conclusion to back

suspected administration malfeasance or misconduct, the committee rushes to see how they can elevate mere questions, concerns

and speculation before the real fact-finding.

As I have said before, it is oversight by firing squad. Ready. Fire.

Aim.

The most significant waste, fraud and abuses we are likely to uncover today may be our own. So what are we really aiming at

today?

The allegations of waste, fraud and abuse at the new U.S. Embassy in Iraq cited in today’s hearing title are based primarily on

an exchange of State Department cables detailing a dispute over an

entirely separate construction project, the security camp adjacent

to the Embassy, a completely separate contract. Both projects were

built by the same contractor, First Kuwaiti General Trading and

Contracting, but the camp was designed as a temporary collection

of prefabricated trailers and support structures while the 592 million Embassy compound involved full-scale construction of permanent buildings.

In the short time we have had to pursue claims of substandard

materials and practices, we found nothing to suggest the intramural spat over who is responsible for expanding and changing design elements at the temporary camp has any implications whatsoever on the quality of work at the permanent Embassy.

But here is a fact that does have an impact on the risk of waste,

fraud and abuse. Both projects were built under firm fixed-price

contracts, the kind the majority generally prefers. First Kuwaiti

got the work only after no U.S. contractor offered to meet the ambitious 24 month schedule while facing substantial financial and

logistical risks, building in a war zone on those terms. They wanted

a cost reimbursement arrangement.

Under the fixed price vehicle, disputes over electrical wiring

loads and dripping pipes can have little impact on ultimate costs.

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In effect, we are here litigating a punch list, the usual inventory

of fixes and finishing touches generated by any project this size.

Allegations about labor abuses and human trafficking violations

are far more serious, and it appears the State Department took

them seriously. We can be proud of U.S. labor protection but

shouldn’t be naive about the applications elsewhere in the world.

Nevertheless, complaints about working and living conditions

were referred to the State Department Inspector General who, in

conjunction with the IG for the Multi-National Forces in Iraq, conducted onsite inspection and interviews with foreign workers and

U.S. personnel. The State IG team found ‘‘nothing that caused us

to believe that trafficking in persons violations had occurred at the

site.’’

The military IG did find illegal and deceptive hiring practices by

recruiting agencies, but it found no evidence of the alleged abduction, abuse, overcrowding or unsanitary facilities. In fact, the MNFI IG concluded of the 58 living areas inspected, the State Department facility ‘‘rated in the top third with above average quality of

life conditions.’’

Against those findings, we have claims by disgruntled ex-employees who may have pending or potential financial interests against

the Government. Their accusations should be evaluated very carefully, something we have not had the opportunity to do. They may

sound atrocious. Someone saw passports in a safe or boarding

passes marked Dubai on a flight to Iraq.

But today we will get one side of the story. Only further inquiry

will tell us if the passports were stored voluntarily or whether anyone boarding a charter flight in Kuwait was confused about its destination.

Another reason not to take these allegations at face value is that

they have been thrown at an extraordinarily effective Federal agency. Under the leadership of General Charles Williams, the State’s

Bureau of Overseas Building Operations has completed 47—47—

new, secured diplomatic facilities in 6 years on schedule and all

within budget. He brings unimpeachable credentials to a difficult

job, coming out of retirement at the request of his friend, Colin

Powell.

After logging 2,000 flight hours in helicopters in Vietnam, General Williams finished a 29 year Army military career successfully,

completing major construction projects with the Corps of Engineers. He knows how to build. He has proven his dedication, his

skill and his integrity.

I question whether we will prove anything else here today. Nevertheless, I thank the witnesses for their time and perspectives.

[The prepared statement of Hon. Tom Davis follows:]

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Chairman WAXMAN. Thank you, Mr. Davis.

Mr. Tierney, the chairman of the subcommittee.

Mr. TIERNEY. Good morning and thank you, Mr. Chairman. I

want to thank you and Ranking Member Davis for allowing the

National Security and Foreign Affairs Subcommittee to jointly hold

this hearing.

There are many questions raised by the construction of this enormous 65 acre, 24 building walled fortress of an Embassy in Iraq.

What will it mean to Iraqis? Will most Iraqis react like one

quoted recently in the Los Angeles Times article, who said they are

not leaving Iraq for a long time, and he called the Embassy a symbol of oppression and injustice?

What purpose does an Embassy serve if nearly 1,000 of the State

Department officials are only rarely permitted to interact with

Iraqis outside the Green Zone, an essential part of their job, as

questioned by the American Foreign Service Association, the professional body representing State Department employees?

What does it mean that our military is planning on co-locating

at the Embassy site and how will this be interpreted?

Is this reminiscent of the even larger Somalia compound that

was dismantled by looters after the overthrow of the dictator,

Mohamed Siad Barre, and does it foretell the planned Lebanon

Embassy now said to be located in the heart of Hezbollah-controlled territory?

Is it bigger than it should be if you really expect Iraq to stabilize

and not as big as it needs to be for the nerve center of an ongoing

war effort, as the L.A. Times quotes a State Department advisor

and Council on Foreign Relations senior fellow as saying?

But the purpose of our hearing today is to look at the construction of the Embassy itself. Our new Iraq Embassy is not only our

most expensive Embassy to date. It is also supposed to become a

beacon of freedom and democracy in Iraq and throughout the Middle East.

Still, as Chairman Waxman has noted, very troubling allegations

have come to the subcommittee’s attention that this proposed beacon of freedom was built quite literally on the backs of workers

from Nepal, the Philippines, Pakistan, India and Ghana, just to

name a few nations.

We have heard allegations that some third country nationals

working for the prime contractor, First Kuwaiti, had to pay recruitment fees amounting to more than a full year of salary, fees as

high as $3,000 with salaries as low as $7 a day.

We have heard of workers, essentially waylaid to Iraq, being told

they were going to work in Dubai and given boarding passes to

Dubai but being transported instead to Iraq.

We have heard of verbal abuse, physical assaults and physical

intimidation, the First Kuwaiti managers brandishing weapons.

We have heard of workers living a dozen or two dozen or even

more in a single trailer measuring 40 feet by 10 feet. That would

essentially be the breadth of this two rows of seats and about the

width as well.

We have heard of inadequate medical care, of a lack of safety

training and equipment and about deaths not adequately explained.

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We have heard of workers unable to return home whether because their passports were withheld or because of threats or because they faced a year’s salary penalty if they resigned. I might

note that the withholding of passports by employers is an act forbidden by the U.S. Government.

Our first panel today consists of former workers from the Embassy site who will tell us what they themselves have heard and

seen. We take these allegations very seriously.

Unfortunately, however, it appears that not everyone may have

done so. We have learned during the course of our investigation

that a number of officials in our own State Department may have

looked the other way when confronted with these disturbing or inconvenient allegations.

Our State Department is supposed to be the face of U.S. diplomacy to the world. Unfortunately, when it appears that when it

came to the workers used to construct our flagship Embassy in

Iraq, some State Department officials may not have kept their eyes

wide open. For example, it has become clearer and clearer that little to no forethought on labor issues had been done during the contract award and in the vetting of First Kuwaiti.

It appears that State Department officials have largely taken a

hands-off approach with respect to First Kuwaiti’s relations with

its third country workers, and we have heard about the State Department’s own Office to Combat Human Trafficking pressing for

action from General Williams and from other top officials in the

Bureau of Overseas Building Operations and from the State Department Inspector General and receiving what can only be described as the cold shoulder.

We have a State Department Inspector General who reportedly

allowed First Kuwaiti itself to select the workers to be interviewed,

an Inspector General who apparently didn’t even interview those

alleging abuses and an Inspector General who didn’t use interpreters despite the fact that only 10 percent of the worker population was fluent in English.

I sincerely hope that what we hear today from our State Department witnesses dispels and explains those troubling stories our investigation has uncovered. I hope we hear that a strict adherence

to on time and on budget does not mean the trampling of workers’

rights and dignity.

It is important that all of us in the U.S. Government recognize

that our words and our actions matter. Our words and our actions

matter both because others in the world are watching us and listening to us but even more importantly because they reflect on who

we are and who we should constantly be striving to become.

Thank you again, Mr. Chairman.

[The prepared statement of Hon. John F. Tierney follows:]

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Chairman WAXMAN. Thank you, Mr. Tierney.

Mr. Shays.

Mr. SHAYS. Mr. Chairman, when it comes to U.S. citizens and

foreign nationals working in our embassies abroad, there is absolutely no question that their safety and security must be our top

priority, and we also have the significant responsibility to examine

alleged waste, abuse and fraud in Government. We need to look at

the State Department and its contractors in the construction of the

new $600 million U.S. Embassy in Baghdad.

I support today’s oversight efforts. Unfortunately, what we have

today is potentially a one-sided discussion about allegations found

in some recent articles and Internet blog entries. In terms of preparation and research, the minority staff have been rushed through

more than a half dozen interviews this week, many of which were

given with just 5 minutes notice of, and just last night the committee still had not received key documents from the Department of

State.

So although the facts are still muddled, this is what we do know.

A recent construction guard camp near to but separate from the

Baghdad Embassy is running on schedule. It appears there were

some electrical problems, but it is still not clear whether it was

these problems that resulted in a temporary delay in the occupation of the camp or other construction and installation deficiencies.

On the one hand, we hear from the Department of State the

project is currently on schedule and within budget. On the other

hand, we hear from contractors and whistleblowers that the construction is suffering massive problems with the fuel tank, sprinklers, air conditioning, heating and electrical system among other

things.

In reality, this is a complex, high-risk project in a war zone, so

certainly there will be some issues with the building system. But

we are still lacking hard evidence to make any assessments.

The other side of today’s hearing is allegations of potential

human trafficking and labor abuses. We cannot take lightly these

allegations of human trafficking and labor abuses. Human trafficking is modern day slavery and something that affects every nation

on every continent around the globe, including the United States,

and we must put an end to it wherever we find it.

In 2000, my fellow members and I drew a line when we passed

the Trafficking Victims Protection Act making human trafficking a

Federal crime. Between 2001 and 2006, the Department of Justice

has prosecuted over 360 defendants, secured 238 convictions and

guilty pleas, and had opened 639 new human trafficking investigations. That is how seriously the United States takes this issue.

So it makes sense when individuals, some of whom are here

today with us, raise concerns about possible labor abuses or inhumane conditions, the Trafficking in Persons Office in the Department of State and the Inspector Generals from the Multi-National

Force-Iraq quickly took action, observing the employees, interviewing workers and inspecting facilities on the site in Baghdad. In

fact, the State and MNF-Iraq Inspector Generals in their three reviews did not find anything to indicate human trafficking violations

had occurred.

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However, serious questions about possible illegal and deceptive

hiring practices by recruiting agencies are still being pursued, and

it is reported the Department of Justice has recently opened their

own human trafficking investigation to pursue these allegations.

I commend each of these agencies for taking this matter seriously and continuing with their investigation.

I look forward to today’s hearing but wish we had more information and had spent more time preparing this investigation before

commencing this hearing. Nevertheless, I do appreciate the opportunity to participate in today’s hearing and thank each of the witnesses for providing their testimony for the record.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Christopher Shays follows:]

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Chairman WAXMAN. Thank you very much, Mr. Shays.

I want to now call forward our first witnesses, Mr. Karl

Demming. He is the engineering and construction manager of KBR.

Mr. Demming, we are pleased to have you with us today to testify and to give us your analysis of what has been happening.

It is the policy of this committee that all witnesses that testify

take an oath, so I would like to ask you, if you would, to please

stand and raise your right hand.

[Witness sworn.]

Chairman WAXMAN. The record will indicate that you did answer

in the affirmative.

Mr. Demming, your prepared statement is going to be in the

record in its entirety. What I would like to ask you to do is to give

your testimony.

We do try to keep the oral testimony to around 5 minutes. I am

going to have a clock. It will be green, but then it will turn orange

when it indicates you have 1 minute left and then red when the

time is up.

If you feel you need to go over to summarize it, fine, but we do

want all witnesses to try to keep within the timeframe, so we can

hear from everybody.

We are happy to have you here.

There is a button on the base of the mic. Be sure it is pushed

in, so it is activated. When you have done that, I want to recognize

you to proceed.

STATEMENT OF KARL DEMMING, ENGINEERING AND

CONSTRUCTION MANAGER, KBR

Mr. DEMMING. Thank you, Mr. Chairman.

My name is Karl Demming. I am currently employed as a technical professional leader, Specialties for KBR in Baghdad in support of USMI, the U.S. Mission in Iraq.

Under the LOGCAP contract, I oversee KBR’s engineering and

construction work in Iraq. I arrived in-country soon after the invasion in 2003. I have been on the ground there ever since.

I am a participating electrician, practicing, and have been a

member of the International Brotherhood of Electrical Workers for

more than 30 years.

You asked KBR to assist the committee in its inquiry regarding

the Baghdad Embassy security force guard camp, and I am here to

do so. The guard camp and the new Embassy are being constructed

by another contractor. KBR did not design or construct either one.

Once the guard camp is complete, KBR will provide support services to the personnel who will be housed there.

I am a native Californian. I grew up in Burbank, went to Burbank High and later the Los Angeles Trade Technical School. I

joined the U.S. Army in 1971 and returned to Burbank after my

tour of duty.

I began work in the electrical field in 1975 and in the course of

my career have had the opportunity to work in many aspects of

this field, for example, power generation for the Federal Aviation

Administration and the Marine Corps and electrical systems and

construction positions for International Controls, Carnation, Lockheed, and Anheuser Busch.

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I have held State of California electrical and HVAC, heating-ventilation-air conditioning, contractors licenses and an L.A. city supervisor’s license. I also owned and operated my own electrical

firm. I worked on a wide variety of projects where the IBEW supplied the work teams.

I was a member of the National Guard from 1975 through 1997,

and I volunteered for the Gulf war and served in Saudi Arabia,

Iraq and Kuwait as a staff sergeant with the Guard.

I moved to Denver soon after leaving active duty and worked on

multiple construction projects at Denver International Airport. At

night, I also taught the IBEW’s electrical apprenticeship program.

I began working for KBR in May 2003. After an initial assignment in Basra, I began working in Baghdad on several power generation projects related to the U.S. Embassy Annex. In November

2006, I was promoted to my current position.

Under the LOGCAP contract, KBR provides a variety of support

functions to the United States and Coalition personnel in Iraq and

Afghanistan. As part of that work, every day KBR provides meals,

laundry and other support services throughout theater. Specific to

today’s discussion, KBR was asked to prepare to provide similar

services at the Baghdad Embassy security force camp.

As I mentioned before, KBR did not design or construct either

the guard camp or the new Embassy compound, but as the company prepared to support personnel at the guard camp, KBR participated in several site visits and was asked to conduct a technical

inspection of the facilities. This is not unlike having an inspection

done before buying a house.

My team and I carried out these inspections, and earlier this

week, at the committee’s request, I briefed the committee’s bipartisan staff on our findings. I am here today to answer any questions

you may have.

[The prepared statement of Mr. Demming follows:]

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Chairman WAXMAN. Thank you very much for your testimony. I

have questions, and I know other Members will as well. We are

going to proceed recognize Members 5 minutes at a time.

The Iraq Embassy is the largest construction project at the State Department. It has a price tag of $600 million, and its successful

completion is an essential part of the administration’s strategy for

Iraq.

The first part of this mammoth project to be completed was a

base for the security guards. It was delivered to the Embassy this

spring by the prime contractor, First Kuwaiti, with the assurance

that it meets and exceeds contract requirements.

My understanding is that KBR was hired by the State Department to run the guard base and prepare meals for the guards. As

a result, KBR entered the facility after it was turned over to the

Embassy to see how the equipment was operating.

Mr. Demming, I want to ask you about the problems KBR found

in the construction of the guard base when you tested the facility.

I understand you were part of a KBR team that was involved

with the process of starting up the dining facility in the guard

camp after First Kuwaiti finished assembling it, is that right?

Mr. DEMMING. That is correct, Mr. Chairman.

Chairman WAXMAN. On May 25th, the Embassy sent a cable

back to Washington to the Overseas Business Operations Office or

OBO that described some of the problems you encountered with the

process. I would like to make this cable part of the record today

and without objection that will be the order.

[The information referred to follows:]

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Chairman WAXMAN. Paragraph three of the Embassy cable says

that on May 14th, KBR was in the process of initiating the dining

facility when the wires began to melt, is that right?

Mr. DEMMING. That is correct, Mr. Chairman.

Chairman WAXMAN. Paragraph four of the cable states that some

of the appliances were not working properly and there was a burning smell. It also says that the staff received electrical shocks. In

your opinion, was this a serious safety issue and why?

Mr. DEMMING. Yes, Mr. Chairman, it was a serious safety issue.

I will explain why as layman as I possibly can.

The grounding issues and the personnel injury as far as coming

in contact with any of the metal equipment such as commercial

type cooking equipment and such in the facility as well as the type

of facility it is. They are trailers or modular units, and they are

steel or metal of construction.

Chairman WAXMAN. At that point, the cable says you had shut

off all the equipment and could not serve any meals.

Paragraph seven of the Embassy cable states the initial assessment by the KBR electricians was that the gauge of the electrical

wiring is too small for the electrical load required and that most

if not all of the wiring will need to be replaced.

It then says a followup inspection by KBR identified additional

electrical issues that required corrective action.

Can you tell us more about the problems you found?

Mr. DEMMING. Yes, sir, Mr. Chairman. In regards to the electrical cable, the equipment that this cable was feeding, we call

them circuits and they are protected by over-current devices. The

system does not work properly if it is not designed properly.

We did not have the design drawings or plans at that time. So

we were merely there to assist in starting this facility up, so we

can serve the first meal on May 15th.

During that time, these issues arose and we did have personnel

that were getting shocked or electrocuted mildly at the facility. We

did shut the power off to investigate and assist the contractor,

Overseas Building Office, to find these issues and try to remedy

them.

Chairman WAXMAN. Well, the cable mentions problems with the

grounding, electrical feeds, split wiring, wiring not contained in

junction boxes.

Paragraph 11 of the Embassy cable states that on May 24th, 10

days after the meltdown, OBO said the wiring had been corrected.

You came back on May 25th, the next day, but you still found continuing concerns with the wiring, according to the cable.

How can it be that OBO thought it had fixed the problems when

it really hadn’t?

Mr. DEMMING. Mr. Chairman, we don’t monitor what those, that

entity does out there on that camp. We are directed by our client—

at that time it would be the U.S. Army—to perform these tasks

and only upon direction do we actually act.

Chairman WAXMAN. Well, the wiring failed once. First Kuwaiti

fixed it, and OBO checked it, but there were still problems if what

you are telling us is right, something appears to be seriously wrong

with the management and oversight of this project. This doesn’t

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mean that the rest of the Embassy project will be plagued by similar problems, but it obviously raises a major red flag.

The State Department said the guard base was fine, that it met

and exceeded requirements. It turned out to be a fiasco. The $600

million question is whether we are going to discover the same

kinds of problems when the Embassy is turned over to the State

Department this fall.

I want to recognize Mr. Shays for 5 minutes as well.

Mr. SHAYS. Mr. Demming, first, you deserve a tremendous

thanks for serving your country by serving overseas in Iraq for so

long in your capacity with KBR, and I thank you for that.

Mr. DEMMING. Thank you, Congressman.

Mr. SHAYS. What I want to do is just be clear. We are not talking

about the $600 million Embassy. We are talking about a temporary

camp designed to house workers who would work on the $600 million Embassy, is that correct?

Mr. DEMMING. To my understanding, Mr. Congressman, that

BESF was the Baghdad security force camp.

Mr. SHAYS. Is the answer yes?

Mr. DEMMING. This would be for the security force.

Mr. SHAYS. What you are talking about now is a facility that is

temporary, designed to hold the security forces or the workers or

whatever, correct?

Mr. DEMMING. Correct.

Mr. SHAYS. OK. We are not talking about a permanent Embassy

problem, correct?

Mr. DEMMING. This does attach to the big Embassy campus

itself.

Mr. SHAYS. I am not trying to suggest that we should have problems in a temporary facility, but I want us to make sure we are

not mixing the two right yet.

Now it is my understanding that the OBO, the Overseas Building Operations, is a State Department agency that had basically

written out the specs for this temporary facility and that when

KBR got there, they felt that the facility was not adequate, is that

not true?

Mr. DEMMING. That would take some explanation, Mr. Congressman.

Mr. SHAYS. Well, first off, isn’t it true that this was a facility

that was built according to the specs of the State Department and

when KBR got there, they said this isn’t going to be able to handle

all that we need? Isn’t that true?

Mr. DEMMING. Can I explain to that?

Mr. SHAYS. Well, first off, tell me if it is true or not and then

explain.

Mr. DEMMING. That is true.

Mr. SHAYS. OK, now explain.

Mr. DEMMING. OK. What the issues were when KBR was asked

to perform operation and maintenance logistic services at the guard

camp itself, we have certain equipment and support mechanics that

require trucks, fire trucks, fuel trucks and etc. At that time, we did

not have a lot of information.

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Mr. SHAYS. I need a shorter version. The bottom line is are you

trying to say they should have known that it was not going to be

adequate?

Mr. DEMMING. No, sir. We could not get our equipment in there

to perform that O&M. That was our pushback.

Mr. SHAYS. Are you a witness today to have evidence about the

Embassy itself and that the Embassy itself has major construction

problems?

Mr. DEMMING. No, Mr. Congressman.

Mr. SHAYS. Your thrust today is just to say there may be indication of some problems with the full Embassy because there are

problems with this temporary site or are you just here because you

were requested to be? What is your motivation for being here?

Mr. DEMMING. I was requested to be here or asked to be here,

Mr. Congressman, to explain the difficulties and issues at the security force camp.

Mr. SHAYS. Temporary site, OK.

In your work in the United States, is this sometimes what is

built sometimes doesn’t meet the need of the person, of the client?

Is this unusual?

Is this event unusual, what you are encountering, what you encountered in Iraq?

Mr. DEMMING. Comparing to Iraq, it is a very volatile environment. Unusual, I would say no, sir.

Mr. SHAYS. Thank you very much, sir.

Mr. DAVIS OF VIRGINIA. Do you have a second?

Mr. SHAYS. Yes, I would be happy to yield to my colleague.

Mr. DAVIS OF VIRGINIA. Is the problem here with the specs or is

the problem with the construction?

Mr. DEMMING. Mr. Congressman, KBR was never privy to the

specifications that this entity was built by. We were going by the

Unites States national electrical codes and some of the national

building codes, the UBC and the UMC.

Mr. DAVIS OF VIRGINIA. So you don’t have any information that

the construction didn’t meet the specs and there might have been

a problem with the specs.

Mr. DEMMING. That is correct.

Mr. DAVIS OF VIRGINIA. You don’t have any information that

there is anything wrong in the construction at the Embassy at all,

do you?

Mr. DEMMING. That is correct.

Mr. DAVIS OF VIRGINIA. Thank you.

Chairman WAXMAN. Mr. Cummings.

Mr. CUMMINGS. Thank you very much. I want to thank you, Mr.

Demming, for being with us today.

Did I understand you correctly when you said that you are an

electrician?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. CUMMINGS. How long have you been that?

Mr. DEMMING. Over 30 years, Mr. Congressman.

Mr. CUMMINGS. Now, Mr. Demming, I understand that after the

wires melted at the guard camp, is that true? They melted?

Mr. DEMMING. Yes, sir, Mr. Congressman.

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Mr. CUMMINGS. Let me see if we can connect some dots here.

After they melted, the Embassy asked KBR to conduct a technical

inspection of the entire guard camp electrical system, is that correct?

Mr. DEMMING. Yes, sir.

Mr. CUMMINGS. Were you a part of that in any way?

Mr. DEMMING. Yes, I was, Mr. Congressman.

Mr. CUMMINGS. Mr. Chairman, I have a copy of KBR’s report

dated May 25, 2007, which I ask to be made a part of the hearing

record.

[The information referred to follows:]

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Mr. CUMMINGS. Mr. Demming, this report says that it is from

Paul Chretien. Do you know him?

Mr. DEMMING. Say that again.

Mr. CUMMINGS. I probably pronounced his name wrong. Paul CH-R-E-T-I-E-N.

Mr. DEMMING. Chretien.

Mr. CUMMINGS. Yes. Who is he?

Mr. DEMMING. He is my electrical engineer. He works on my

staff.

Mr. CUMMINGS. All right, so he works, he is under you?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. CUMMINGS. All right. On page 1 of this report, it lists ‘‘areas

of concern’’ and it says this: ‘‘One of the greatest areas of concern

is the use of counterfeit wire,’’ which refers to a wire found which

has a particular wire size printed on the insulation but actually

has smaller, lower capacity conductors, is that right?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. CUMMINGS. Did you actually obtain samples of the counterfeit wire?

Mr. DEMMING. Yes, that is correct, Mr. Congressman.

Mr. CUMMINGS. Now that word, counterfeit, that is a pretty

strong word, isn’t it?

Mr. DEMMING. Yes, it is.

Mr. CUMMINGS. In other words, it implies that somebody did

something wrong, is that right? In other words, that is not proper,

is that right?

Mr. DEMMING. That is correct.

Mr. CUMMINGS. How did you determine what the size of the wire

in the insulation was?

Mr. DEMMING. When the team was inspecting on that technical

inspection through the panels to further meet the needs of the direction that we received, they identified that first by looking at the

cable that was installed. Further investigation, we found that the

cable was marked, and on that cable marking it was marked for

the required cable size.

As further investigation went, the copper diameter size of the

conductors inside the multi-conductor cable was thought to be

smaller than what the stamped rating was on the jacket.

Mr. CUMMINGS. So, in other words, even if the specifications had

asked for a certain thing, when you went to look at the wire, even

if the specifications asked for it, the proper wire was not there, is

that correct?

Mr. DEMMING. That is correct.

Mr. CUMMINGS. I believe we have a picture of the counterfeit

wires you found. Can we please display that on the screen?

Where did you find this wire in the camp?

Mr. DEMMING. This cable was at, this particular cable was going

to the fryers from a panel inside the DFAC, the dining facility.

Mr. CUMMINGS. What problems might result from the use of such

a counterfeit wire?

Mr. DEMMING. Well, they might melt.

Mr. CUMMINGS. As they did.

Mr. DEMMING. Correct.

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Mr. CUMMINGS. After you did your report to the Embassy, the

Embassy wrote this cable to OBO, and here is what they said:

‘‘Several additional issues have arisen including discovery of counterfeit wire.’’

So they reported what you found to Washington.

Now I want to show you what Washington said in response. This

was written on June 7th, and I ask that it be entered into the

record.

[The information referred to follows:]

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Mr. CUMMINGS. The cable said this: ‘‘We have also asked KBR

and Post to identify any counterfeit wire and its location and they

have not been able to do so.’’

Mr. Demming, first of all, did you understand what I just said?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. CUMMINGS. I am asking you, Mr. Demming. Did anyone at

OBO ever ask you about the counterfeit wire you found?

Mr. DEMMING. No, Mr. Congressman.

Mr. CUMMINGS. Did anyone at OBO ask anyone on your team

about it to your knowledge?

Mr. DEMMING. Mr. Congressman, to my knowledge, no.

Mr. CUMMINGS. Do you know why OBO would claim in this cable

that they asked you for this when they didn’t? Do you know?

Mr. DEMMING. No, I do not know that.

Mr. CUMMINGS. One of the documents that the committee subpoenaed is a fire safety inspection report of the Embassy complex

itself. We understand that this inspection report documents a number of serious safety risks similar to those that KBR found at the

guard base, but the State Department won’t turn this document

over to the committee.

That is not a good sign. Covering up serious safety problems at

the Embassy does not make them go away.

Again, this word, counterfeit, is very significant, is it not?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. CUMMINGS. Thank you very much.

Chairman WAXMAN. Thank you, Mr. Cummings.

Mr. Davis.

Mr. DAVIS OF VIRGINIA. You showed the cable, this counterfeit

cable, whatever, to the Embassy Post, is that right?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. There is an inherent conflict sometimes

between the Embassy Post and OBO in terms of what the specs

should be. Everybody, they always are asking to try to get greater

capacity, better walls, better flooring. In my experience, that has

been true. They always want a little more and the State Department, to put these things on time and under budget, has certain

specs.

Do you have any evidence that this wire did not meet the specs?

Mr. DEMMING. No, Mr. Congressman. I never saw the specs.

Mr. DAVIS OF VIRGINIA. I think that is the nub of the matter. I

think what we have here is that if you looked at American standards in a permanent facility, you would have looked for a different

kind of wiring that would have supported what you were trying to

put in.

This was a temporary facility. The specs that were written were

one thing, and maybe they should have been something else.

I am not an expert in this area, but what I am looking for is evidence that the construction here was, in fact, counterfeit which

would mean they represented it would be one thing and it was

something else versus what the specifications called for since this

was a temporary facility.

I don’t know what the specs called for and we can ask this in our

next panel.

You don’t know what the specs called for, do you?

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Mr. DEMMING. No, Mr. Congressman, I do not.

Mr. DAVIS OF VIRGINIA. Thank you.

I mean I think that is the point we are trying to get at is they

have made a leap over here without looking at the underlying specifications in the contract. This was a temporary facility. They had

a budget.

Do you have any evidence that this would not have met, well, let

me just ask this.

What capacity did the customer require for its dining facility? Do

you know how many people they were trying to feed there?

Mr. DEMMING. There was 1,200 personnel that were to live on

that guard camp, and they served three meals a day.

Mr. DAVIS OF VIRGINIA. What organization is KBR’s customer for

the O&M contract to operate the guard camp?

Mr. DEMMING. Can you repeat that, Mr. Congressman?

Mr. DAVIS OF VIRGINIA. What organization is your customer on

the O&M contract to operate the guard camp? Who are you working for?

Mr. DEMMING. The U.S. Army.

Mr. DAVIS OF VIRGINIA. So your contract was with the U.S.

Army, and this was a State Department facility.

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. Now what capacity does that customer

require for its dining facility?

Mr. DEMMING. Capacity as in personnel?

Mr. DAVIS OF VIRGINIA. Yes.

Mr. DEMMING. There is 1,200 personnel.

Mr. DAVIS OF VIRGINIA. Is that capacity different from the capacity the dining facility was built to support?

Mr. DEMMING. I do not believe so, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. Some have said that the reason for the

problems with the wiring in the dining facility was caused by KBR

installing more equipment than the facility was designed to accept.

Now what is your view on that?

Mr. DEMMING. That is not true.

Mr. DAVIS OF VIRGINIA. But you haven’t seen the specs.

Mr. DEMMING. I have not seen the specifications, Mr. Congressman, but most of the kitchen equipment, commercial type kitchen

equipment, was already installed not by KBR.

Mr. DAVIS OF VIRGINIA. Right. Now OBO says they repaired the

damage soon after and that the wiring issue was resolved, is that

correct?

Mr. DEMMING. Those were the readily identified issues on May

14th that they resolved.

Mr. DAVIS OF VIRGINIA. Did they resolve those issues?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. Pretty quickly?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. Is the dining facility that you inspected

capable of handling the capacity required by your customer?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. What improvements need to be made to

the dining facility in order to meet your customer’s capacity requirements or are they already done?

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Mr. DEMMING. In our contract and according to preventive MED

issues and some of the Army regulations, we are required certain

things to happen as far as how hot the water must be, how much

water we must have to properly sanitize and wash the dishes. The

food storage, we are required in some instances to maintain several

days of storage because of the environment that we are in.

Situations like that, Mr. Congressman, are required that we

brought to the attention that facility did not meet.

Mr. DAVIS OF VIRGINIA. Did you have concerns about your contractual liability for the dining facilities during the contract for the

camp?

Mr. DEMMING. Just when we were asked to do the O&M services

is when we brought up those concerns.

Mr. DAVIS OF VIRGINIA. Do you know if KBR submitted an offer

to build the Embassy compound?

Mr. DEMMING. No, I do not know that, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. But once again just to clarify, you have

no knowledge or no relationship between what was done at the

Embassy itself versus this separate contract for the dining facility,

is that correct, temporary facility?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. OK. Thank you very much.

Mr. TIERNEY [presiding]. Thank you.

Ms. Watson, you are recognized for 5 minutes.

Ms. WATSON. Thank you so much and thank you, Mr. Demming,

for being here.

In the OBO’s cable responding to the Embassy’s concerns, they

essentially blame you at KBR for all of these problems, and I would

like to have you respond to some of the statements.

The basic argument seems to be that after the camp was turned

over, KBR came in and added a lot of extra equipment that was

never intended to be there. So let me read you what the OBO’s

cable actually says, and it is in paragraph three.

It says this was a problem created solely by Post and KBR by

putting additional equipment in the facility and not checking the

electrical loads.

The cable also says all such equipment appeared to be larger,

higher power requirement than the manufacturer had intended

based on our original specifications. This is the real reason for the

facility overheating.

So what is your response to that claim?

Mr. DEMMING. Ms. Congresswoman, we did not provide any extra

equipment to the kitchen facility other than the 20 foot by 8 foot

container for a chiller or cooler unit which was placed outside the

dining facility and wired to a separate circuit system as well as 20

by 8 foot container utilized as a freezer container. Those two items

were brought over from the previous camp where the guards are

living now, Camp Jackson, in order to store food there in preparation to move the guards over to the new camp and provide DFAC

services by May 15th.

Ms. WATSON. Can you stipulate to that, the equipment that you

brought in and the reason?

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Mr. DEMMING. Yes, ma’am. The equipment that we brought in

was specifically for the additional food that was required and to

start the DFAC services on May 15th.

Ms. WATSON. Is there a work order that would state that in writing? Was there a work order?

Mr. DEMMING. There was some. There would had to have been

a work order for us to do that, Ms. Congresswoman, and on the email traffic, I have just been handed, from First Kuwaiti, on one

of their preparations for a billing statement, they do include adding

an existing chiller to be moved from the triple canopy camp and

add existing freezer to be moved from the triple canopy camp. They

were aware that these two items needed to be brought over and in

working condition in order to meet the May 15th inaugural meal.

Ms. WATSON. Did you also check the electrical loads?

Mr. DEMMING. We were asked to do the technical inspection after

we received the administrative contracting letter to do the O&M on

the camp, and upon that inspection is when we started to find

some of the issues on the loads. However, it was not until the actual startup of the facility is when the events appeared.

Ms. WATSON. Did you document that inspection? Can we find it

somewhere in writing what you found?

Mr. DEMMING. Yes, ma’am. Yes, ma’am.

Ms. WATSON. Now here is another statement that was in the

cable. I am just repeating what the cable said. ‘‘KBR confirmed and

agreed specifically that they could manage and operate the facility

based on the design.’’

Is that true?

Mr. DEMMING. I am sorry, Ms. Congresswoman. Can you say that

again?

Ms. WATSON. I will repeat it, yes.

‘‘KBR’’—you—‘‘confirmed and agreed specifically that they could

manage and operate the facility based on the design.’’

Did you know what the design was?

Mr. DEMMING. No, Ms. Congresswoman. I really can’t answer

that. That might have been something from upper management,

but to my knowledge we did not accept that based on design.

Ms. WATSON. So there was no confirmation.

Mr. DEMMING. That is correct.

Ms. WATSON. From you, OK.

Mr. DEMMING. From me.

Ms. WATSON. Now here is another statement. ‘‘KBR created the

problems and are now trying to put this matter on the construction

of the camp.’’

This says that KBR created the problems. What is your response

to that?

Mr. DEMMING. That is not true, Ms. Congresswoman.

Ms. WATSON. And you stipulate to that? You are under oath.

Mr. DEMMING. Yes, ma’am.

Ms. WATSON. The cable not only blames KBR for the problems

but also suggests a motive, and this is what was said in the cable.

Mr. TIERNEY. Just finish up if you would, please. Thank you.

Ms. WATSON. OK, I will go real quickly.

‘‘These items do not represent any health or safety risk as outlined in the 25 May cable and will not stop Post from occupying

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the camp if they desire. For whatever reason, it appears Post and

KBR simply do not want to operate the camp for other reasons

which have nothing to do with the construction or equipment installed as part of the original scope.’’

Do you have any idea what is being said and does KBR have

other reasons for not wanting to operate this camp?

Mr. DEMMING. No, Ms. Congresswoman. I do not understand the

justification of that statement.

However, if I may, I would like to respond to your question about

the safety of the camp. On May 15th, I received an e-mail from my

electrical superintendent working out there, describing how our

guys have gotten shocked touching up against the frame of the

trailer. None of our wiring was powered up at the time of the modifications that we were doing over there for the May 15th meal.

So they shut down the breakers one by one to find the cause.

One of the feeds for the oven had actually melted. This was a feeder wire to the ovens, equipment KBR did not supply, that actually

melted and came into contact with the trailer, causing personnel in

there to get shocked or electrocuted.

It did not trip the circuit breaker, the over-current protection, because it was improperly grounded. That is another safety issue that

we discovered during the May 14th startup.

This goes on, ma’am.

Mr. TIERNEY. Thank you.

We can cover that maybe another time. Thank you, Ms. Watson.

Ms. WATSON. I will continue to probe this if we have a second

round.

Mr. TIERNEY. Thank you very much.

Mr. Westmoreland, you are recognized for 5 minutes.

Mr. WESTMORELAND. Thank you and thank you for coming to testify.

Are you aware of any labor abuse that was involved?

Mr. DEMMING. No, Mr. Congressman.

Mr. WESTMORELAND. Let me ask you another question referring

to some of these pictures that were submitted. Are you familiar

with the pictures that have been submitted?

Mr. DEMMING. Yes, I am, Mr. Congressman.

Mr. WESTMORELAND. The last picture shows and I know the

exact term for it but shows the measurement of the wires.

Mr. DEMMING. That is correct.

Mr. WESTMORELAND. Could you tell me what those numbers actually say on that picture?

Mr. DEMMING. That is correct. On the top picture, the micrometer reading is the cable that we buy, that we have had in stock

from our purchases. The 3.9 is the diameter dimension of the copper wire inside that cable. It is a multi-conductor cable.

If you take the diameter divided by 2 squared and do some mathematics, you get the area in millimeters of that cable which comes

to a little over 10 millimeters. That is referred to as a 10 millimeter square conductor or multi-conductor cable.

The bottom picture shows the suspect counterfeit cable marked

clearly 10 millimeter square. With the micrometer gauge on that,

it is reading 2.8.

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Again, if you do the mathematics, Mr. Congressman, the area

square of that conductor will come out to 6 millimeters. That 6 millimeter difference is a significant amperage load difference on that

cable of what it is capable of carrying.

Mr. WESTMORELAND. Thank you.

I notice you have a calculator there next to it. So I am assuming

that you just can’t do this in your mind. It takes some type of calculation to come up with these millimeters. Is that correct?

Mr. DEMMING. That is correct, Mr. Congressman.

Mr. WESTMORELAND. How many electricians have you ever seen

on the job that carried around one of these whatever those things

were with a calculator?

Mr. DEMMING. Micrometer.

Mr. WESTMORELAND. Have you ever seen any electricians have

those in their nail pouch or their screwdriver belt or anything?

Mr. DEMMING. No, Mr. Congressman.

Mr. WESTMORELAND. OK.

In some of the other pictures, I noticed, and I am in the building

business. I have never seen red, blue and yellow wires. There

seems to be some type of color coding for these wires. What are the

different colors?

Why are some of the wires blue, some yellow and some red?

Mr. DEMMING. Mr. Congressman, that type of cabling and color

coding is indigenous to that region.

Mr. WESTMORELAND. I am sorry.

Mr. DEMMING. That type of color coding and cabling is indigenous to that region.

Mr. WESTMORELAND. OK.

So when I look at the panel box and I see red, yellow and blue,

that would be some kind of indication that somebody might have

a language barrier or something, but he would know to plug the

red wire in the red and the yellow into the yellow and the blue into

the blue.

Mr. DEMMING. Typically, just like the United States, Mr. Congressman, we have black, red, blue as an indication of phasing, and

this is the same configuration. Just they use different colors over

there, and that would be considered what we say RYB which would

be the same as black, red, blue.

Mr. WESTMORELAND. I have been in the construction business a

long time and seen a lot of panel boxes, and I have never seen any

that had the color codes for the cables to go into, but I understand

that.

Not only is there maybe something lost, I guess, in interpretation

or in wiring diagrams or differences in building codes or whatever,

but also the thickness of this wire would be something if you were

using metric or American or whatever to try to get in place that

this was only a 6 millimeter.

Do you know if by just cutting that wire with your hand that you

would have noticed any difference?

Mr. DEMMING. Mr. Congressman, I might be a little rusty on that

after being in the administrative portion of this industry for a

while, but the gentlemen that are in the field and do this every

day, it is very typical for them to distinguish the differences on

sight.

67

Mr. WESTMORELAND. OK, and let me ask you another question.

You mentioned the ground wiring to the boxes, and I looked and

I couldn’t tell where the ground wire would go. I didn’t see the bus

bar, I guess, or whatever on the box itself. But how much would

it cost to run a ground wire and hook it to these panels? What is an estimate? Are we talking about $10 million, $1 mil- lion, $100,000, $1,000? What would be the cost to correct this

grounding situation and really replace?

Mr. TIERNEY. Mr. Westmoreland, we are going to let him ask

that first question, if we might, because your time is expired and

I do want to hear the answer. Then we will move on. Thank you.

Mr. DEMMING. Mr. Congressman, I could not give you a price on

the cost of that because of the intricacy of the construction involved. The cable has already been run. In some spots and areas

of the camp, they have poured concrete roadways over, and this

would have to be tallied up as square footage.

Mr. TIERNEY. Thank you very much.

Mr. WESTMORELAND. Just to followup on that, just one question,

just one quick thing.

Mr. TIERNEY. If you can keep it very, very, very brief.

Mr. WESTMORELAND. Why would you have to run a ground wire

under a road? I am confused about that.

Mr. DEMMING. That is the way they ran the feeders, Mr. Congressman.

Mr. TIERNEY. Thank you.

Mr. Lynch, you are recognized for 5 minutes.

Mr. LYNCH. Thank you, Mr. Chairman. Thanks for holding this

hearing.

Thank you, Mr. Demming, for helping the committee with its

work.

I am going to let this electrical thing go at some point, but it

would seem to me. I spent 20 years working, strapping on the work

boots and working on a constructionsite before coming to Congress,

and I know my way around a constructionsite. This is a pretty

basic mistake here. This is basic.

Either the people doing the work at the very basic level should

have recognized what they were doing. If they knew what they

were doing, they would have known this was wrong. That is the

workers themselves, the workers themselves wiring this job for the

intended purpose. It should have been painfully obvious that they

were making huge mistakes here.

Then if you go to the next level, the foremen or forewomen that

are supervising the actual work, they should have known. Then, of

course, whoever is above them, the supervisors on the site, they

should have known. Then the quality control people who are supposed to be checking this work, they should have known.

This is like putting your pants on backward. This is something

that should have been obvious to anybody who was familiar with

electrical work, regardless of what country, regardless of what

standard. This was just totally unacceptable.

When you turn the appliances on and the wires start to melt, you

know you have yourself a problem. So I think this is something

that is inherent in the whole system here. It is not a technical

misreading.

68

I have been over to Iraq seven times now, and a lot of that time

has been spent reviewing Iraq reconstruction projects, working

with Stuart Bowen.

Every time I go to a job site, and it is the same everywhere,

whether I visit Al Qaim. KBR has a project up there at the border

entry on the Syrian border. I go through there, and I try to talk

to the workers and had an Iraqi interpreter which was to no purpose because they were all from India, all these workers from

India.

Then we visit a water sewage treatment facility up near Irbil,

and they are all Pakistanis. So I couldn’t talk to them.

We went to a couple of projects in and around Baghdad. They

were Chinese and Korean.

It just makes me wonder. Here we are. We are trying to sell democracy to these folks, the Iraqis. We are pumping in $12 billion

a month there, and yet every job I go to the Iraqis aren’t working.

It is like we have our policy wrong. If we are going to convince

them democracy is the way to go, you don’t do that through the Defense Department. The way you show them that democracy works

is to provide them with jobs. If they were employed, maybe instead

of employing, and God bless the Indians and the Pakistanis and

the Chinese and the Koreans, but they have major problems in

Iraq right now.

We are providing the money. We are providing the construction

projects. We are supposed to be providing the oversight and the supervision. It seems to me that you don’t export democracy through

the Defense Department. You do it through the Commerce Department, the State Department and letting these folks go to work and

actually seeing what a normal life is like.

Take these people out of employment. The unemployment rate in

Iraq among males between ages 18 and 35 years old is probably up

over 50 percent. Put some of these folks to work.

I know you are probably not the guy responsible for that decision, but somewhere someone along the line ought to figure out

that if we put some of these Iraqis to work instead of bringing in

the lowest wage workers from around the world and exploiting

them, it might help the situation there.

Is that the practice?

I mean everywhere I go, it seems to be that the workers are from

somewhere else. Even though there is a ton of unemployed Iraqis

all over Iraq, doing God knows what, we seem to be employing

through our tax dollars, through government contracting, we are

employing everybody but the Iraqis. I just want to know if that is

the policy and is that something that you have seen.

Mr. DEMMING. Mr. Congressman, I employ over 300 Iraqis in the

engineering and construction side of KBR’s support for USMI.

Mr. LYNCH. Out of how many people?

Mr. DEMMING. That is out of 400 and some odd people.

Mr. LYNCH. So 75 percent of your entire department.

How about KBR on the ground in Iraq, how about the total number there?

Mr. DEMMING. I am not understanding your question. I am on

the ground in Iraq.

69

Mr. LYNCH. No, no. I am talking about Kellogg Brown and Root,

all your operations.

Mr. DEMMING. Oh, the whole operations, I don’t have that information.

Mr. LYNCH. All right. I will let it go at that. Thank you, Mr.

Chairman.

Mr. TIERNEY. Thank you, Mr. Lynch.

Mr. Issa, you are recognized for 5 minutes.

Mr. ISSA. Thank you, Mr. Chairman.

Mr. Demming, it is kind of interesting. This is a hearing in

search of an enemy, and I keep wondering how many and when

they are going to turn on you because obviously this has been the

Democrat agenda from day one. Halliburton, once managed by the

Vice President. KBR, owned by him. Obviously, you are bad guys

as a result.

It is sort of interesting that you are here today as a neutral observer, somebody to give us information. It is sort of amazing when

it is convenient, KBR is what it is, an incredibly knowledgeable

global builder who understand the right way, the wrong way, the

expeditious way to do things.

Do you see any irony there in your role?

Mr. DEMMING. I will defer that comment.

Mr. ISSA. You are a wise man. I see the irony, fortunately, for

both of us.

I am not an engineer, but I did once operate an engineer company for the Army and did a little other work. What this rat’s nest

looks like to me is like most of the 20 by 20’s we in the Corps of

Engineers built.

It looks like every piece of temporary expeditious building that

ever went on when you didn’t go for permits and you used romex

or whatever you had to go from point to point to get a job done.

Is that what it looks like to you?

Mr. DEMMING. Yes, it does, Mr. Congressman. I would just like

to iterate that in the National Electrical Code, Article 590, temporary refers to 90 days or less.

Mr. ISSA. Would it surprise you to know that 75 percent of Fort

Ward when I was there was temporary buildings? They were built

in World War II. I know I look old, but I wasn’t there in World War

II or in 90 days after.

Mr. DEMMING. No. No, Mr. Congressman. I was stationed there

prior to going overseas with the U.S. Army in 1971.

Mr. ISSA. Now the State Department estimate—I know you don’t

have an estimate—is that to do the basic compliance wiring for the

items that are shown here, it is $4,000 to $6,000 to correct that.

I am assuming that they are going to drive in a ground on the

building side and pick up a new ground there.

Is that something that if you were having to retrofit this, you

would figure you could do, and with the labor force cost there, you

could do for $4,000 to $6,000, just a rough guess, to correct it, simply to make it safe?

Mr. DEMMING. Mr. Congressman, I can’t comment on that price.

We run a different system to make things safe because of the

ground and the environment over there. It is called a solid grounding system.

70

Mr. ISSA. OK. I understand. It is probably more than we can get

into for how we would establish a ground, but basically let us

switch to another question.

You have operated out of construction trailers for a long time,

haven’t you?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. ISSA. You consider them temporary.

Mr. DEMMING. No, Mr. Congressman.

Mr. ISSA. You don’t consider a construction trailer temporary?

Please, you don’t have to say Mister and Congressman.

Mr. DEMMING. A construction trailer, yes, I do. The environment

that we are in there at this particular point in time, it is running

over 90 days.

Mr. ISSA. No, no. I understand that, but I just want to make sure

I understand that construction trailers aren’t permanent. The connection, the actual drop, the electrical drop to a construction trailer

is a separate consideration. It is done normally with a black multiconductor that comes down. You do different connections on a

constructionsite.

Mr. DEMMING. That is correct.

Mr. ISSA. OK.

Often on a constructionsite, and I am not making any apologies

for this kind of wiring, but these wires and how they are run, these

things, they are often done expeditiously, quick order. Is that true

on a constructionsite?

Mr. DEMMING. The typical wiring is on the startup of a project

or the ending of a project or during a project is done hastily.

Mr. ISSA. Was anyone killed as a result of these mistakes?

Mr. DEMMING. When I first landed on the ground in 2003, we did

have several soldiers get electrocuted to death, sir.

Mr. ISSA. As a result of these trailers?

Mr. DEMMING. As a result of bad wiring.

Mr. ISSA. These trailers?

Mr. DEMMING. Not these trailers. I am not sure of the actual.

Mr. ISSA. OK. I just wanted to find out because that is a separate

concern and each accident investigation should be done.

Last question because my time is expiring and it is an important

one, and I think it is one that we all need to have an answer to.

In this combat zone, if you do not source materials at a fairly expensive amount directly from a known source, if you simply buy on

the local market or through intermediaries in Iraq, is it likely to

get counterfeits and is that one of the reasons that KBR and other

prime contractors pay extra to have known sources they are buying

from in the region rather than picking up on the domestic market?

I am particularly referring to the micrometer measurings and the

counterfeits that obviously got into this project.

Mr. DEMMING. That would be a concern, but it is not common or

atypical. We have acquired the proper material in-country through

local purchasing.

Mr. TIERNEY. Thank you, Mr. Issa.

Ms. Norton, you are recognized for 5 minutes.

Ms. NORTON. Thank you, Mr. Chairman. I appreciate this hearing.

71

The State Department, we have been hearing for months now as

well as other civilian employees have eschewed going to Iraq even

in the safe zones. We are trying to get our soldiers out. We hope

we would leave Embassy employees there. This hearing is important to establish whether it is safe for people to be there and

whether the United States of America is making it safe.

I understand that you have brought some pictures with you, and

I am going to ask a series of questions to try to get to responsibility

here. We can look and say, well, you could always fix that. I would

like to know who is responsible.

We are now looking at this picture before you. Could you describe

for us what the problem is as you see it in your expertise?

Mr. DEMMING. Ms. Congresswoman, this particular picture here

is showing the cabling branch circuits from all the other areas of

that particular section of modular unit of the DFAC. This is underneath the DFAC.

Ms. NORTON. This is what, sorry?

Mr. DEMMING. Underneath the DFAC, underneath the floor.

Ms. NORTON. What is the specific problem that you see?

Mr. DEMMING. OK. If you look at the cabling there, the wire nuts

which show the connections where the wires may have been spliced

together, we call them wire nuts, the little red things. Typically are

installed in a box with a cover.

Ms. NORTON. And it is not with a cover, what is the problem?

What is the problem?

What is the danger? What is the problem?

Mr. DEMMING. These splices are not done correctly according to

any standard or code. There is no supporting on the wire as well

as some of the construction. The holes going through the 2 by 4

typically require about an inch and a quarter from the edge. You

can see the holes are drilled right at the edge which would allow

for a nail to puncture the cable.

Ms. NORTON. Did KBR do this? Was it done prior to KBR?

Did First Kuwaiti do it? Who did this?

Mr. DEMMING. This is the BESF camp. KBR did not perform the

construction on this camp.

Ms. NORTON. Can we go to the next picture? Would you describe,

looking at this picture, if there is a problem, what is the specific

problem?

Mr. DEMMING. I believe what the photographer was trying to depict here is there is no ground bar in this panel. This would be the

submain panel that is fed directly from the main panel from the

generators.

Ms. NORTON. When you say ground bar, make layman dummies

like me understand what you mean.

Mr. DEMMING. I am sorry. Excuse me, Ms. Congresswoman.

Ms. NORTON. And what the specific problem is from the point of

view of not having the ground bar.

Mr. DEMMING. There is always the availability of being shocked,

and there is no protection for the over-current device, the breakers

there, to operate properly.

Ms. NORTON. Thank you.

Let us go to the next picture. Would you describe the problem

there, the specific problem in layman’s terms?

72

What are we looking at? What is the problem in layman’s terms?

What is the danger?

Mr. DEMMING. As you can see, the feet and this receptacle is on

the floor, improperly installed.

Ms. NORTON. So the feet, that is where you plug?

Mr. DEMMING. Correct. That is a receptacle.

Ms. NORTON. What is the problem with that?

Mr. DEMMING. It is on the floor, installed improperly. It would

be subject to water and moisture every time they clean the DFAC.

Ms. NORTON. Who did this? Did KBR do it? Was it done prior to

KBR arriving on the scene?

Mr. DEMMING. This was done during the construction of the

BESF camp, not by KBR.

Ms. NORTON. Let us go to the next picture. Next picture, please.

Describe what this picture is. If there is a problem, what is the

problem?

Mr. DEMMING. OK. These are 100 amp panels installed inside

the dining facility. Again, you have to look really close at these pictures. The grounding where the green wires are, the main ground

going back to the main panel, is not correctly or non-existent.

Ms. NORTON. So what is the problem from the point of view of

somebody in the building, for example?

Mr. DEMMING. This again, there is a prelude to electric shock

and a safety hazard, and the over-current devices won’t work properly.

Ms. NORTON. Next picture, please. Would you describe any problem, if you see a problem?

First, tell us what this is a picture of and if you see a problem,

would you tell us what the problem is?

Mr. DEMMING. During one of the technical inspections we had

after the event where people opened up some of the commercial

cooking equipment installed by others in this DFAC, on the right

side where the brown, blue and yellow cables are connected to that

terminal strip, are incorrectly terminated there and the phasing is

incorrect.

Ms. NORTON. With what result, perhaps?

Mr. DEMMING. That would cause. We have a hot wire on the neutral as well as on the line, so that would cause a short or 400 volts

instead of 230 volts for operation. That may cause a fire.

Ms. NORTON. Did KBR install these cables or were they installed

before KBR arrived on the scene?

Mr. DEMMING. This was again, Ms. Congresswoman, installed by

others.

Mr. TIERNEY. Thank you very much, Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman.

Mr. TIERNEY. Ms. McCollum, you are recognized for 5 minutes.

Ms. MCCOLLUM. Thank you, Mr. Chair.

When I am in a kitchen, whether it is here or if I am visiting

someone, and I do travel. I am in a lot of developing countries. I

have confidence that when I plug something in, I am not going to

receive an electrical shock because there is, as you described, an

international code, correct?

Mr. DEMMING. I am sorry, Congresswoman. Can you speak a little louder?

73

Ms. MCCOLLUM. When I travel somewhere and I travel internationally, and I am in developing countries quite often. I am in

U.S. embassies. I am in USAID hospital facilities or a small type,

the equivalent of a Motel 6, not even a four star hotel but just staying some place. I have confidence that when I go to plug something

in, when I go to flip a switch, that I won’t be electrocuted because

there is an international standard, correct?

Mr. DEMMING. Not necessarily, Congresswoman.

Ms. MCCOLLUM. Well, I am certainly seeing that, based on what

you are showing me here, I should have very little confidence of

anything that has been paid for by U.S. taxpayers’ money, that

there has been any kind of international standard followed based

on these pictures that you showed me.

You would have no confidence without inspecting something

yourself before you plug something in, in this compound, based on

what you have shared with us today, correct?

Mr. DEMMING. Let me see if I understand your question, Congresswoman. The countries you have been in, developing countries,

the environment is atypical.

Ms. MCCOLLUM. I am saying U.S. buildings that I have been in

where U.S. employees are staying or where the USAID has built

a hospital or a clinic or embassies, that I should feel fairly confident that if I flip the light switch, I am not going to be electrocuted.

Mr. DEMMING. Correct.

Ms. MCCOLLUM. But from what I am seeing here and from you

have shown me, especially in a kitchen area where there is water

and grease and a lot of electrical appliances being plugged in, that

I would be a fool to have any confidence that if I plug something

in or flipped a switch if I was a worker there, that I might not be

severely shocked or even electrocuted.

Mr. DEMMING. Hopefully, the entity that would release the building or facility prior to it opening to the public would have made

these inspections and corrected all those faults, and that is kind of

the position that we are playing here right now, Congresswoman.

Ms. MCCOLLUM. So that when you have your employees go in

there and they plug something in or turn on a switch, that you

don’t have a worker that is severely injured or possibly even killed

by this poor workmanship.

Mr. DEMMING. That is correct.

Ms. MCCOLLUM. I found it interesting, one of the questions. You

had spoken about counterfeit wiring earlier, and someone said well,

if you follow the specifications, there isn’t a problem. Specifications

don’t ever call for counterfeit wiring, do they?

Mr. DEMMING. No, Congresswoman.

Ms. MCCOLLUM. No, I wouldn’t think so.

Specifications wouldn’t call for, as you described in here, an outlet on the floor of a dining area where there is going to be water

because people mop it up.

To have a non-waterproof, flush-mounted plug-in as one of the

pictures showed, that wouldn’t be a specification that a U.S. contractor would expect going into a dining facility, would they?

Mr. DEMMING. There are codes that regulate that type of installation, Congresswoman.

74

Ms. MCCOLLUM. In your opinion, before KBR comes into take

over running the facility and using it to prepare the meals, would

you have assumed, because U.S. taxpayers’ dollars were being used

to construct this, even if it is temporary, this dining facility, there

would have been some oversight, some inspection to make sure

that when you walked in that day, you could have plugged in the

equipment, flipped a switch and started operating as you had

planned?

Mr. DEMMING. We do perform those inspections prior to operating or taking over a facility, Congresswoman.

Ms. MCCOLLUM. What was your reaction when you sent the cable

saying that there were problems, when you went up the chain of

command, saying that there are problems with this?

What was the Government’s reaction, who had contracted out

and paid for this service? Shocked? Surprised? Had they inspected

it?

Mr. DEMMING. They showed concern, Congresswoman.

Mr. TIERNEY. Thank you, Ms. McCollum.

Ms. MCCOLLUM. Thank you.

Mr. TIERNEY. Mr. Sarbanes, do you have any questions?

Mr. SARBANES. Just a couple, Mr. Chairman.

Mr. TIERNEY. You are recognized for 5 minutes.

Mr. SARBANES. Thank you.

Mr. Demming, KBR’s connection to all this, I am trying to understand. This is a basic factual question. In terms of First Kuwaiti,

was the prime contractor for this base camp or guard camp that

was put together, and KBR was coming in behind for what purpose? Can you just tell me that again?

Mr. DEMMING. We were asked to care for the facilities under an

operations and maintenance agreement with the Department of

State Facilities Management and our client, the U.S. Army. When

we performed the technical inspection prior to accepting the operations and maintenance agreement is when we started noticing.

Mr. SARBANES. So First Kuwaiti was not a subcontractor to KBR

in this instance.

Mr. DEMMING. No, Congressman.

Mr. SARBANES. But has First Kuwaiti been a subcontractor for

KBR in other situations?

Mr. DEMMING. Yes, sir, Mr. Congressman. We have used First

Kuwaiti for other services as a subcontractor.

Mr. SARBANES. In connection with this Embassy project or with

other things separate from the project?

Mr. DEMMING. With other smaller projects.

Mr. SARBANES. The problems that you discovered or found when

you got there, for the moment, all your knowledge is that related

to this guard camp. You don’t have any knowledge yet that there

are similar problems in the other parts of the project, the larger

Embassy project. Is that what you said?

Mr. DEMMING. That is correct, Congressman.

Mr. SARBANES. Are the teams of people that were deployed on

this guard camp, whether electrical teams or others, are they completely separate from teams that might be deployed to other parts

of the project, as far as you know, even though they are all First

Kuwaiti employees?

75

Do you understand what I am asking you?

Mr. DEMMING. No, Mr. Congressman. Could you repeat that?

Mr. SARBANES. The First Kuwaiti employees who would have

worked on the guard camp, would any of those employees either

have worked on the other parts of the Embassy project or is there

a possibility they will work on the Embassy project going forward?

Mr. DEMMING. I can’t answer that, Mr. Congressman.

Mr. SARBANES. But that is certainly possible, wouldn’t you say?

Mr. DEMMING. I would imagine so. It is not a very big place.

The extent of some of the other contracts we use First Kuwaiti

for is mainly concrete, providing concrete, not any, no projects to

this extent.

Mr. SARBANES. I was looking through the submitted testimony of

First Kuwaiti, and they said here with respect to the guard camp

that although constructed by First Kuwaiti, it is a project separate

from that of the Embassy with separate budgets, different First

Kuwaiti management teams and different State Department supervisors.

I guess the implication of that being that whatever problems

there may be associated with the guard camp are things that could

be kind of confined to that because there are these separate management teams and separate budgets.

But you have indicated it is certainly possible that the actual employees that would be deployed to work on an electrical component

of the larger project could be some of the same employees that

worked on this guard camp, right? I mean that is very possible.

Mr. DEMMING. To my recollection, Congressman, I don’t know

anything about that. Our involvement over there is very limited as

far as the correlation between.

Mr. SARBANES. Would you agree, though, that would certainly be

something we would want to know, that you would want to know?

You would want to know whether the folks that were responsible

for this shoddy workmanship, where they are going next, what is

their next project, what is the next footprint they are going to

make on the larger Embassy project. I mean you would agree that

would be something reasonable to know.

Mr. DEMMING. I would like to defer that question, Mr. Congressman.

Mr. SARBANES. Thank you. I have no further questions.

Mr. TIERNEY. Thank you, Mr. Sarbanes.

Mr. Cannon, you are recognized for 5 minutes.

Mr. CANNON. Thank you, Mr. Chairman. I appreciate your holding the hearing and would like to yield to the ranking member, Mr.

Davis.

Mr. DAVIS OF VIRGINIA. Thank you.

Let me just give a perspective. This is a punch list item we are

talking about. You plugged it in. The wiring didn’t work.

This is a firm fixed-price contract. First Kuwaiti hasn’t been paid

a penny yet, to my knowledge. Do you have any knowledge that

they have been paid anything, Mr. Demming?

Mr. DEMMING. No, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. The way this works is they haven’t been

paid a penny. They have to fix it. They have to deliver it. We pay

for it. We don’t pay for it until it is perfect.

76

It is not uncommon in construction whether they are complex

construction projects or a temporary project like this, that things

in the punch list go wrong. Sometimes there is painting speckled,

something gets damaged and the like. Isn’t that your experience,

that there are usually numerous punch list items on inspections?

Mr. DEMMING. Yes, there is, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. Thank you.

So let us put this in perspective. My understanding is the cost

that it would take for these repairs, wiring and so on, if they need

to be done—again we don’t know what the specs were but we know

what the expectation was—is $4,000 to $6,000.

It costs more to hold this hearing than it would to fix this, and

this is under a firm fixed-price contract.

Let me just ask this. KBR does do business with First Kuwaiti,

right?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. DAVIS OF VIRGINIA. You have not found them an irresponsible contractor?

Mr. DEMMING. Mr. Congressman, I don’t deal with the contracts,

only with the projects.

Mr. DAVIS OF VIRGINIA. But you deal with them on the projects.

Have they been a bad contractor?

Mr. DEMMING. They usually work for us in the capacity of providing something.

Mr. DAVIS OF VIRGINIA. Do they do a good job or a bad job?

Mr. DEMMING. They do OK.

Mr. DAVIS OF VIRGINIA. All of your knowledge that you have testified on today is about the temporary trailer area, not the Embassy, is that correct?

Mr. DEMMING. That is correct.

Mr. DAVIS OF VIRGINIA. You have really no knowledge about the

Embassy contract, per se, which was hyped in the headline for this

hearing today.

Mr. DEMMING. That is correct.

Mr. DAVIS OF VIRGINIA. I just wanted to clarify that. I think that

is all I have. I would yield.

Mr. CANNON. I would be happy to yield to Mr. Issa.

Mr. ISSA. Thank you.

You are familiar in Iraq with the other temporary structures that

are military, aren’t you? You have seen the thousands of tents that

our troops are in?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. ISSA. Have you looked at the electrical on any of those?

Mr. DEMMING. We have in the past, Mr. Congressman.

Mr. ISSA. Just quickly, they have been there more than 90 days,

right?

Mr. DEMMING. Yes, sir, Mr. Congressman.

Mr. ISSA. In some cases, we have had to replace canvas because

it sort of eroded over the time of this war, isn’t that your understanding?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. ISSA. In fact, what we have is laid on top of the ground,

black double-insulated, multi-conductor running to those tents from

my experience. Is that roughly your experience?

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Mr. DEMMING. Typically, on the unit that I run with the USMI,

Mr. Congressman, all our cabling if it is going to ground, even a

tent, is buried. It is put under ground a minimum of 2 feet of 750

millimeters. This is for safety purposes. In case there is an event

or an IDF attack, we have to run.

Mr. ISSA. I understand they have been going back and retrofitting. Perhaps I should have said on my first of many trips to Iraq

this is how they did it and they have been going back and retrofitting.

Have you been involved with other combat engineer type operations, though, over the years in support or past experience? Have

you seen how they typically go?

Mr. DEMMING. No, Congressman.

Mr. ISSA. Well, let me just run you through my limited experience. Typically, you come in. You roll a trailer in. You roll out some

black multi-conductor of the correct amperage. You hook it up. You

put the other end on a generator. You crank it up. You got a light

bulb going and a couple of plugs.

Then as you have resources, you come back and do updates and

modifications as you need to be. By the way, no excuse for any safety violations, no excuse for bare wires or absence of grounds.

But isn’t that sort of the normal way you do it in a combat environment when you bring in temporary structures is you get the

things up and operational and get people out of the elements and

then you do continuous refinements and improvements? Has that

been your experience?

Mr. DEMMING. Mr. Congressman, I believe the standards for that

would 281–1.

Mr. ISSA. But isn’t it true that the Corps of Engineers in a combat environment operates under what is necessary to accomplish

the mission? Isn’t that your understanding in a combat environment?

Mr. DEMMING. I was not a combat engineer, Mr. Congressman.

Mr. ISSA. OK, maybe that was a luxury you didn’t have.

Isn’t it true that these trailers were made in another country and

brought in and that many of these flaws which needed to be corrected—the State Department says $6,000 worth—would normally

happen if you had a one time subcontractor and you are trying to

get things done in a combat environment on a temporary basis in

order to accomplish a mission?

Isn’t that reasonable that you take the trailer and make the retrofit because you can’t afford to wait another 4 months to get structures?

Mr. DEMMING. Yes, Mr. Congressman.

Mr. ISSA. Thank you.

Thank you, Mr. Chairman.

Mr. TIERNEY. Thank you.

I just have one question before I let you go, Mr. Demming, and

I thank you for your patience.

Given your experience and given your observations out there,

knowing that the same company has done the camp area as well

as the Embassy, would you advise that we ought to have any concern about the electrical wiring in other parts of the Embassy?

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Mr. DEMMING. I am sorry, Congressman. Can you repeat the last

part of that.

Mr. TIERNEY. Given your experience, given your observations and

understanding that the same company that is the contractor for the

work that you have been talking about is the same contractor for

the Embassy, ought there be some concern about the wiring in

other parts of the Embassy?

Mr. DEMMING. I would really rather not make that determination

here.

Mr. TIERNEY. I am asking for an opinion, so you don’t need to

make a determination. I am asking for an opinion based on your

background and your observations.

Mr. DEMMING. I would like to defer that opinion, Mr. Congressman.

Mr. TIERNEY. I know you would, sir, but I am asking for your

opinion.

Mr. DEMMING. My opinion, there may be concern here.

Mr. TIERNEY. Thank you, Mr. Demming.

I want to thank you very much for your testimony today and

thank the members of the panel as well. You may be happy to

leave that table if you would, and the other witnesses will come on.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, point of order, I thought

we were doing a second round.

Mr. TIERNEY. No, sir, we are not.

Mr. DAVIS OF VIRGINIA. Oh, OK.

Mr. TIERNEY. Thank you, Mr. Demming.

Mr. DEMMING. Thank you, Mr. Chairman.

Mr. TIERNEY. We will take about a 1-minute break here while

the second panel gets up here.

[Recess.]

Mr. TIERNEY. The committee and the subcommittee will now receive testimony from our second panel.

I would like to introduce the members of our panel, the witnesses

that are here to offer information about First Kuwaiti labor practices from their perspective. Mr. John Owens is the former First

Kuwaiti construction foreman on the Embassy project and Mr.

Rory Mayberry is the former First Kuwaiti subcontractor medic on

the Embassy project.

Thank you both for being here today and for sharing your testimony and experiences. I know it took courage to come here and to

participate.

As for your full statements, they are going to be entered onto the

record and transcript.

You may give a brief account of that if you like. You have 5 minutes to talk. You might want to summarize your testimony so you

try to get it in the 5-minutes. I will try not to cut you off but may

remind you if you are going over.

It is the policy of the committee and of the subcommittee to

swear you in before you testify, so I ask you to raise your right

hands and stand if you would.

[Witnesses sworn.]

Mr. TIERNEY. The record will please reflect that both witnesses

have answered in the affirmative.

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Again, I ask you to proceed and remember the 5-minute rule if

you could.

Mr. Owens, I ask you to go first.

STATEMENTS OF JOHN OWENS, FORMER EMPLOYEE, FIRST

KUWAITI TRADING AND CONTRACTING CO.; AND RORY

MAYBERRY, FORMER EMPLOYEE, FIRST KUWAITI TRADING

AND CONTRACTING CO.

STATEMENT OF JOHN OWENS

Mr. OWENS. Thank you to Chairman Waxman and Chairman

Tierney and the members of the full committee for inviting me to

testify here today.

My statement will address labor abuse, human trafficking and

other concerning issues that I personally witnessed on the

constructionsite at the U.S. Embassy in Baghdad.

My name is John Owens. I have worked on construction projects

for many years, and since 2002 I have worked on U.S. Embassy

projects. My specialty is architectural finishing.

After I finished working with the U.S. Government on the construction of the Embassy in Cambodia, I went looking for a new

project and I signed on with First Kuwaiti to work on the U.S. Embassy in Baghdad. They signed me on as a general foreman on the

constructionsite. In all, I was employed by First Kuwaiti for approximately 8 months from November through June, from November 2005 to June 2006.

When I arrived at the site of the U.S. Embassy, the biggest thing

that hit me right off the bat was I wanted to know where all the

Americans were. Based on my experience working on other embassies, I was used to seeing more Americans onsite to manage the

construction and direct the workers. It turns out there were two

other Americans onsite. However, they were not employed by First

Kuwaiti. They were employed by subcontractors.

I would like to take a moment to describe conditions on the site

in a little more detail.

This was a man camp and by nature not the most pleasant of

places to be, yet the conditions were deplorable beyond even what

a working man should tolerate. Foreign workers were packed into

trailers very tight.

There was insufficient equipment and basic needs like shoes and

gloves. If a construction worker needed a new pair of shoes, he was

told, no, do with what you have, by First Kuwaiti managers.

The contract for these workers said they had to work 12 hours

a day, 7 days a week, with some time off on Friday for prayers.

A few people from India told me they were making $240 a

month. A guy from Sierra Leone told me got paid $300 a month.

A Pakistani worker told me he made $900 a month, but he had to

pay additional costs for his own work permits and visas, and afterwards he told me he probably averaged about $300 a month.

Many of the workers were verbally and physically abused, intimidated and had their salaries docked for as much as 3 days pay for

reasons such as being 5 minutes late, sitting down on the job and

other stuff.

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Because I was the only American onsite working for First Kuwaiti, many of the workers thought I had some kind of power that

I could help them with their problems. Many workers often came

to me and told me that they hadn’t been paid overtime, that their

salaries were short, and they also came to me with their health

problems, often asking me if I could go offsite to get some medication for them.

It is not uncommon for a construction company to use native

workers or even foreign workers to build an Embassy. I have witnessed this at other Embassy constructionsites that I have worked

on. However, I do believe that if more Americans were onsite at the

U.S. Embassy in Baghdad, the abuses I witnessed would not have

been taking place. No American company would ever treat people

the way I saw people being treated on that job.

As I think of it, given the size of this job, my experience tells me

that the State Department would usually have far more American

staff members on hand to oversee the construction project.

I would like to touch briefly on the issues of human trafficking,

human trafficking that I believe I witnessed there. When flying

from Kuwait to Baghdad, I saw a bunch of workers in the boarding

area with boarding passes for Dubai. I was the only one in the

group that had a boarding pass that said Iraq on it. When I asked

a First Kuwaiti manager, he told me to be quiet and don’t say anything. If Kuwaiti customs knew they were going to Iraq, they

wouldn’t let them on the plane.

When we landed, these workers were taken away on buses.

There was nobody manning the customs stations, and I just walked

through without checking. Nobody asked for my passport.

Mr. Chairman and members of the committee, I believe that I

had more experience in building embassies than anybody else on

the site. The Embassy was not far enough along for me to use my

specific skills, so First Kuwaiti put me to work as a security liaison

among other tasks.

I think the American people might understand what was going

through my head over there as I watched this abusive and unprofessional practice taking place. I kept thinking it would get better.

I kept telling myself it would get better. But after more time had

passed and things didn’t get better, I felt bad all the time and I

realized it was time to resign and maybe speak up for those that

don’t have a voice.

This ends my statement. I would be pleased to take your questions.

[The prepared statement of Mr. Owens follows:]

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Mr. TIERNEY. Thank you, Mr. Owens.

Mr. Mayberry, you may proceed with your opening statement if

you wish.

STATEMENT OF RORY MAYBERRY

Mr. MAYBERRY. I would like to thank Chairman Waxman and

Chairman Tierney and other members of the full committee for allowing me to come testify today.

I believe I am one of only a few Americans that have recently

worked on the site of the new Embassy in Baghdad. My impressions about how the construction was being managed left me incredibly disturbed.

My name is Rory Mayberry. I am an emergency medical technician. Based on my professional experience and the fact that I have

spent 4 years as a medical technician in Iraq, I was contacted by

MSDS Consulting, LLC, March 2006.

MSDS had seen my resume and wanted to contact me and contract me out to First Kuwaiti, the company that was constructing

the U.S. Embassy in Baghdad. Under the contract, I was to provide

emergency medical services on the site of the Embassy.

I went into this contract with the same good faith as I did with

all my other contracts. I wanted to use my medical skills to stop

people from dying in a dangerous place.

According to my contract, I reported to First Kuwaiti managers

in Kuwait City where I signed my paperwork and received photo

identification. Nothing led me to be concerned at this point.

A few days later, I was given my flight information to Baghdad.

At this point, First Kuwaiti managers asked me to escort 51 Filipino nationals and to make sure that they got on the same flight

as I was headed to Baghdad.

Many of these Filipinos did not speak any English. I wanted to

help them to make sure that they got on the flight OK, just as my

managers had asked me. We were all employees of the same company was my feeling.

But when we got to the Kuwait Airport, I noticed that all their

tickets said that we were going to Dubai. I asked why.

A First Kuwaiti manager told me that Filipino passports do not

allow Filipinos to fly to Iraq. They must be marked going to Dubai.

The First Kuwaiti manager added that I should not tell any of the

Filipinos that they were being taken to Baghdad.

As I found later, these men thought that they had signed up for

jobs to work in Dubai hotels. One fellow I met told me in broken

English that he was excited to start a new job as a telephone repairman. They had no idea that they were being sent to do construction work at the Embassy.

Well, Mr. Chairman, when the airplane took off and the captain

announced that we were headed to Baghdad, all you know what

broke out on the airplane. The men started shouting. It wasn’t

until the security guy working for First Kuwaiti waved an MP–5

in the air that the men settled down. They realized that they had

no other choice but to go to Baghdad.

Let me spell it out clearly. I believe these men were kidnapped

by First Kuwaiti to work on the U.S. Embassy. They had no passports because they were confiscated at the Kuwait Airport. When

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the airplane touched down in Baghdad, they were loaded onto

buses and taken away.

Later, I found out that they were smuggled into the Green Zone.

They had no i.d., no passports and were being smuggled past U.S.

security forces.

I had a trailer all to myself in the Green Zone, but they were

packed 25 to 30 a trailer, and every day they went out to work on

the construction of the Embassy without proper safety equipment.

I went out on the constructionsite to watch. There were a lot of

injuries out there because of the conditions these men were forced

to work in. It was absurd.

I had been hired based on my experience with OSHA guidelines

and compliance, and I saw guys without shoes, without gloves, no

safety harnesses and on scaffolding 30 feet off the ground, their

toes wrapped around the rebar like a bunch of birds. One guy was

up there intoxicated on painkillers, and I had to yell and scream

for 10 minutes until they got him down.

I was afraid of blowing the whistle on this because I didn’t want

to end up outside the walls of the Green Zone and left to fend for

myself. I stayed in Baghdad at the site of the U.S. Embassy a total

of 5 days before I was sent home.

Once I got home, I contacted the military about what I had witnessed. After much delay and e-mail traffic, the military told me

in fact the State Department is in charge of the Embassy construction.

I have read the State Department Inspector General’s report on

the construction of the Embassy. Mr. Chairman, it is not worth the

paper it is printed on. This is a coverup, and I am glad that I have

had the opportunity to set the record straight. I look forward to

your questions.

[The prepared statement of Mr. Mayberry follows:]

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Mr. TIERNEY. I want to thank you both for your testimony. Your

testimony in written form has been put on the record already by

unanimous consent as I noted earlier.

Let me start the questioning by asking Mr. Owens. Did you observe any physical abuse of workers on the site?

Mr. OWENS. Yes, sir.

Mr. TIERNEY. What is it that you saw?

Mr. OWENS. Guys getting shoved to the ground.

Mr. TIERNEY. By who?

Mr. OWENS. First Kuwaiti managers and just generally being

pushed around, shoved to the ground, yelled at, screamed at, that

kind of stuff.

Mr. TIERNEY. Did you report those incidents to First Kuwaiti or

to the OBO?

Mr. OWENS. No.

Mr. TIERNEY. Did you ever witness any First Kuwaiti officials

carrying firearms or weapons on the compound site?

Mr. OWENS. Yes, sir.

Mr. TIERNEY. Are you aware that according to the contract that

First Kuwaiti had with the State Department you needed permission to carry a weapon on the site?

Mr. OWENS. Yes, sir.

Mr. TIERNEY. Did either of you witness First Kuwaiti officials,

managers or foremen verbally abusing third party national workers?

Mr. OWENS. Yes.

Mr. TIERNEY. You indicated you had, Mr. Owens.

Mr. Mayberry, did you?

Mr. MAYBERRY. I didn’t hear the question.

Mr. TIERNEY. Did you witness any verbal abuse by foremen of

the nationals?

Mr. MAYBERRY. Yes, sir.

Mr. TIERNEY. To the best of your knowledge, any third country

nationals, how did they take that abuse and what reactions resulted?

Mr. MAYBERRY. What I had seen, they would cower down to

them. They would stop talking. Anything that they had to say, they

would literally cower down to the management team.

Mr. TIERNEY. Mr. Owens, what was your experience?

Mr. OWENS. Yes, that is correct. They would back down.

Mr. TIERNEY. Mr. Owens, are you aware of any instance where

a laborer was held or detained against his or her will?

Mr. OWENS. Yes, sir.

Mr. TIERNEY. What would happen if a laborer wanted to leave

the work site?

Mr. OWENS. They wouldn’t be. The triple canopy guards would

stop them. They wouldn’t be allowed unless they could sneak over

the wall.

Mr. TIERNEY. Did you witness any opportunity where that occurred?

Mr. OWENS. Yes.

Mr. TIERNEY. Would you tell us about it, please?

Mr. OWENS. One night, 17 Filipino workers went over the wall

to find another job in the Green Zone.

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Mr. TIERNEY. How were you aware of that?

Mr. OWENS. They told me.

Mr. TIERNEY. Did you see what happened as a result of their attempt to go over the wall?

Mr. OWENS. Well, when they went over the wall, First Kuwaiti

sent somebody out to look for them and they brought them back.

I guess they told the ones that got a job with another company.

They were told. The company was told they would get sued if they

kept that worker, that First Kuwaiti had paid to bring them to

Iraq. So, you know, they were supposed to work for First Kuwaiti.

Mr. TIERNEY. Were you aware, Mr. Owens, of any worker safety

protection programs or training that was in place at the work

sites?

Mr. OWENS. None whatsoever.

Mr. TIERNEY. How did that compare to other workplace safety

programs or Embassy construction projects on which you have

worked in the past?

Mr. OWENS. The whole time I was on the site, I never saw one

safety meeting, not one. But on other, all of the other Embassy jobs

that I worked on, there was a safety meeting every week.

Mr. TIERNEY. Did you ever report the lack of safety meetings or

incidents of that to any other official?

Mr. OWENS. Yes, I spoke with Mary French, the project director.

Mr. TIERNEY. What reaction did you get from her?

Mr. OWENS. It was a conversation. I noticed that there was a lot

of guys on the job that weren’t wearing hard hats and they were

wearing turbans, you know, where they just take cloth and wrap

it around their head, and I asked her. I said, how can they get

away with that?

Mary told me that the hats were against their religion. They

couldn’t wear a hat. They had to wear the turban.

So I said, well, that really won’t do much good if a piece of rebar

falls, you know, falls on them.

She told me that they believe in inshala which means God willing if they are going to get hurt or not going to get hurt.

Mr. TIERNEY. Did the workers have access to safety equipment:

hard hats, protective eyewear, appropriate footwear? Was there access to those things?

Mr. OWENS. Yes, I believe they pretty much did, but we were

running out a lot. You know. A lot of guys would have to wait. It

would be ordered.

Mr. TIERNEY. Did you observe any injuries on the workplace?

Mr. OWENS. Yes.

Mr. TIERNEY. Would you tell me about that?

Mr. OWENS. I just seen guys falling through stacked rebar before

concrete pours, guys falling through it. There was one pretty bad

accident where a guy fell off of a building because he wasn’t roped

off properly, but he was already on the ground by the time I got

there.

Mr. TIERNEY. Mr. Owens, were you ever contacted by the State

Department Inspector General, Howard Krongard, regarding the

allegations that you have made on abusive labor practices by First

Kuwaiti?

Mr. OWENS. No.

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Mr. TIERNEY. Were you ever contacted by Deputy Inspector General William Todd?

Mr. OWENS. No.

Mr. TIERNEY. Were you ever contacted by anyone who identified

himself or herself as a staff member of the State Department Inspector General?

Mr. OWENS. No.

Mr. TIERNEY. Mr. Mayberry, were you ever contacted by the

State Department Inspector General, Howard Krongard, regarding

allegations that you have made about abusive labor practices by

First Kuwaiti?

Mr. MAYBERRY. No, sir.

Mr. TIERNEY. By Deputy Inspector General William Todd?

Mr. MAYBERRY. No, sir.

Mr. TIERNEY. By anyone identifying himself or herself as a staff

member of the State Department Inspector General?

Mr. MAYBERRY. No, sir.

Mr. TIERNEY. Have either of you been questioned by the Department of Justice with respect to their investigations?

Mr. MAYBERRY. Yes, sir.

Mr. TIERNEY. Mr. Owens.

Mr. OWENS. Yes. The Justice Department, yes.

Mr. TIERNEY. I notice that my time is expired.

Mr. Davis, you are recognized for 5 minutes.

Mr. DAVIS OF VIRGINIA. Well, thank you very much.

I want to thank both of you for your testimony.

Let me just ask you for the record. Did each of you write your

statement that you submitted this morning?

Mr. Owens.

Mr. OWENS. Yes, sir, I wrote it, but somebody spell checked it for

me.

Mr. DAVIS OF VIRGINIA. Mr. Mayberry.

Mr. MAYBERRY. I wrote my own, sir, and somebody spell-checked.

Mr. DAVIS OF VIRGINIA. Who was somebody? GAO?

Mr. MAYBERRY. Yes, sir.

Mr. DAVIS OF VIRGINIA. Because we have a document here saying

that a document came from GAO that was put in there.

That is all they did is spell check it?

Mr. MAYBERRY. Yes, sir.

Mr. DAVIS OF VIRGINIA. Let me ask you, Mr. Owens. Several

press articles report that you have a False Claims Act lawsuit

pending against First Kuwaiti, is this true?

Mr. OWENS. I am here today voluntarily to speak only about

human rights violations that I observed.

Mr. DAVIS OF VIRGINIA. And do you have a claim pending against

First Kuwaiti?

Mr. OWENS. I am sorry.

Mr. DAVIS OF VIRGINIA. You told the committee yesterday you

didn’t.

Mr. OWENS. I am sorry.

Mr. DAVIS OF VIRGINIA. You told the committee yesterday—let

me just finish. You told the staff yesterday that you did not. That

could be a false claim if, in fact, you have, but there have been

press reports that you do.

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I am asking you now under oath to clarify that if you would like

to. Otherwise, we will proceed accordingly.

Mr. OWENS. I am not legally permitted. No. I am.

Mr. DAVIS OF VIRGINIA. You are under oath.

Mr. OWENS. I am under oath, and I am legally prevented from

answering that question.

Mr. DAVIS OF VIRGINIA. Not before a congressional committee.

Mr. TIERNEY. The Chair acknowledges, Mr. Davis, that I believe

if there were such a suit, it would be a sealed suit. He probably

would not be able to talk about it.

Mr. DAVIS OF VIRGINIA. It wasn’t sealed in the Wall Street Journal when they reported it. I guess what is more disturbing is yesterday he told the committee he did not have anything pending. So

that could be a false claim, and we will explore that later.

How long were you in Iraq working for First Kuwaiti?

Mr. OWENS. Approximately 8 months, November 2005 through

June 2006.

Mr. DAVIS OF VIRGINIA. In your written statement, you said ‘‘I

felt so bad that I just realized I had to speak up.’’

If, in fact, you have a lawsuit coming against First Kuwaiti—

which I think we can assume we have because if it is a sealed

order obviously you do—wouldn’t you say that publicly smearing

the defendant is also to your monetary advantage? Wouldn’t it be?

Mr. OWENS. I am legally prevented from answering that question.

Mr. DAVIS OF VIRGINIA. I think we get the picture.

How many flights did you take over to Baghdad?

Mr. OWENS. How many flights?

Mr. DAVIS OF VIRGINIA. Yes.

Mr. OWENS. I believe four.

Mr. DAVIS OF VIRGINIA. How many of those flights did you notice

the problem with the boarding passes saying Dubai?

Mr. OWENS. One.

Mr. DAVIS OF VIRGINIA. The State IG’s limited review of the conditions at the Baghdad Embassy did not have the same assessment

that you did. The Inspector General, the independent Inspector

General, did not have the same assessment regarding human trafficking that you did.

Have you read the State IG’s report?

Mr. OWENS. Yes, I looked at it.

Mr. DAVIS OF VIRGINIA. What is your reaction to it?

Mr. OWENS. As far as the trafficking?

Mr. DAVIS OF VIRGINIA. Yes, also in terms of people living in the

trailers and being cramped and everything else.

Mr. OWENS. OK. As far as the trafficking, I only can tell you that

I just told you what I saw on that particular flight.

As far as the work, the conditions of the people working, I can

only tell you what I saw while I was there. He came later. I don’t

know. I wasn’t.

Mr. DAVIS OF VIRGINIA. So it might have been cleared up, OK.

Now if I understand correctly, you are currently residing in Cambodia.

Mr. OWENS. That is correct.

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Mr. DAVIS OF VIRGINIA. And that you were there at the start of

the week.

Mr. OWENS. Yes, sir.

Mr. DAVIS OF VIRGINIA. Who paid for your travel here today? The

taxpayers?

Mr. OWENS. Yes.

Mr. DAVIS OF VIRGINIA. Have you had any problems relating to

your security clearance with the U.S. Government?

Mr. OWENS. Not to my knowledge.

Mr. DAVIS OF VIRGINIA. Was your security clearance valid when

you signed a contract to work at First Kuwaiti?

Mr. OWENS. As far as I know, yes.

Mr. DAVIS OF VIRGINIA. Who was sponsoring your clearance?

Mr. OWENS. Hardline Installation.

Mr. DAVIS OF VIRGINIA. When you signed a contract with First

Kuwaiti, were you also under contract to work for another company?

Mr. OWENS. When I finished the Embassy in Cambodia, I signed

a contingent offer to go to Nicaragua and work on the Embassy

there. That job got construction delays. So I e-mailed Nicaragua

and told them I can’t wait until you are ready for me, and then I

went to Iraq.

Mr. DAVIS OF VIRGINIA. Did First Kuwaiti ever complain to you

about your job performance such as drinking on the job or being

late for work?

Mr. OWENS. No.

Mr. DAVIS OF VIRGINIA. You never had any complaints? Did you

know that you were being destined for Iraq on that plane?

Mr. OWENS. Yes, I did.

Mr. DAVIS OF VIRGINIA. OK.

Do you know whether those other employees signed documents

indicating that Iraq was their destination or not? Do you have any

knowledge of that?

Mr. OWENS. I just saw their boarding passes were for Dubai.

Mr. DAVIS OF VIRGINIA. Let me just say I see my time is up.

I just want to note one thing on Mr. Mayberry, that he is a previous whistleblower on another case against KBR who testified

here earlier today. So he is an experienced whistleblower, and I

know that he will look forward to our questions.

Thank you.

Mr. TIERNEY. That would be to drive home the point that he

doesn’t want to tolerate bad things that are happening, I guess.

Ms. Watson, you are recognized for 5 minutes.

Mr. DAVIS OF VIRGINIA. No, just that he is experienced, and the

record speaks for itself. That is what it is about.

Mr. TIERNEY. Ms. Watson is recognized for 5 minutes.

Mr. ISSA. Mr. Chairman, could we have regular order, please?

Ms. WATSON. If I may, please, I believe this is my time. Thank

you.

I want to thank these two gentlemen for coming here. There is

no intent on our part to abuse you or to give you leading statements. I would hope that you would be straightforward when we

raise these questions and not feel intimidated. That is not our intent.

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The way I do it, I try to get to the truth. If something that I ask

you is misleading or you don’t understand it, ask me to clarify it.

I don’t intend to have you make statements that you wouldn’t

make under other circumstances. I just want to set the ground

rules.

I am going to direct this to Mr. Mayberry. I have been reading

through some background information, and it seems like the safety

conditions and standards where you were working within the

Green Zone were not what we would require on other jobs. True

or not true?

Mr. MAYBERRY. True.

Ms. WATSON. Was there an incident of a gentleman that was just

described up on a high bar without safety equipment, he fell and

broke his back?

Mr. MAYBERRY. No, ma’am, he didn’t. This gentleman didn’t

break his back.

When I had seen him up on the scaffolding, he had no harnesses

on at all, and I had noticed that he was kind of dancing around

and having fun, and that is when I had started yelling and screaming to get him off of the site and off of the scaffolding because he

had no harness. It is not a place to play.

It took about 10 minutes. Once they got him on the ground is

when I found out he was intoxicated. The intoxication that he had,

he had a pocket of some sort of painkiller that he got from the clinic, and that is what he was taking. I couldn’t find a translator to

get the full story of why he was taking it or what the pain was

being treated for.

I talked to First Kuwaiti management in regards to this gentleman, and they said, put him back on the site and tell his foreman to work him somewhere else.

Ms. WATSON. Now let me just ask you, the project was being

managed by First Kuwaiti?

Mr. MAYBERRY. Yes, ma’am.

Ms. WATSON. Mary Francis was the overseer?

Mr. MAYBERRY. It was my understanding that Mary French was

the Embassy project manager over the whole facility.

Ms. WATSON. I see.

Who was she employed by? The U.S. Embassy?

Mr. MAYBERRY. The State Department.

Ms. WATSON. So she was to oversee. The employer was First Kuwaiti?

Mr. MAYBERRY. Yes, ma’am.

Ms. WATSON. All right. Who was directly responsible for the

health and the safety of the employees on the project?

Mr. MAYBERRY. First Kuwaiti.

Ms. WATSON. I see.

First Kuwaiti has personnel there on the project?

Mr. MAYBERRY. Yes, ma’am.

Ms. WATSON. That would be Mary French.

Mr. MAYBERRY. I don’t know the relationship with Mary French

and First Kuwaiti. All I know is I was introduced to Mary French

of the State Department. She wanted me to work for her. Once I

got on to meet with the First Kuwaiti people, they informed me I

was to work for him.

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So I, in turn, sent e-mail stateside to find out exactly what the

contract stated as and which company I was actually working for.

Ms. WATSON. Who would you say was responsible for the health

and the safety of those employees?

Mr. MAYBERRY. That would be First Kuwaiti.

Ms. WATSON. I see. Now were their employees Kuwaitis?

Mr. OWENS. No, ma’am.

Ms. WATSON. Who were their supervisors, their overseers?

Mr. OWENS. The management staff of First Kuwaiti. All of the

ones that I worked with were Lebanese.

Ms. WATSON. I see.

Mr. Owens, Mr. Mayberry, is it true that the workers on the

project were denied access to the PX or the BX?

Mr. OWENS. That is correct.

Ms. WATSON. I see. Is it true that they could not go in there and

get medications for whatever was ailing them? Whichever one.

Mr. OWENS. That is correct.

Ms. WATSON. Was this issue ever taken to Mary French?

Mr. OWENS. Yes.

Ms. WATSON. What did Mary French do about it when there were

injuries, scratches, cuts and so on? What did she do about that, not

allowing them to go into the PX?

Mr. OWENS. She didn’t do anything.

Mr. TIERNEY. Thank you, Ms. Watson. Your time is expired.

Ms. WATSON. Thank you.

Mr. Issa, you are recognized for 5 minutes.

Mr. ISSA. Mr. Mayberry, apparently, this isn’t the first time you

have been in front of us. On June 13, 2005, you were in front of

the Senate’s all-Democrat Policy Committee, is that true?

Mr. MAYBERRY. Yes, sir.

Mr. ISSA. At that time, oddly enough, you were, I would say vilifying, but I will use the term, speaking about failures of KBR, a

division of Halliburton, is that right?

Mr. MAYBERRY. Correct.

Mr. ISSA. In this previous employment, when you were hired by

a division of Halliburton, KBR who testified immediately before

you as skilled contractors which they are, you went on for a very

long time talking about many of the same things that are going on

here today, isn’t that true?

Mr. MAYBERRY. No, it is not.

Mr. ISSA. So when you talked about they were supposed to feed

Turkish and Filipino meals but they didn’t, they were supposed to

pay something but they didn’t, isn’t that somewhat similar to what

we are talking about today?

Mr. MAYBERRY. No, sir, not at all.

Mr. ISSA. When you were talking about KBR in 2004, you were

talking about a really good company that was doing their job and

respecting the taxpayers’ money, right?

Mr. MAYBERRY. Sir, I did not hear the beginning of that through

the noise.

Mr. ISSA. What I am understanding is you are a professional

whistleblower. This is not the first time that you have taken a job

for a relatively short period of time and then come talked to Congress about what you have seen.

101

If this is such a bad place and there are so many abuses, is there

a particular reason you keep coming back to these employers?

Mr. MAYBERRY. Well, first let me address your—

Mr. ISSA. No, no. Answer my question. My time is very limited

here.

Mr. MAYBERRY. No, sir.

Mr. TIERNEY. Mr. Issa, if you can’t ask the witness a question,

then kindly give him the courtesy of letting him answer.

Mr. ISSA. Mr. Chairman, this is my time in regular order.

Mr. TIERNEY. Try to use questions and answers then, please.

Mr. ISSA. Mr. Chairman, if he would answer my question.

I asked if this was the first time. You said it wasn’t.

I asked if you are a professional whistleblower. You started answering another question.

Because you weren’t responsive, I asked why do you keep taking

jobs in Iraq if in fact all you seem to observe is a very dangerous

place.

Would you answer just that question, why you keep taking jobs

in Iraq if it is such a bad place in which contractors do terrible

things? Is that for the purpose of whistleblowing or is that for the

purpose of receiving a payroll and doing a good job, which is it?

Mr. MAYBERRY. It is in regards to supporting the United States

and my armed forces is why I take contracts into Iraq.

Mr. ISSA. OK. Thank you very much. I appreciate the answer

that you go back to Iraq out of patriotism to work for contractors.

How much were you paid when you worked for KBR? What was

your annual salary?

Mr. MAYBERRY. I am legally prevented from answering that

question.

Mr. ISSA. Mr. Chairman, could you instruct that telling what

your salary was there is not a legal restriction as far as I know?

Mr. TIERNEY. The witness will make that determination.

Mr. ISSA. OK. The witness is refusing to answer.

Mr. TIERNEY. I think we recorded the witness—

Mr. ISSA. Mr. Chairman, this is my time. Thank you.

Mr. Owens, I am a little concerned. I am going to ask you a question that I think you were asked, but I am going to give you one

more chance to answer.

Yesterday, did you tell the staff, bipartisan staff, when they

asked the question of were you in fact in litigation, you said no. Is

that true, yesterday?

I am not asking about today or whether it is true, but did you

say that yesterday?

Mr. OWENS. Here, under oath, I am legally prevented from answering that question.

Mr. ISSA. So, Mr. Owens, are you saying that you are legally prevented from answering the question about what you said yesterday

to congressional staff?

Mr. OWENS. Here, under oath, I am legally prevented from answering that question.

Mr. ISSA. Mr. Owens, are you taking your rights under the fifth

amendment? Are you asserting your rights to protect yourself from

incrimination here today?

Mr. OWENS. As far as the fifth amendment, no.

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Mr. ISSA. You are not? You are not.

So you are not refusing to answer to protect yourself from any

false statement you may have made yesterday?

Mr. OWENS. I have made no false statements under oath.

Mr. ISSA. Mr. Chairman, I would like to ask that the witness be

subpoenaed to be compelled to answer the question as to what he

said to our staff yesterday relative to what he is refusing to answer

today. I think that is a reasonable request, and I would ask the

Chair to entertain that.

Chairman WAXMAN [presiding]. As I understand it, the witness

is under an order because of a sealed court case not to talk about

the litigation, is that the understanding?

Mr. OWENS. I am legally prevented from answering that question.

Mr. ISSA. Mr. Chairman, my request for the subpoena is as to

what he said to our staff on a bipartisan basis yesterday, not what

he is prevented from saying but what he may have said yesterday

because otherwise I think we have to bring our staff in front of us

to determine whether or not there is a truthful answer or not. That

is all I am asking for.

We do have an obligation to find out whether the witnesses’

other testimony is likely to be truthful based on whether they said

truthful things to our own staff on a bipartisan basis.

Chairman WAXMAN. Well, I will take it under submission. I am

not prepared to accept your recommendation.

Mr. ISSA. I appreciate that. If I could just reclaim the time I

would have had, I will be very brief.

Mr. Owens, you and Mr. Mayberry both said that you only had

your testimony here today, to the ranking member, you said that

it was only for spell check, is that correct?

Mr. OWENS. Yes. I wrote it out, and they checked it for me.

Mr. ISSA. When GAO reports to us that they worked with the

witnesses, it implies to me that you had conversations or correspondence or discussed what was going to be in your statement

in preparation for making it. Is that true?

In other words, you had conversations about what would be in

your statement or some other communication before you wrote it,

before they spell-checked it. Is that the correct order?

Mr. OWENS. I answered questions that they asked me.

Mr. ISSA. But we are talking about your opening statement for

both of you. Did you write your opening statement without ever

talking to GAO or did you operate in an environment in which you

had discussions with Government officials, wrote your statements

and then they spell-checked them?

Mr. MAYBERRY. Could I address this?

Mr. ISSA. Yes, Mr. Mayberry.

Mr. MAYBERRY. Thank you.

We were instructed that we needed statements wrote. We wrote

those statements once we left the meetings yesterday. We started

on those statements.

Mine was completed and forwarded to an e-mail address that I

was provided which was Andrew Wright and David Turk. They

both had my statement prior to being contacted again by the gentleman, David Turk, that he had somebody that could be a third

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party and look at my statement and spell check it and punctuate

the statement.

Mr. ISSA. I appreciate that.

Thank you, Mr. Chairman. I believe that it has been clear that

there was a meeting, then a statement, then a spell check.

I yield back.

Chairman WAXMAN. The gentleman’s time has expired.

The Chair now recognizes Ms. McCollum.

Ms. MCCOLLUM. Thank you, Mr. Chair.

Mr. Owens, where were you born?

Mr. OWENS. Long Island, NY.

Ms. MCCOLLUM. You were a product of the school system there.

You are a proud American. I am assuming that you, like Mr.

Mayberry, as a U.S. citizen, went forward to do this job and work

on other embassies. Why? It is dangerous work, and it is work that

takes you away from those you love.

Mr. OWENS. I like working on U.S. embassies. It is interesting

the way they are built, and I enjoy construction work.

Ms. MCCOLLUM. I appreciate your doing that.

Mr. Mayberry, you said that you felt that this was a way in

which as a U.S. citizen—I am paraphrasing so please correct me

if I am wrong—that you were giving back to our country by doing

the job that you were doing.

Mr. MAYBERRY. Yes, ma’am.

Ms. MCCOLLUM. As American citizens, as people who are proud

of this country and knowing that this is a U.S. Embassy facility

that is being built, it appears to me, Mr. Owens, that you were

quite alarmed when you found out that there were individuals on

the plane, coming to work on a U.S. Embassy, something that you

were very proud of doing, that had no idea what their destination

was going to be. In fact, they thought it was a very different destination.

How did that make you feel as an American?

Mr. OWENS. On that plane ride, hardly nobody spoke any

English. I don’t know what those guys were thinking. Like I said,

they had boarding passes for Dubai. I don’t even know if they could

have read those boarding passes.

I don’t know, but all I can say is they looked very confused the

whole time I saw them, and it bothered me a little bit. It just kind

of made me feel bad because I think some of those guys were really

scared once they found out where they were.

Ms. MCCOLLUM. Mr. Owens, did you see any of them after you

were on the ground on the site, the individuals you were on the

plane with?

Mr. OWENS. Yes. I made friends. There were two boys from Sierra Leone on the plane, and I had worked in West Africa before.

So we had a lot in common to talk about, and I made friends with

them, and I saw them onsite after.

Ms. MCCOLLUM. Did they know that they were coming to Baghdad?

Mr. OWENS. The two Sierra Leoneans didn’t know they were

going to Baghdad, but they had boarding passes for Dubai.

Ms. MCCOLLUM. But they had boarding passes for Dubai.

Mr. OWENS. That is correct.

104

Ms. MCCOLLUM. In your encounters with any of the other individuals that were there, even though there were great language

barriers, were any expressing confusion that they were there in the

wrong place and that they needed to be some other place?

Mr. OWENS. I had heard that from a lot of people over there.

Whether it was the exact people on the plane, I don’t know.

It is not a nice thing to say when I say that they kind of look

alike, but they all dressed alike and their facial features. It would

have been hard for me to remember one from the plane ride and

see him in a crowd of 200 people and know that it was him.

Ms. MCCOLLUM. Mr. Owens, I really appreciate your honesty in

answering my questions.

Mr. Mayberry, what was your impression as an American, as a

citizen, for not only the way that you saw the workers being treated but for stories that you heard or things that you can tell us that

you witnessed about individuals feeling that they were all of a sudden in the wrong place at the wrong time?

Mr. MAYBERRY. I had seen the reaction on the airplane when the

captain came on board the PA system and stated that the plane

was headed to Baghdad. I witnessed the reaction in that airplane.

At that point, I was in fear for my own safety. No. 1, I was the

only American on that whole airplane. The captain and the crew

were not American, and the men on that airplane with me were

not American.

Once the men started getting upset and a weapon was pulled out

of that back closet in the tail of the airplane by First Kuwaiti’s

manager, that is when I got a little more jumpy and kind of stayed

to myself.

The fear in the faces that I seen was remarkable. I never want

to see it again.

Ms. MCCOLLUM. Thank you, Mr. Mayberry. I want to thank you

both as American citizens, people who are proud of the work that

you do for your country and when you see something that you

think is wrong, feel that in this country with freedom of speech and

freedom to speak your mind openly to your own Government, that

you felt like you were able to do that today.

I want to once again thank you very much for coming forward.

Mr. OWENS. Thank you.

Chairman WAXMAN. Thank you, Ms. McCollum.

The Chair wants to recognize himself for his 5 minutes and yield

to Mr. Tierney to ask some questions.

Mr. TIERNEY. Thank you, Mr. Chairman.

Mr. Chairman, I would just like to start by bringing you up. I

know you had to go to another hearing on a very important matter.

In your absence, because you came back in the middle of Mr.

Issa’s question, there was some discussion or inference from Mr.

Issa about one of the witnesses’ failures to comment on whether or

not there was a particular lawsuit or whether he said there was

a lawsuit.

If, in fact, there is what is commonly known as qui tam lawsuit

pending, if there is such a thing, it would be a sealed lawsuit as

I mentioned before and Mr. Issa well knew. I think in that case of

a sealed document, any party to that case would not be allowed to

talk about it in public.

105

I suggest that perhaps that we consult with the Department of

Justice just to make sure that is firm and then let all the members

of the panel know that so there won’t be any disagreement on that,

if that is acceptable to the chairman.

Mr. Mayberry, let me ask you when you were first hired.

Chairman WAXMAN. Will the gentleman yield?

Mr. TIERNEY. Sure, I yield

Chairman WAXMAN. Are you saying, in effect, that Mr. Issa was

aware of the fact that they couldn’t talk about this issue and then

he was trying to impeach them, knowing they couldn’t talk about

that issue?

Mr. TIERNEY. Well, I believe he was in the room when I clarified

that the first time. I would have to check with people on that. Assuming he was, then he would have known at least my comments.

Whether he agreed with it or accepted them or not is another

thing.

Chairman WAXMAN. The gentleman will proceed.

Mr. TIERNEY. Thank you.

Mr. Mayberry, you were hired by First Kuwaiti as a medic. Will

you tell us what you know or let us know a bit about the medical

facilities that were available to workers when you arrived at the

Embassy site?

Mr. MAYBERRY. When I arrived at the Embassy site, the medical

clinics, they looked more like a break area. They were filthy inside.

There were beds in there and gentlemen laying on them and sleeping on them.

On the reception counter, coming into the clinic, were all these

little blister packs with different colors of medication in them, and

I asked what they were. One of the Indian medics that spoke a little bit of English stated that it was the medication that they use.

I went over to the second medical facility which was on the

constructionsite and found the same there.

So at that time, I had a meeting that afternoon with Mary

French of the State Department. She had asked me what my first

look around the camp was, and that is when I had started talking

to her about the lack of supplies, band-aids. The day I got on camp,

they were using paper towels and toilet paper and duct tape as

bandages.

So I talked to her about the supplies, and she had stated that

it was First Kuwaiti’s responsibility. I went to First Kuwaiti and

asked for supplies, and they said they don’t have any.

I, in turn, turned to the military for assistance, and at the time

the military provided me with eight jump packs which are very

close to emergency room quality. Two of them were supplied to the

State Department, two of them for each clinic and one per ambulance, counted for all eight bags.

Now when I got into Kuwait, the medical equipment and supplies would have been a whole different story if I had gotten my

luggage. My luggage was happily camped out in Dubai with the

airplane that I was supposed to be on.

Mr. TIERNEY. Did you make a report to the Department of Defense and the Human Trafficking Office in the State Department

about the condition of the medical facilities?

106

Mr. MAYBERRY. Sir, my report was filed with the State Department, Mary French. It was filed with First Kuwaiti management.

It was also filed through the medical facility in Baghdad. The medical facility in Baghdad sent it up a chain of several offers to a

State Department doctor.

Mr. TIERNEY. When was it that you were making these observations, what month and what year?

Mr. MAYBERRY. March 2006.

Mr. TIERNEY. Now in September, September 18, 2006, a contract

modification was added to the First Kuwaiti contract dealing with

medical services. It added $1.375 million to the contract. The provision noted that these extra funds were to pay for ‘‘a medical trailer,

all medical instruments, doctor, dentist, eight nurses, two ambulance teams, cleaning services for the medical facilities and

consumables.’’

I guess we can infer from the existing medical facilities and staff

prior to that contract modification, that there may have been a difference.

Did what I just describe in that contract modification comport

with what you saw in March 2006? Was that the condition of the

facilities?

Eight nurses, two ambulances, a doctor, medical instruments,

medical trailer, cleaning services, consumables, were all those

things in good condition when you were there in March 2006?

Mr. MAYBERRY. To be honest with you, sir, the only thing that

was in good condition at those clinics was the Indian nurses.

Mr. TIERNEY. Thank you. I yield back.

Chairman WAXMAN. The gentleman’s time is expired.

Ms. Watson.

Ms. WATSON. I don’t understand the use of the term, professional

whistleblower, and to accuse our witnesses of being professional

whistleblowers is an inference to doing this for professional gain.

Let me ask Mr. Owens and Mr. Mayberry. Was your motivation

professional monetary gain when you reported what you saw were

misdeeds, what you saw were violations of codes, what you saw

was maltreatment, Mr. Owens?

Mr. OWENS. I have never done anything like this before, you

know, testify against anybody for anything.

Mr. TIERNEY [presiding]. Ms. Watson, I am going to take the liberty of interrupting you only because we are not doing multiple

rounds.

Ms. WATSON. Why was I called on?

Mr. TIERNEY. It is not your fault. With Mr. Waxman coming back

and forth, we prefer that you would not.

Ms. WATSON. Well, can they answer my question, please? Thank

you.

Mr. TIERNEY. I think he just did.

Ms. WATSON. Well, Mr. Mayberry.

Mr. TIERNEY. I am sorry. You were distracted. He said he has

never done anything like that before.

So thank you.

I want to thank both of our witnesses for being here and testifying today. I know it was not an easy thing to do. I appreciate the

107

distances that you have traveled and the sacrifices that you have

made.

We will take about a minute break here in recess, we will the

next panel come on directly afterwards. Thank you.

Mr. OWENS. Thank you, sir.

Mr. ISSA. Mr. Chairman, I just want to be recognized to ask that

our staff be provided with the original documents in addition to the

printed statements so that we can compare the original documents

submitted to the Democrats with those that were in fact the final

copies. That would be normally within our rules. Could I ask that

those be granted as soon as they are available?

Mr. TIERNEY. We will certainly take a look at that request.

Mr. ISSA. Thank you very much, Mr. Chairman.

[Recess.]

Mr. TIERNEY. The committee and subcommittee will now hear

testimony from our final panel.

I want to thank you all for your patience in waiting.

Mr. Kennedy, I keep seeing you with different hats on.

Mr. KENNEDY. It is always a pleasure to see you, Mr. Chairman.

Mr. TIERNEY. I take it you have moved?

Mr. KENNEDY. Yes, sir. I departed the Director of National Intelligence. I am now Director of Management Policy at the State Department.

Mr. TIERNEY. I just thought there were like 8,000 Patrick Kennedys out there. I wasn’t sure.

I want to introduce our next panel of witnesses here to offer information about First Kuwaiti’s labor practices.

They are: Major General, retired, Charles E. Williams, who is the

Director, Office of Overseas Building Operations, U.S. State Department; Ambassador Patrick Kennedy, Director, Office of Management Policy, U.S. State Department; Mr. William Moser, Deputy Assistant Secretary for Acquisitions, U.S. Department of State;

and Mr. Howard J. Krongard, Inspector General, U.S. Department

of State.

I want to thank you all for your service to our country.

I want to also indicate that your full witness statements will be

entered onto the record and the transcript of this briefing. We ask

that you try to summarize that as best you can within the 5-minutes. We will try to be a little lenient but appreciate that you will

try to stay as close within that limit as you can.

It is the policy of the committee and the subcommittee to swear

witnesses before they testify.

[Witnesses sworn.]

Mr. TIERNEY. The record will please indicate that the witnesses

have answered in the affirmative.

Again, I am going to ask that you please keep your opening

statement as close as you can to the 5-minutes on that.

General Williams, perhaps you would care to start us.

Mr. Moser, I think we put the name plates out different, But

General Williams, if you want to start, then we will go from there.

108

STATEMENTS OF MAJOR GENERAL, RETIRED, CHARLES E.

WILLIAMS, DIRECTOR, OFFICE OF OVERSEAS BUILDING OPERATIONS, U.S. DEPARTMENT OF STATE; WILLIAM MOSER,

DEPUTY ASSISTANT SECRETARY FOR ACQUISITIONS, U.S.

DEPARTMENT OF STATE; PATRICK KENNEDY, DIRECTOR,

OFFICE OF MANAGEMENT POLICY, U.S. DEPARTMENT OF

STATE; AND HOWARD J. KRONGARD, INSPECTOR GENERAL,

U.S. DEPARTMENT OF STATE

STATEMENT OF MAJOR GENERAL, RETIRED, CHARLES E.

WILLIAMS

General WILLIAMS. Mr. Chairman, thank you and committee

members. I am honored to be here to discuss the State Department’s diplomatic construction project in Baghdad.

I have a prepared written testimony, and I have asked the committee and it has agreed that it be entered into the record.

I would like to begin today by putting the Baghdad project into

the context of our larger Overseas Building Operations program. It

has been my privilege to come out of retirement and serve as the

OBO, Director of the Overseas Building Operations for the past 61⁄2

years.

Before coming to OBO, I worked in the private sector and served

29 years in the U.S. Army and the Army Corps of Engineers. My

career spans in the construction field over 40 years.

In 2001, when I became the Director of OBO, the Department

was building on an average of one Embassy per year. In 2006, OBO

opened 14 new facilities. Our goal this year is to open 16.

Our new Embassy compounds are multi buildings, state-of-theart facilities, meeting the highest security standards for environmental energy and efficiency.

My written testimony states that since 2001, with strong support

from the Congress, OBO has completed 47 facilities. We have

moved 12,566 U.S. Government employees out of harm’s way by

providing safe, secure and functional facilities, many located in the

most dangerous parts of the world.

In fact, since my written statement was submitted, updated

numbers show that we have as of today completed 50 of these new

facilities. We have had three more reach completion since we started this process.

We currently have 31 additional facilities under management.

OBO’s construction portfolio today is valued at over $5 billion.

OBO has revolutionized its management approach with an emphasis on discipline, accountability, results, transparency and

credibility. In order to replace the 190 aging and unsecured Embassy facilities, OBO reorganized and streamlined the planning, design and construction processes.

We engage often with the construction industry through our

award-winning industry advisor panel and our contractor partners.

We have a true alliance with the GAO and, in 2006, GAO found

that OBO had reduced the time to construct new facilities by 2

years and 9 months from the 1980’s and 1990’s.

We have also achieved a high degree of worker safety. In fiscal

year 2006, the OBO accident rate was only 6 percent of the OSHA

rate.

109

Mr. Chairman, now I turn to the new Embassy in Iraq which is

among the most challenging projects that we have undertaken.

In 2005, Congress appropriated $592 million for this project. We

plan to finish the project in 24 months, a timeframe consistent with

the commitments we made to the host government. OBO established an office with the sole responsibility for executing the Baghdad project and briefed the concept to the Congress.

The compound contains 24 buildings and occupies 65 acres of the

104 acre site. The Baghdad NEC, new Embassy compound—that is

NEC—is not luxurious. Its offices and housing are equivalent to

other new construction around the world.

The project is on schedule. It is at budget with completion slated

for this September.

As to quality, OBO is proud of its employees’ and contractors’

work on this project. We have received numerous accolades from

our tenants as to the extremely high quality of construction. It is

among the best that OBO has managed.

The Baghdad NEC, as with all of our new Embassy compounds,

will undergo a standard accreditation process to ensure that the facility meets all applicable safety and security standards prior to occupancy.

A punch list will most likely be generated consisting of items

needing small corrections and modifications. A punch list is a routine feature of every building project whether you are dealing with

a small remodeling project to your home or constructing a major

building. For each new Embassy compound project, OBO aligns

with the contractor to address these punch list items in an orderly

manner.

Mr. Chairman, I would like to turn next to the temporary local

guard camp. The camp consists of—

Mr. TIERNEY. Major General, since your comments are already on

the record, I would add that you go proceed but try to wrap it up

as best you can in the summary.

General WILLIAMS. I will do that.

Mr. TIERNEY. Thank you, sir.

General WILLIAMS. OK. The camp consists of prefabricated trailers where the local employees who supply guard service will reside.

The issue of installing a temporary camp on some of the remaining 104 acres came up about 12 months after we were under construction for the new Embassy compound. We had a very ambitious

period of 4 months to do this.

We encountered 70 days of road closures. Obviously, trailers having to be brought one on a truck at a time, we had 2 months delay.

So this is what has caused the project not to be delivered when it

was promised.

Let me conclude with the emphasis that the responsibility of

OBO is to build facilities that are required to our diplomatic standards and requirements overseas. We follow the direction of the Department on staffing numbers and requirements and build accordingly.

110

I want to re-emphasize that the Baghdad new Embassy compound will meet standards, will be completed on schedule and

within budget.

I would be pleased now to respond to your questions.

Thank you very much, Mr. Chair

[The prepared statement of General Williams follows:]

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Mr. TIERNEY. Thank you, General.

Ambassador Kennedy, would you care to give your remarks?

STATEMENT OF PATRICK KENNEDY

Mr. KENNEDY. Thank you very much, Mr. Chairman, members of

the committee. Thank you for giving me the opportunity to testify

before you today.

I first want to offer you a brief perspective of someone who has

served in Baghdad, and I also want to emphasize the importance

of the new Embassy compound for the safety of our employees

there.

I recently became Director of the Office of Management Policy in

the State Department. As one of my key duties, I have been

charged by the Secretary, the Deputy Secretary and the Under Secretary for Management with ensuring that Ambassador Ryan

Crocker has everything he needs within reason in terms of support

of management.

Now let me turn briefly to the subject of this hearing.

I want to underline the distinction made by General Williams between the guard camp project in Baghdad and the new Embassy

project. They are completely separate, both physically and contractually. The camp is temporary and largely a trailer park while the

NEC is a group of permanent structures.

I have been recently in Baghdad and also communicate regularly

with Ambassador Crocker. I have been meeting regularly also with

Chuck Williams. There is a quality assurance process in place, and

there will be a vigorous inspection procedure prior to our acceptance of the NEC as there is for all our new Embassy compounds.

On the guard camp, I view the exchange of cables between the

Embassy and OBO as part of the creative tension that exists in

getting any project right. There have been problems, but they are

problems that First Kuwaiti is fixing as part of their acceptance of

the guard camp, our acceptance of the guard camp. This is a standard punch list procedure that occurs on any construction project.

Mr. Chairman, that concludes my statement. I am at your disposal for questions.

[The prepared statement of Mr. Kennedy follows:]

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Mr. TIERNEY. Thank you, Ambassador.

Mr. Moser.

Mr. MOSER. I do not have a statement, Mr. Chairman.

Mr. TIERNEY. Mr. Krongard.

STATEMENT OF HOWARD J. KRONGARD

Mr. KRONGARD. Thank you, Mr. Chairman, ranking member and

thanks to all of you for inviting me to discuss the Department of

State Office of Inspector General’s memorandum on its review of

the construction workers camp at the new Embassy compound in

Baghdad which I will refer to as the NEC, the new Embassy compound.

I personally have made two visits to the NEC constructionsite.

The first visit was in November 2005. That visit to the NEC was

a routine part of my trip to Baghdad and was not prompted by any

specific allegations of wrongdoing.

I walked and rode through most of the site including the camp

which housed the construction workers, and I spoke randomly with

members of the work force which consisted of many different nationalities. Nothing came to my attention during that visit, evidencing any trafficking in persons violations or human rights

abuses.

In the months following my visit, various allegations came to my

attention regarding abuses and misconduct at the NEC including

ones having to do with food, passports, entry into Iraq, pay, physical abuse, living facilities and medical facilities. Therefore, in June

2006, I contacted the Multi-National Force-Iraq Inspector General

who had previously done inspections of conditions in camps in Iraq,

and I proposed that we conduct a joint review of the construction

workers camp at the NEC.

At that time, we agreed to conduct the review together onsite in

August 2006. Because MNF-I IG had experience in inspecting life

support areas across Iraq and was planning to conduct a large

number of such inspections, we agreed to use the work plan suggested by them. In mid-July, however, MNF-I IG was required to

postpone the review indefinitely due to other higher priority matters.

I, however, believed the allegations warranted an early review in

spite of this delay. So the Deputy Inspector General and I traveled

to Iraq in early September and carried out a review according to

the work plan suggested by MNF-I IG for a review focused on trafficking in persons and the fair and ethical treatment of a foreign

work force.

It is important to note that the review was conducted in a necessarily limited scope. It did not constitute an audit. It consisted

essentially of agreed upon procedures or limited procedures and

was designed to provide negative assurance rather than attestation.

The review included interviews with senior State Department officials and contracting authorities in both the United States and

Baghdad, private interviews with workers of at least four nationalities, physical review of the entire NEC site including kitchen and

dining facilities, medical clinic, recreational facilities, computer

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cafe, telephone access areas, commissary, management offices and

other areas.

It included inspection of the private living quarters of each

interviewee and numerous other workers randomly selected, inspection of the various group facilities such as shower and lavatory,

barbecue, religious, recreation and sport areas, and questions

asked of workers we randomly encountered during the physical inspection.

A summary of the responses received from the workers interviewed and the results of the physical inspection are set forth in

the memorandum which is attached to my statement which has

been publicly available for several months.

Because my review was limited, I continued to seek additional

inspection from MNF–1 IG.

While that inspection was being scheduled, the management

counselor and at least four other senior officials from the Embassy,

including the regional medical officer and I believe the assistant regional security officer, visited the workers camp, provided observations that are included in the memorandum and reported that in

general the camp was adequate for its purposes and the basic

needs of food, housing and sanitation were being met.

On two separate occasions in December 2006, an MNF-I IG team

also inspected the camp. MNF-I IG’s procedures and experience

were significantly more extensive than my own. MNF-I IG found

no evidence indicating the presence of severe forms of trafficking.

After setting forth their inspections results, MNF-I IG concluded

that except for recruitment fees illegal in some workers’ country of

origin, there was no evidence of trafficking in persons violations

and of the 58 areas inspected by MNF-I IG across Iraq, the NEC

camp was rated in the top third with above average quality of life

conditions. A copy of MNF-I IG’s report to me was appended to the

memorandum as well.

Based on all of the foregoing—including my November 2005 visit,

our September 2006 review, management’s visit in November 2006

and MNF-I IG’s two inspections in December 2006—nothing came

to our attention that caused us to believe that trafficking in persons violations or violations of the type I mentioned at the outset

here today and in the memorandum occurred at the construction

workers camp at the new Embassy compound.

At the appropriate time, I will be pleased to answer your questions. Thank you.

[The prepared statement of Mr. Krongard follows:]

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Mr. TIERNEY. Thank you very much, Mr. Krongard.

Mr. Platts, you are recognized for 5 minutes for questioning.

Mr. PLATTS. Thank you, Mr. Chairman. I appreciate your hosting

this hearing.

I appreciate all of our witnesses for your testimony, and I apologize coming in midway through.

General Williams, you may have addressed this as I came in, but

just to reiterate if you did or to clarify. The current project, as far

as being on time and on budget, where do we stand on the time

and budgeting?

General WILLIAMS. Thank you, Mr. Platts, for that question.

We are at 96 percent complete. We are in the pre-accreditation

phase. We are on schedule to deliver in September as planned at

the budget.

Mr. PLATTS. What was the last part? At the budget?

General WILLIAMS. At budget which is $592 million from a supplemental appropriation.

Mr. PLATTS. I understand there is a number of contracts that relate to this complete project. Any of those are the cost type contracts?

General WILLIAMS. We have no cost-plus contracts, Congressman, because we have experienced that we have done 50 of these

around the world over these last 6 years. We cannot control the

costs in these very difficult places, particularly in a war zone, unless we use a firm fixed-price. This is a firm fixed-price contract.

Mr. PLATTS. That has become the norm now.

General WILLIAMS. That has become the norm, and our appropriators who support us here in the Congress concur in that and desire that.

Mr. PLATTS. Of the contracts, there is one or more that are sole

source contracts?

Mr. MOSER. There are actually two contracts that are sole source.

The chancery compound for the construction of the unclassified

areas of the chancery were sole source. That was done only after

a competition produced no viable bidders. In other words, it was

subsequent to the competition.

The guard man camp that we discussed earlier today was also

sole source, but that was done for the reasons in order to get a

camp stood up as soon as possible so that guards could occupy a

suitable facility and provide security to the facilities on the ground

in Baghdad.

Mr. PLATTS. Part of that basis for doing a sole source is if there

is an urgent need.

Mr. MOSER. This one was done. The guard camp was done on the

basis of urgent and compelling reasons.

Mr. PLATTS. Who reviewed and approved those being sole source.

Mr. MOSER. The actual sole source justification was signed by

Gregory Starr who is the head of the diplomatic security services.

I think at that time he was one of the deputy assistant secretaries,

deputy assistant secretaries in diplomatic security. It was reviewed

by our attorney, our Acquisitions Attorney, Dennis Gallagher, and

it was further reviewed by the head of the contracting authority

who was part of my staff and that is Cathy Reed.

Mr. PLATTS. OK.

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Mr. Chairman, I am going to yield the balance of my time to Mr.

Issa. Thank you.

General WILLIAMS. Thank you.

Mr. ISSA. I thank the gentleman.

General Williams, this is the first time we have gotten to be together in this role, and I just want to commend you for your 6

years, certainly all your years of service but 6 years in which I

have watched you turn around what was a national disgrace.

The fact that we couldn’t build safe embassies, have them delivered on time and certainly not on budget, you have changed all

that. Whether it is the new center in Lebanon, I am not talking

about the new Embassy but the visa center that you stood up there

on time and when no one else had been able to do it in a decade.

So you have made a great deal of progress.

I just want to—Mr. Platts, actually finishing our question—having you take reference to the oversight and reform where it says

allegations of waste, fraud and abuse in the U.S. Embassy in Iraq.

Now as a matter of just pure fairness, is there any waste, fraud

or abuse in the construction of the U.S. Embassy in Iraq when it

is coming in on time and on budget?

General WILLIAMS. Congressman, in my opinion, no. I travel all

over the country, all over this world, 174 trips. I am in and out of

Iraq.

This project is going to be good quality. It is going to be accredited, and it is going to function. It is going to come in at or below

the $592 million, and we are going to be on schedule.

Mr. ISSA. I thank you, and I just want to point out that $592 million is about what we are spending to be 2 or 3, actually 4 years

late putting in something here at the House of Representatives. It

is amazing that we can’t find a way to build something right here

in the shadow of the Capitol and come in on time and under budget.

Just the opposite, we are double the time and double the budget

and, by the way, although Washington is not the safest city, no one

is going to call it Baghdad.

Thank you. I yield back.

Mr. TIERNEY. The gentleman yields back.

Ms. Watson, you are recognized for 5 minutes.

Ms. WATSON. Thank you so much, and I want to thank our witnesses.

Just yesterday, we passed a bill off the House floor that would

prohibit permanent bases in Iraq. When this issue of building the

largest Embassy in the world came to us, I thought it was very curious because we intend to leave sometime soon, I would hope, and

we are investing all of this money in the Baghdad Embassy, about

$600 million.

I am wondering with the number of people—I think the population is somewhere around 68 million—we are building the largest

Embassy in the world. That looks like we plan to stay there for a

long time.

Now what I understand is that the man in charge of the project

for the State Department, James Golden, has not laid eyes on the

constructionsite for the past 2 months and will not do so during the

remainder of the project. Through interviews of Mr. Golden and his

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subordinate, Mary French, we have learned that the Ambassador

ordered Mr. Golden to leave Iraq in May 2007 and that he has not

been allowed to return since then. In fact, Mr. Golden was escorted

off the premises by armed guards.

So, Ambassador Kennedy, this seems like an extraordinary step.

Why did the Ambassador, Ambassador Crocker, expel Mr. Golden

from the Embassy constructionsite he was supposed to oversee?

I am compelled by what Major General Williams said, that this

site is going to come in on time, come in on budget and come in

with the kind of standards that will protect Americans and other

people there.

Ambassador Kennedy.

Mr. KENNEDY. Ms. Watson, the actual onsite project supervisor

for the construction in Baghdad, who is delivering the project on

time and on budget as General Williams said, is Mary French.

Ms. WATSON. Is she responsible for overseeing the project?

General WILLIAMS. Yes. Yes, Congresswoman.

Mr. KENNEDY. Yes, ma’am.

Ms. WATSON. Well, why was Mr. Golden in that position and ordered out of Iraq?

General WILLIAMS. Mr. Golden was never in the position as senior project director. Mary French was.

Ms. WATSON. Oh, so we have incorrect information in front of us?

General WILLIAMS. Mr. Golden’s function is managing director of

our emergency project coordinating office under which the Baghdad

project is one of the few. We have Harare. We have several projects

under that.

Ms. WATSON. Is he still there?

General WILLIAMS. He is not in Iraq. He is back doing.

Ms. WATSON. No, he is not in Iraq. That was the question.

General WILLIAMS. He was never intended to be in Iraq permanently.

Ms. WATSON. Well, was he in Iraq?

General WILLIAMS. No, he was never in Iraq permanently, Congresswoman. He made visits as I do and others do.

Ms. WATSON. Can you clarify something for me? I understand

that Mr. Golden under his statement of work was to make site visits to Iraq, correct?

General WILLIAMS. That is correct.

Ms. WATSON. OK. Did he ever make a site visit to Iraq?

General WILLIAMS. Oh, yes, many times.

Ms. WATSON. That was my question earlier.

General WILLIAMS. Yes, but he is not permanently stationed

there.

Ms. WATSON. Hold on. Hold on. Yes is the answer.

Now was he ordered out of Iraq?

Mr. KENNEDY. The Ambassador indicated that he felt comfortable

that Mary French who was the onsite project supervisor would——

Ms. WATSON. Would you answer my question? Was Mr. Golden

ordered out of Iraq? Am I making myself clear?

Was Mr. Golden ordered out of Iraq?

Mr. KENNEDY. The Ambassador indicated that he did not wish

Mr. Golden to come to Iraq on any further times.

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Ms. WATSON. Very good. Can you tell me what led to that decision?

Mr. KENNEDY. There was a discussion about following procedures

at Post, and the Ambassador indicated that he wished Ms. French,

who was the onsite project supervisor, to finish the project as she

had done so well all along.

Ms. WATSON. So Mr. Golden was there and got into a discussion

with the Ambassador about the procedures, the oversight procedures, is that correct?

Mr. KENNEDY. No, it was not a discussion with the Ambassador.

It was a discussion of operating procedures and Mr. Golden, as the

General indicated, has other responsibilities, significant responsibilities such as our Embassy in Harare as part of his functions.

Ms. WATSON. Well, tell me this. If Ms. French was going to do

the job that Mr. Golden thought he was to do and was told by the

Ambassador to leave Iraq, then why did it take armed guards to

remove him from the Embassy grounds?

Mr. KENNEDY. I can’t since I wasn’t there when Mr. Golden was

interviewed.

Ms. WATSON. Can anyone at the table answer that?

Chairman WAXMAN [presiding]. The gentlelady’s time is expired.

Mr. Issa.

Mr. ISSA. Thank you, Mr. Chairman.

General Williams, again, thanks for your many years since 1960

of service to our country, service that I note you have done at very,

very small compensation by comparison to private contractors. You

have chosen to do that, I think, out of a sense of patriotism, and

I very much appreciate it.

Were you in the room for the previous panel?

General WILLIAMS. I was in the side room, Congressman.

Mr. ISSA. OK, I appreciate that. I am going to followup on a little

of that because you are the expert. You are the person with three

decades in the Corps of Engineers and another two decades in construction.

The estimate of the State Department, which would be you, was

that these trailers had, at least in the specific allocation, $6,000 or

$8,000 or less to make right some punch points of mistakes, some

of them grievous but mistakes, bad wiring, absence of a junction

box and so on. Is that your understanding?

General WILLIAMS. Yes, Congressman, and let me just amplify

here. For someone who served 2 years in Vietnam, I lived in a

trailer park. I know what a trailer park is. I know the difference

between a prefabricated trailer park and permanent construction.

It is temporary.

In my professional opinion after 40 years, you never get something that is temporary, correct. You are constantly improving it,

and it is all a function of who follows who and etc.

So none of this is alarming to the extent that it is putting us in

a situation where we can’t correct it. We have not paid the contractor. We have all protection there. These are punch list items. They

happen on every single job. I just frankly don’t see the issue here.

It is temporary, defined to be anywhere from 1 to 2 years or less,

and it is for an element that will not reside on the new Embassy

compound.

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Mr. ISSA. Thank you, General. You know I have characterized

this as a hearing in search of a villain, so I don’t see it either.

The other day we did have some serious concerns about FEMAdelivered trailers. Out of 100,000, 120,000, some of them just flat

were bad.

General WILLIAMS. Right.

Mr. ISSA. Now that was here in the United States where you

make a phone call, and the things roll in pulled behind somebody’s

pickup truck or they drive themselves in or they come in on flatbed.

Can you characterize what it takes in a combat zone to bring in

modular housing, trailers—heck—water, anything, what people

went through and why you would accept something that came in

that wasn’t quite up to snuff and make it right later rather than

wait 4 months to get somebody inside housing?

General WILLIAMS. Thank you for that question, Congressman,

because these trailers were manufactured in a plant somewhere in

the Middle East. They had to be transported one trailer, one truck

at a time. There were 380 trailers that had to be transferred from

as close as Kuwait but even further than Kuwait.

It was a monumental task. We had 70 days of road closures, and

the trailers arrived. They were as we specked them out.

Yes, they had the odor of formaldehyde because it is my understanding that this is used for other preventive measures. To make

certain that there were no issues with our trailers, we followed the

protocol that was laid out by the manufacturer and that was to air

them out for a period of time. Our industrial hygienists that are

part of my staff concurred with that protocol.

I have learned from Post recently that there is no odor left. We

are going to go one step further and continue to monitor those

trailers to make certain that everything is fine.

I think, Congressman, we have done everything that we could do,

can do under the conditions that we have had to work.

Mr. ISSA. One final question because I think it is a cultural one

in nature, and I am very concerned that we respect cultures of people we bring into countries. If somebody is Sikh or some other religion where they must wear a turban and they will not wear a hard

hat, what has been your experience when you have to deal with

that?

What is construction done like in India and so on?

Is there essentially a reasonable allowance that has to be made

when you have that situation that is not consistent culturally with

our norms? Because that was in the earlier testimony.

General WILLIAMS. Thank you, Congressman.

As I mentioned, I have been all over the world, every corner,

every country, 170 different hosts and locations. We are working in

about half of those.

Culture is an issue. I am very sensitive, and I make certain that

our staff is very sensitive to culture. We have to be.

I meet and greet workers. I don’t spend much time in the embassies. Everyone knows that. I shake hands with them. I take pictures with them. I talk with them, and I am very sensitive about

their religious cultures.

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Mary French handled this as delicately as anyone could handle

it. Mary is not new at this. She has 32 years of experience, a registered architect. She knows what she is doing. Twenty years with

Marriott, she has built buildings before. She is very sensible and

reasonable and careful.

Mr. ISSA. Thank you, General. Thanks again for your service.

I yield back, Mr. Chairman.

Chairman WAXMAN. Thank you, Mr. Issa.

Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman.

Mr. Krongard, if I might ask you a few questions on that, I guess

it was three to four individuals that you interviewed when you

went on your inspection.

Mr. KRONGARD. The formal interview process was about a half a

dozen, roughly give or take, and then randomly I would say I spoke

to probably several dozen others.

Mr. TIERNEY. So six?

Mr. KRONGARD. Six of the formal.

Mr. TIERNEY. That you formally interviewed.

Mr. KRONGARD. And about some 50 or more others.

Mr. TIERNEY. You took notes and put that into a report?

Mr. KRONGARD. The notes were hard to take, and they were on

the backs of things because I didn’t want people to think I was, I

didn’t want to make them uncomfortable and think that they were

being transcribed or anything. But I took notes, and they found

their way into my report.

Mr. TIERNEY. Now First Kuwaiti is the one that selected the individuals whom you would interview. Is that a typical way to operate?

Mr. KRONGARD. Well, in this particular circumstance, I had no

other way of doing that, but that is why I particularly wandered

around and spoke, as I say, to several dozen others selected randomly.

Mr. TIERNEY. Why was there no other way for you to do that in

this instance?

Mr. KRONGARD. I don’t know how, who I would have selected. I

didn’t have a roster of the hundreds or even thousands of employees that they had, and it is correct.

I mean people have thrown out this conspiracy theory that somehow First Kuwaiti stacked the deck. I can only tell you that my

sense of the demeanor of the people that I spoke to was that they

were being open and honest with me. The people that I randomly

selected, I have every confidence were being open with me.

But most important, sir, I was not there in Iraq. MNF-I IG was

there. They do this all the time. They are the experts at this. They

inspected 58 camps. So I asked them to do even more, and their

formal interview was, I think, 37 people, and they were confident

that they had open and candid responses.

Mr. TIERNEY. On your interviews with about 10 to 15 percent of

the people that fluently spoke English, why didn’t you take a translator with you?

Mr. KRONGARD. I did have a translator with me when I went

randomly. I don’t know where your 10 or 15 percent comes from.

Mr. TIERNEY. Ms. French.

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Mr. KRONGARD. Pardon?

Mr. TIERNEY. Ms. French.

Mr. KRONGARD. I mean I just don’t know that, but there were

certainly a large number of people that did speak English. But during my wandering around, I did have a translator with me.

Mr. TIERNEY. You mentioned a series of allegations that led you

to undertake your investigation. Did you followup with the specific

individuals who made those allegations?

Mr. KRONGARD. Sir, I have, I was provided with the transcript

of the interview that was given to Mr. Mayberry by the Trafficking

in Persons Bureau. So I had Mr. Mayberry’s testimony.

Mr. TIERNEY. Did you followup and speak to him directly?

Mr. KRONGARD. I had no reason to speak to him directly, and I,

sitting here today, have no reason to. I had everything that he said.

David Finney has published everything that he has said. Some of

the things that he said I saw with my own eyes.

Mr. TIERNEY. Well, let me point to what he said. He saw things

in March. You went there in September. So you thought there was

no reason for you to question him at all about any disparities or

differences that might have arisen in that point in time?

You didn’t want to inquire deeper into his observations or serious

allegations?

Mr. KRONGARD. No. I had everything he said. By the way, sir,

I had been there the year before. I was there before he was.

Mr. TIERNEY. But you did a more intensive investigation the second time, if I am correct, is that right?

Mr. KRONGARD. Sir, when I look right now at the transcript of

his interview with the Trafficking in Persons Bureau and I see

some of the allegations that were made, they were contrary to what

I saw and experienced in every post around the world, and I have

oversight responsibility for some 265 posts and missions around the

world.

The vast number of those have some disgruntled employee and

they make all kinds of allegations and they may be true. I am not

saying that they are not, but I can’t possibly start out by saying

that anybody who makes an allegation, I should personally interview.

I was given this transcript of Mr. Mayberry, and I had all the

things that he said in the newspapers and on 60 Minutes.

Mr. TIERNEY. Other than the two site visits that you made, who

else did you talk to in order to investigate the allegations?

Mr. KRONGARD. I am sorry, sir.

Mr. TIERNEY. Other than the individuals that you talked to on

your two sites, who else did you talk to during the course of your

investigation?

Mr. KRONGARD. First of all, I didn’t do an investigation. I have

tried to point that out. This was not an audit. It was not an investigation.

This was an agreed upon procedures and a limited review which

I also did in conjunction with visits by the management committee

or the management counselor. I did it in conjunction with two visits by the MNF-I IG who are really the experts at this.

Mr. TIERNEY. They didn’t go there until some time after you

went. In fact, you tried to go there with them, and they weren’t

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able to make it, and so you went on your own with the deputy, is

that correct?

Mr. KRONGARD. Yes, but not very long after. I was there in September. They were there in December.

Mr. TIERNEY. But you are telling me that you took no responsibility in your position as Inspector General to do an inspection or

to do an audit on your own on these serious allegations?

Mr. KRONGARD. I believe that I did that, sir.

Mr. TIERNEY. I mistook that because I thought you just said you

didn’t do a thorough audit or investigation.

Mr. KRONGARD. I did what I thought was appropriate. I tested

the credibility of the allegations. I looked at what was said, and I

thought that I did an appropriate job, and I think today that I did

an appropriate job.

Mr. TIERNEY. My time is expired. Thank you.

Chairman WAXMAN. Thank you, Mr. Tierney.

I want to recognize myself.

We have heard allegations about concerns raised by Embassy

staff and KBR about the quality of First Kuwaiti’s work on the Embassy complex guard camp. Given that this is the same company

that is going to be responsible for the construction of the permanent buildings at the Embassy complex, I am also concerned about

the quality of work on those buildings.

We have learned that the State Department officials have had

concerns about the design and construction of key systems at the

new Embassy. John Archensky, the deputy director for the Iraq

Project Construction Office, has told committee staff that in reviewing designs prepared by First Kuwaiti his staff identified concerns

about the fire protection system, the HVAC system, the power

plant that could have affected the operation of the Embassy facility. This office is the part of the OBO dedicated to the Embassy

project.

For example, there were concerns that under First Kuwaiti’s design, there were not enough ductwork fans to evacuate smoke from

a fire so that people could exit the building safely. Under First Kuwaiti’s design, the wrong electrical materials for the fire alarm system would be used. Under First Kuwaiti’s design, the electrical

power system might not operate correctly when the building is fully

up and running which could lead to blackouts.

According to Mr. Archensky, the Iraq Project Construction Office

sent back the fire alarm system designs to First Kuwaiti three

times and each time got back designs that did not address their

concerns.

General Williams, is there any reason that First Kuwaiti ignored

proposed corrections to design flaws identified by your staff?

General WILLIAMS. Well, I don’t think they ignored them, Chairman Waxman. Let me just explain this process.

There is always on these Embassy compounds and of course in

all the other construction that I have done, it is always give and

take around designs and submittals and so on.

We have an ongoing process where we invite the particular discipline that we might have concern about. In this case, it would be

fire engineers. At my request, they made the normal visit out, and

we want them to dig and look and turn over every rock. I expect

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a report to come back identical to the way it came back so that we

can be more vigilant about it.

We take that report. We use it as a quality assurance to make

certain that things are done correct.

Chairman WAXMAN. I appreciate that.

General WILLIAMS. But the real, if I could.

Chairman WAXMAN. Sure.

General WILLIAMS. The real rights of passage, if you will, for everything that we build on an Embassy is an accreditation process

which occurs, about to occur now on the new Embassy. It will judge

how the Embassy was built because prior to building—I think you

know this, Mr. Chairman—we have to certify to the Congress that

around a design, this is what we are going to build.

So the accreditation team comes back at about the 98, 99 percent

level and accredits that. That process will take place. There is no

way to have or to put in place a new Embassy compound that does

not meet our specifications. There is a lot of give and take.

Chairman WAXMAN. General, I appreciate that.

But when the installation work began, the construction office

conducted an inspection of the fire safety system and identified the

following problems. The inspection determined that First Kuwaiti

had installed the wrong size conduits in the alarm system that had

to be fixed. The inspection determined that the pipe for the sprinkler system were not connected properly and could break apart

under pressure.

Are you concerned about these problems that your staff identified

or do you just hope that when you do the accreditation it is going

to be corrected?

One of the documents we asked to see before this hearing was

the fire safety report that documented the problems we have been

talking about. Mr. Archensky talked about this report in his interview with the committee staff. This is being withheld from the committee.

I don’t understand why it is being withheld. Hiding bad news

will not make bad news go away. It usually compounds the problem.

I want your response to this. Are you concerned about these

problems that your staff has identified?

General WILLIAMS. I would be happy to, Mr. Chairman. I am concerned about every single problem, and I think anyone who has

been in an earshot of me for the last 6 years knows this. I turn

over most of these myself when I go. I am looking for them.

Any time a report comes in to me, I ordered the fire people to

go out as I do on all of these. Go out and take a look. I send electrical people out. I send mechanical people out, etc.

I want to be absolutely certain because there will be an accreditation process, and I want these things corrected.

I have found with this contractor that there has never been any

shyness on correcting what we bring to their attention. They want

to get it right. They have tried very hard to get it right. They are

not perfect.

I have never seen a perfect project. There is always when you are

installing something of this magnitude, there are things that are

not exactly the way they should be, and that is the reason we have

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these checkpoints in the process. We have a good process. If you

look at the 50 embassies that we have built, they will meet the test

and the standard.

Chairman WAXMAN. The guard camp went through the same

process.

General WILLIAMS. No. Guard camp is a temporary facility. It is

not subject to the rigor of a permanent facility.

Chairman WAXMAN. I see. So the fact that was all messed up

with all sorts of problems shouldn’t be taken as evidence that, one,

you didn’t have a process that worked and, two, the company that

didn’t work shouldn’t be held accountable for it or thought maybe

would be doing poor work on the Embassy.

General WILLIAMS. No, Chairman Waxman. The company that

built it should be held responsible for doing everything that they

set out to do. As I mentioned earlier, we have not paid them, so

the Government has no issue here.

Any of these issues that we feel that clearly are on First Kuwaiti’s plate, they have been or will be taken care of.

But, as I said earlier, for someone who spent 2 years in Vietnam

and lived in a camp, you never get a camp right. You constantly

are doing things to it and it is sort of in the eyes of who comes

after you. But we do the best we can with it to make it work.

Chairman WAXMAN. My time is expired, but I just want to say

that KBR complained that this wasn’t being done properly. It still

wasn’t fixed. Then your own people went out and came back with

the same problems. It still wasn’t fixed.

I just think that is an indication of a system that is not working

the way it should, and that is why I am asking all these questions.

It is Mr. Shays’ time.

General WILLIAMS. Is it possible for me to respond to that?

Chairman WAXMAN. Certainly, go ahead.

General WILLIAMS. Our people, my people did not go back to the

man camp and come back and say that things were not done. What

I recall is I have 80 union workers on this project, all Americans,

and to make certain that this camp’s electrical part was right.

Chairman WAXMAN. Let me just say that I have a document that

I am sure you have seen, and it says: ‘‘Within this document are

the results of the commissioning of the DS man camp on the west

side of the new Embassy complex in Baghdad, Iraq. As noted within the enclosed documentation, the camp meets and exceeds the requirements of Section C of contract.’’

Then it goes through within the camp are the following structures, and it is certified.

Well, I don’t know what that is supposed to mean if it turns out

they certify it and then it is not meeting those expectations.

General WILLIAMS. Well, there is a punch list on every single

piece of work that I think anyone has ever touched. This was KBR

coming in, and they looked at things. We had, as my friend here

said, some discussions about them, and we will correct those.

Chairman WAXMAN. KBR came in after the punch list.

General WILLIAMS. Yes.

Chairman WAXMAN. So they came in after the punch list and

said these things are not the way they are supposed to be.

Mr. Shays.

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Mr. SHAYS. Thank you. Thank you, Mr. Chairman, and thank

you to the witnesses.

As I have listened to today’s hearing, I came in with an open

mind, concerned particularly about, one, the cost of the facility that

costs $592 million. That is a lot of money considering this is a rather big facility but recognizing that you are basically going to look

to house everyone within the compound which makes it much more

expensive.

I am struck by the fact that there is really no contention that

you aren’t on time and that you haven’t stayed within cost. So that

is a significant fact to point out.

There is no project that is not going to have issues about the

quality of work in certain places. The issue is how have you dealt

with it. I am struck by your testimony and the witnesses that testified that you have dealt with it pretty well.

But who knows? Maybe there will be some report that finds

something later that you haven’t done well. The one thing we can

be certain of is you have done a heck of a lot better job in building

this facility in a war zone than we have done in staying within cost

and within time in the visitors center here in the Capitol. That is

very clear to me.

What is disconcerting to me is the continual confusion of a workers compounds in temporary trailers, now temporary more than 90

days but not permanent. They are going to be taken down and mixing that up with the facility.

Then when we look at the KBR’s first witness, we are basically looking at something under $6,000 worth of mistakes, not tens of

thousands, not hundreds of thousands, not millions, certainly not

billions. So I am struck with that.

What concerns me is the issue that it relates to employees. One,

I would have liked these to be Iraqis. First, tell me why they

couldn’t be Iraqis and then I want to go from there.

General WILLIAMS. Congressman Shays, we tried very hard to

vett and get Iraqis to work. This was our first choice, at least the

contractor’s first choice.

I will let my colleague, Ambassador Kennedy, speak to the difficulties of getting that process through.

Mr. SHAYS. Give me the short version, not the long version.

Mr. KENNEDY. Mr. Shays, there are two issues here. One is that

because of the security situation in Baghdad, the Iraqi employees

are truly afraid to transit in and out of the Green Zone.

Second, we have not been able to find an easy way to vett, run

police checks, run security checks on Iraqis because of the problems

that are currently present in the country. Therefore, we did not

want to inject an element of bringing employees onto the site who

might do not what we wanted them to do, to do something nefarious.

So, first choice, hire local but if we cannot hire local for a variety

of reasons, then we must go to alternate means of employment.

Mr. SHAYS. Mr. Inspector General, I am looking at a document,

and it says basically several NEC TCNs reported that fraudulent

hiring practices were used during their recruitment. They stated

the promises made and the terms of the original contracts presented to them in their country of origin were inconsistent with the

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actual conditions—low pay, longer hours, no days off—of their employment in Iraq.

In all cases where deceptive hiring practices were evident, the

workers originated from the Indian Subcontinent, countries of

Nepal, India, Pakistan, Bangladesh and Sri Lanka. The deception

was from recruiting agencies that were being paid by these workers

if they accepted these jobs and traveled to Iraq.

Additionally, some workers were told to sign contracts in their

home countries in English even though they could not read or understand the text of the contract.

That seems to be to be a pretty serious problem. While we can’t

necessarily call it slave labor, doesn’t it suggest that the people

who were contracting these people may have made out like bandits

while the people who ended up working in Iraq were clearly being

abused, given they didn’t get everything they expected in terms of

pay and given that their hours may have been longer, etc.?

Put in context that. It seems to me that is a pretty strong indictment.

Mr. KRONGARD. Yes, sir, it may well be. The question is who is

it an indictment of, and it is mainly an indictment of recruiting

practices in the Indian Subcontinent countries. I don’t really have

the jurisdiction.

Mr. SHAYS. I know you don’t have the jurisdiction, but maybe I

could ask all of you to address it.

This is what I think this hearing should focus on. We can’t wash

our hands of the fact that we asked someone else to do the recruiting and, in the end, we end up with people who have been in fact

brought in, getting less pay, and not getting the employment they

thought while the people who did it seem to have made out quite

well.

I guess what I want is what is the difference?

Mr. KRONGARD. If I may, and I don’t want to be in the position

of defending these recruiters because I am most certainly not. I

want it on the record that I very much disapprove of that. We have

recruiters in this country who do things that I disapprove of.

But I did go back to First Kuwaiti because I wanted to know

whether they had any relationships with these recruiters or were

sharing in the making out like a bandit as you say.

What I was told and based on my discussions, limited though

they were, it was supported that First Kuwaiti itself was not using

recruiting agencies, that they did not have any direct relationships,

that they did not share in any of the profits, that for the most part

the people that they came in touch with who became employees on

the new Embassy compound site had been hired by other construction companies on other sites and then had switched over to First

Kuwaiti.

Mr. SHAYS. Let me interrupt, though. It was our money that was

paying these folks, wasn’t it, ultimately?

Mr. KRONGARD. No.

Mr. SHAYS. I don’t know how you can say no. Aren’t we paying

for the Embassy?

Mr. KRONGARD. We are paying a fixed price for the Embassy.

That is correct.

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Mr. SHAYS. Right, and so it may not be our taking and writing

out a check to them, but it is basically our dollars going to be used

in this Embassy, hiring contractors and others to do the job. Don’t

we have some moral responsibility to make sure that the employees

who are working there aren’t being taken advantage of?

I would ask the indulgence of the Chair just to pursue it with

the others.

So do you have a comment on that?

Mr. KRONGARD. I am sorry. I don’t believe that I have any authority to enforce the laws of Nepal or Sri Lanka. I really don’t.

Mr. SHAYS. I am really not asking whether you enforce it. You

were clear as to what you were saying. You were saying these people were taken advantage of.

Mr. KRONGARD. Yes.

Mr. SHAYS. But it seems to me that it rests on our shoulders because we are the ones who are ultimately paying the people to

build this.

Mr. KRONGARD. And, sir, I have advised the Department of Justice of that.

Mr. SHAYS. OK. Let me ask the State, and then we will go from

there.

Thank you, Mr. Chairman.

General WILLIAMS. Yes, just a quick note, Congressman Shays,

before I pass to my procurement colleague.

Every matter that relates to the human element in the area that

I supervise is important as part of the preconstruction conferences

with any contractor, American contractors, because you know they

get their work done with foreign workers. So it is not just an isolated matter here for First Kuwaiti.

We say to them, we expect you to be very, very much in line with

our rules and regulations as much as they can.

Mr. SHAYS. But they weren’t.

General WILLIAMS. Pardon me?

Mr. SHAYS. It appears that they were not.

General WILLIAMS. Well, no. We say this every time that we hear

one of these allegations.

Mr. SHAYS. General, I just have to say, saying it and somehow

enforcing it with how we reimburse and so on, there should be

some mechanism that holds us accountable.

I realize I am a little over time, but I would like to just have Mr.

Moser respond.

Mr. TIERNEY [presiding]. Before you do, if you would just yield

to me 1 second.

Mr. SHAYS. Sure.

Mr. TIERNEY. I think you are onto the nub of this part of the

hearing. The subcommittee’s part of the hearing is on this, and

that is what we thought was important.

We all know what we are dealing with here, and I don’t think

anybody is comfortable. I wouldn’t suggest that any of you gentlemen are comfortable with what is going on.

So the question is why don’t we have it in the contracts to people

like First Kuwaiti and for somebody like that, Mr. Moser? Why

isn’t it a contractual matter that they make sure that even if they

try to outsource the hiring or if they accept the work?

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I mean I don’t really buy that everybody just showed up. Three

thousand people showed up, and they were actually hired by somebody else and just hopped over the fence to First Kuwaiti or whatever. But why aren’t they responsible for the recruiters and the recruiters’ bad practices and then that company is responsible to us

so that this kind of thing doesn’t happen?

Mr. MOSER. Well, Mr. Shays, I think to be honest with you, we

do the contract according to the Federal acquisition regulations.

Mr. SHAYS. I don’t think your mic is on.

Mr. MOSER. Excuse me. I am sorry. The mic wasn’t on.

But to be honest with you, Mr. Chairman, we construct the contracts on the basis of the Federal acquisition regulations. In June

2006, we added to all of our contracts unilaterally the Trafficking

in Persons clause in conformance with legislation by Congress.

We take these very seriously, but at this time our reach does not

extend to third country hiring practices. It is not within the terms

of the contract. Even though we can have a discussion about

whether that is a good idea or not, it is currently not within the

legislative scope of the Federal acquisition regulations.

Mr. SHAYS. Well, as the chairman said to me, we should make

sure that we have impact there.

I would just conclude, and I think all my colleagues would agree

so I am not just taking a position that is unique to my own view.

We are complicitous, and we have to make sure this does not happen. We have to make sure that in the process of trying to find people who can work at a facility, given it can’t be Iraqis, that we are

in essence becoming part of the problem of human trafficking.

That is what I am concerned about at least as it relates to this

hearing, and I know, Mr. chairman, that was your concern when

we started this.

Mr. TIERNEY. This is the reason for this hearing. I understand

that the modification was made to the First Kuwaiti contract last

year amongst a lot of other contracts because of legislation this

Congress passed, sharing everyone’s concern on that. They added

the human trafficking clause. The President has made it very clear

that he declared that there be zero tolerance for it when it came

to human trafficking.

But even under General Casey’s tenure in Iraq, the Department

of Defense confirmed that there were deceptive hiring practices

going on at the time, excessive fees charged by overseas job brokers

who lured workers into Iraq, substandard living conditions once laborers arrived, violations of Iraqi immigration laws, lack of mandatory awareness training on the U.S. bases concerning human trafficking.

The General ordered in April 2006, that harsh actions be taken

against firms that failed to return passports or other abuse practices. Contracts would be terminated. Contractors would be

blacklisted from future work, and commanders could physically bar

firms from bases.

We have put that modification there. Are you telling us now that

is not enough, that in order to hold the Kuwaiti company responsible for their subcontractors who are out there bringing people in

under these bad conditions?

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It seems to me we need, one, a more intensive authority for Mr.

Krongard to go in and inspect and audit and, two, we need to put

some teeth into these things so it doesn’t happen. I will just take

the liberty of getting a response on that.

General WILLIAMS. Mr. Chairman, we will clearly look into it. We

take your counsel very seriously. This is a matter that if we can

have more authority and provisions, I am sure that our procurement arm would be delighted to deal with that.

Mr. TIERNEY. I thank you.

As I think the testimony here today indicates—Mr. Shays, I

think you will agree—inspections on a regular basis to see whether

or not this is happening, contractual provisions to hold people responsible, not just to kick it down the road and say, gee, it happened in Asia or Southeast Asia, and then some accountability on

that.

Mr. KRONGARD. Sir, if I could respond to you as well because I

agree with you.

Mr. TIERNEY. Yes, Mr. Krongard, please.

Mr. KRONGARD. I wish I did have more authority, and that is

why I went to the Justice Department. I have had lengthy discussions with them about what their jurisdiction is.

But I do want to say you mentioned their subcontractors. We still

do not have any evidence that First Kuwaiti is in privity with or

has relationships with these contractors, these recruiters.

Mr. TIERNEY. I understand, but maybe we should find out whether that is the case.

Mr. KRONGARD. I did the best I could.

Mr. TIERNEY. Because it stretches the credibility of all of us here

to think that every single worker for First Kuwaiti just happened

to be in Iraq at the time, whether they are from Nepal or India or

some place else and they took them from somebody else’s handiwork of getting them into Iraq.

Mr. KRONGARD. No. What happens is that the workers in these

countries are recruited. They pay money to the recruiters, and the

recruiters assist them just like college recruiters or something

would do here and assist them in getting the jobs with First Kuwaiti or with somebody else.

Mr. TIERNEY. People can’t be turning a blind eye to that. People

know how this process works, and it shows up on their doorstep.

People have to take responsibility for it one way or the other. It

starts with us, goes down to the contractor, goes right down to

what is happening to those people.

When you have to take $2,500 from somebody in order to get

them for a job that pays $7 a day and then tell them they can’t

leave unless they pay $3,000 which is some of the testimony that

we have in reports—it was before today—there is a problem here.

I don’t think any of you disagree.

We need to do something about that, and that is the purpose of

this hearing and this portion of this hearing.

General WILLIAMS. We take your counsel, Mr. Chairman.

Mr. TIERNEY. Thank you.

Ms. McCollum, you are recognized for 5 minutes. Thank you for

your patience.

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Ms. MCCOLLUM. Thank you, Mr. Chair. I want to read a little

more here.

These workers reported that they usually raised money to pay for

the recruiting fees by selling or mortgaging their land or house to

a bank at 18 to 24 percent interest per year. Other workers borrowed money from family or friends in their village to pay these

legal fees to recruiters, and in several extreme cases it went on

that workers relinquished all pay between 9 and 12 months of

labor in order to repay their recruiting fees and interest.

On page 2, No. 4, I believe these are your words: ‘‘I saw no evidence of trafficking in persons violations other than illegal recruitment fees occurring. The workers were being paid. They had the

ability to quit any time and, with some advance notice, return to

their home country.’’

Are those your words?

Mr. KRONGARD. No. What you read from first were the words of

the Inspector General of MNF-I which is appended to my report.

Ms. MCCOLLUM. This is attached to your report.

Mr. KRONGARD. But I don’t think I disagree with their conclusion

that those things which were——

Ms. MCCOLLUM. Excuse me, though. People who mortgage their

homes at 18 to 20 percent interest per year, borrowed money from

family and friends, basically said that they relinquished all pay for

9 to 12 months, you would agree then with the statement at the

bottom that workers were being paid and they had the ability to

quit any time at some advance notice and return to their home

country?

Mr. KRONGARD. Yes, they did have the right to do that.

Ms. MCCOLLUM. They had the right to do that probably if they

came up with their own airfare to get back home and could find

their passports.

I have a question, sir. Mr. Owens and Mr. Mayberry described

people who had been brought into work, in their opinion, under

false pretenses. Do you think that there is some validity to their

statements based on what I just read and based on what you said

about how this was subcontracted to somebody to somebody to

somebody so nobody really knew what was going on when these

people were recruited or what they had been told?

Mr. KRONGARD. No, I don’t think that is what we were. That is

not what I was told, and that is not what I am saying.

First of all, the people that I spoke to, and I didn’t speak to.

Ms. MCCOLLUM. I asked you if you thought Mr. Owens and Mr.

Mayberry, based on what they testified, based on the proximity,

the amount of time that they spent with these individuals, being

in an airplane when destination Baghdad came over the speaker.

I think most people around the world know where Baghdad is and

what Baghdad translates in English.

They seemed pretty shocked and seemed like they didn’t think

this was what they signed up for.

Based on what I had just read and what has just been discussed

by you gentlemen here for, in my opinion, horrific job recruiting

practices that this in fact, what Mr. Owens and what Mr. Mayberry

said, very well could have been accurate. You don’t know that it

isn’t accurate, do you?

156

Mr. KRONGARD. Neither I nor the MNF-I IG had found any reason to believe that the stories regarding the aircraft and people not

knowing where they were going. We found nothing to support that.

Ms. MCCOLLUM. But you don’t know whether it is accurate or inaccurate, do you?

Mr. KRONGARD. I have a lot of indication that it is not accurate.

All the information that I have, other than from those two gentlemen, is that it is inaccurate.

Ms. MCCOLLUM. Maybe General Williams, you were talking

about security earlier. Is the site of the U.S. Embassy construction

area, a secure area?

General WILLIAMS. Yes, it is.

Ms. MCCOLLUM. Does access to the Green Zone and the Embassy

constructionsite require a security clearance?

General WILLIAMS. That is set by the Green Zone. I defer to my

colleague.

Ms. MCCOLLUM. The Embassy constructionsite then, does that

require a security clearance?

Mr. KENNEDY. The access to the Green Zone is not, does not require a U.S. security clearance. Access to the constructionsite, as

General Williams can explain better than I, there are multiple layers within the constructionsite.

Ms. MCCOLLUM. I have limited time. I understand that. It is already yellow.

Have security background checks been done on all the individuals permitted inside of the Embassy construction zone?

General WILLIAMS. When they were required, I have not received

any information to suggest they are not.

Ms. MCCOLLUM. All the employees of First Kuwaiti working on

the site, do they all have security background checks?

General WILLIAMS. They have been vetted through the system

that is required for all workers on our sites.

Ms. MCCOLLUM. So these recruiters when they were getting

them in the villages and they were signing up their 18 and 20 percent mortgages on their homes so that they could pay these exorbitant recruiting fees, they were vetted by these recruiters?

General WILLIAMS. Congresswoman, I believe this was occurring

in the countries where the individuals were.

Ms. MCCOLLUM. Whose responsibility should it be for the security background checks? Should it be the U.S. Government’s responsibility?

General WILLIAMS. I will defer.

Mr. KENNEDY. Ms. McCollum, there is a distinction between a

U.S. security clearance which is required and can only be granted

to an American citizen to work in certain areas and to have either

access to classified information.

Ms. MCCOLLUM. I made it very clear I was talking about

constructionsites, gentlemen. I wasn’t talking about looking at how

the alarm system is going to operate but the basic construction system.

You said you couldn’t hire Iraqis because they couldn’t be vetted.

So I am asking, who vetted these people?

Mr. KENNEDY. Name checks are run on workers, but there is a

difference between a vetting name check and a security clearance,

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and that is what I am trying to explain is that there are, in effect,

gradations and levels depending on the work involved, ma’am.

Ms. MCCOLLUM. Well, Mr. Chair, my time is up.

But I would be very anxious in finding out why we weren’t able

to really find out how these people were selected for this job. They

came from countries—Pakistan, Egypt, Bangladesh, and India—

where there are terrorism concerns, and the fact that they are incountry, working in a U.S. area, building a U.S. Embassy is a concern to me.

Mr. TIERNEY. Mr. Kennedy.

Mr. KENNEDY. If I might, Ms. McCollum, I know your time is

limited today, but I would be happy to come and see you, accompanied by a senior representative from our diplomatic security

service, to explain the intricate process that we do go through,

ma’am.

Ms. MCCOLLUM. Mr. Kennedy, I think just providing that information to the committee would be fine. Thank you very much for

your offer.

Mr. TIERNEY. Thank you, Ms. McCollum.

Ambassador, let me just pry a second on that because I am curious. There were two aspects to your issue with the people. One was

that Iraqis were finding it difficult to go into the Green Zone and

back out. They had their own security they were concerned about,

and I understand that.

That may, in fact, be a stopper on that because my first question

coming in here was why aren’t we just hiring all the Iraqis. If we

can hire Pakistanis, we should be able to do the same background

check on all of them.

Is that pretty much it, that we could do the same background

check on everybody and hire, but it is really the second point that

is a stopper?

Mr. KENNEDY. It is both, sir. I mean there are a number of Iraqis

that are afraid to enter the Green Zone and, second, we are able

to do the limited vetting that we do in some locations easier than

we can do it in Iraq because of the lack of records and the ongoing

strife there.

Mr. TIERNEY. So it may be easier in Nepal and Pakistan and

places like that than it is in Iraq?

Mr. KENNEDY. To do vetting.

Mr. KRONGARD. Sir, could I make a point on that as well?

Mr. TIERNEY. Sure.

Mr. KRONGARD. Some 2 years ago, that was before some of you,

and in conjunction with the Inspector General of the Department

of Defense, my office issued an interagency assessment at an Iraqi

police training program. One of the things we pointed out then, and

I think it was well received, was that the recruits to the police

forces were not vetted well.

There has always been difficulty for us as Americans in vetting

Iraqis particularly because you might find some terrorists in some

of these countries, but in Iraq every one has a side. They have a

religion. They have an ethnicity. They have a tribe. They are living

in that war zone area.

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We were critical at that time of the vetting process, and I personally continue to be concerned about anything that would bring

large numbers of Iraqis who are not well vetted into secure areas.

Mr. TIERNEY. Thank you for that.

General, I have a point that I want to raise. Michael Michener

from the Bureau of Democracy, Human Rights and Labor, DRL I

guess we call it, I am informed that he sought access to the Embassy site in order to investigate allegations of labor abuse and reportedly he was denied access by Mr. Golden, by James Golden.

Can you enlighten us on that?

General WILLIAMS. No, I cannot. I heard the same thing. I

checked with Mary French who is the keeper of the key to whoever

comes on the guard site. She is very tight. She is very sensitive

about what goes on, on that site.

Congressman, just understand that our people are under tremendous pressure, and I know you have appreciation of what a war

zone is, but it is wound up as tight as it can get every day. There

is so much that Mary has to look at. One is security. We were concerned about this from day one.

Mr. TIERNEY. Can I just interrupt you for a second because I

want to make sure we get your answer right. I am not told that

she refused anybody admission. I am told that Mr. Golden, without

comment, refused Mr. Michener the access. Now Mr. Golden himself isn’t even on the site.

General WILLIAMS. Right, so I don’t know that.

Mr. TIERNEY. Would you inquire into that for us?

General WILLIAMS. I will inquire, and I will get back to you on

that, sir.

Mr. TIERNEY. And get back to the committee on what is going on

with that because I think that is important to know.

General WILLIAMS. Yes, sir.

Mr. TIERNEY. I assume, and you can tell me otherwise, that you

have never resisted the initiation of an investigation by the Inspector General, by the Department of Justice or any other investigative body, even the DRL. Is that correct?

General WILLIAMS. No, but when issues come to me in that regard, I report them to the Inspector General and the department

in the State Department that is responsible for them.

Mr. TIERNEY. I will tell you one more reason why that concerns

me. I have a series of e-mails here that went from the DRL back

and forth to Baghdad on that. The last one is from Mr. Golden, and

it basically is to Mary French. It refers to an e-mail about this trafficking question and whether or not we can inquire of those matters or not. Mr. Golden responds to Mary French, do not respond

to these folks, the DRL.

I would be concerned about that. I hope you will look into that.

General WILLIAMS. Well, I will look into it.

Mr. TIERNEY. Because I think it is their job to inquire.

General WILLIAMS. Sure.

Mr. TIERNEY. We want them to do that, and I suspect you want

them to do it.

General WILLIAMS. That is right.

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Mr. TIERNEY. Last point for me before Mr. Shays adds his last

one and we will let you go, and I don’t know if Mr. Kennedy wants

to answer this.

I understand we are building or plan to build an Embassy in

Lebanon, and there has been controversy reported recently that it

is right smack in the area where Hezbollah are said to control. I

am told recently that might now be on hold. Is it on hold or is it

going forward?

If it is on hold, exactly when was that decision made and communicated to you?

Mr. KENNEDY. As part of our ongoing process, the General working with the entire Department prepares a list, and we will build

this Embassy next and then that Embassy. We had plans to build

an Embassy in Beirut.

In light of the recent events in Lebanon, there was a discussion

within the Department and on July 6th, the Under Secretary for

Management determined that the conditions on the ground in Beirut did not permit us now to proceed with the construction effort.

That was communicated the following day to the General, to the

Near East Bureau and to our Ambassador in Lebanon.

Mr. TIERNEY. We are all aware that it was the Embassy in Lebanon, that going back and forth there seemed to be some discussion, at least on the wire, that the Ambassador and people in Lebanon were anxious that it not happen.

There was pushback from the General. I guess from you or

maybe Mr. Golden or others. This went back and forth until there

was a decision made. Is that not accurate?

Mr. KENNEDY. There was a discussion about what is best to do.

We sought the advice of the Ambassador, and the Ambassador

made his recommendation, and the Under Secretary determined

that conditions on the ground did not permit us to build that Embassy at this time. That was then communicated to all within the

Department and to our Ambassador in Beirut.

General WILLIAMS. And it was a very orderly process, Mr. Chairman, of give and take. So we arrived at a decision, and it is fine.

Mr. TIERNEY. And so, as of July 6th, it is on hold.

Mr. KENNEDY. Yes, sir.

Mr. TIERNEY. You will inform Congress as you move forward if

there is any change in that.

Mr. KENNEDY. That is correct, sir.

Mr. TIERNEY. Last question from me, I would like your reaction

to a statement that the Embassy in Iraq is bigger than it should

be if you really expect Iraq to stabilize and not as big as it needs

to be the nerve center of an ongoing war effort.

General WILLIAMS. Well, let me speak to that, Mr. Chairman, because we took great care before the appropriations committees and

the authorizers before we moved forward. All of the plans for the

execution of this project was presented to them.

One of the issues that was on the table was availability. What

happens if we go down? What happens if we expand?

If you look at our site, you know it is sort of rectangular in

shape. So we spread it out over the 65 acres to allow us the opportunity to jettison, cutoff, sell off, give away, whatever we were

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going to do with any one of the facilities, and we left the nerve center in the center of this footprint.

Mr. TIERNEY. Hence, they call it the nerve center.

General WILLIAMS. So we could get as small as needed to get and

we could jettison off the rest. Our appropriators thought this was

a good way to do it, so we can expand or we can shrink.

Mr. TIERNEY. Good. Thank you for that.

Mr. Shays, you indicated you had a further question.

Mr. SHAYS. Just, Mr. Chairman, I want to thank our witnesses.

I want to thank them for their work. I want to thank them for

their dedication and to suggest that I also appreciate your candor

in the area that we do need to address and that is the hiring practices of third parties.

That is something that, one, we need to empower the Inspector

General to have a little bit more oversight, and we need to make

sure that we are not washing our hands of it because it is a third

party. I think you all agree.

That is the element of this hearing that I thought had merit. I

will say the other aspects of it, I think, didn’t. But this is the area

that did in my judgment.

Mr. TIERNEY. Thank you.

Mr. SHAYS. I thank you, Mr. Chairman, because I know that is

what you intended.

Mr. TIERNEY. Mr. Shays, that is exactly what this is.

Mr. SHAYS. Let me make this point. I know this was the intent

of this subcommittee’s hearing.

Mr. TIERNEY. It exactly was, and I thank you for that.

Gentlemen, I think that there are only two things outstanding.

One is there is a document request and another is a subpoena, and

I would just like to get a date.

I think Mr. Williams, Ambassador Kennedy and Mr. Krongard

are the ones who want to be responding to that, if you can just give

me a date as to when we can expect that material.

Mr. KENNEDY. We did get a number of materials to you today.

There is a cover letter, Mr. Chairman. Our legislative people are

in contact with you.

There are a couple of documents that you have requested that we

simply have not been able to identify a document that directly

equates to your request, but we have no intention of hiding anything from you.

Mr. TIERNEY. No claims of executive privilege or anything else.

Mr. KENNEDY. Not that I am aware, sir.

Mr. TIERNEY. Mr. Krongard.

Mr. KRONGARD. Sir, if I may, we did. I still to this moment

haven’t seen the subpoena. But when it was told to me yesterday,

I spoke to people who responded to you and there were two things

that were put in a letter, I think that came to you this morning.

One is that I can tell you that I have nothing of any significance

that hasn’t been incorporated or referred to in my report.

But there are things which do exist, and I am very concerned

that to give up investigative materials like this to requests such as

this at this time would be very, have a very chilling effect on my

ability to carry out my statutory responsibilities.

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Mr. TIERNEY. Well, I am going to do you a favor then. I am going

to have our committee work with you to see if you get beyond that

before we do anything formal on that.

If that proves to be the case, then certainly we will respect that.

If it doesn’t, we will talk to the minority and we will come back

and discuss with you how we might get what we need without jeopardizing your responsibilities.

Mr. KRONGARD. You understand, sir, that there is a distinction

between the Department responding and the Departmental IG responding.

Mr. TIERNEY. I certainly do. I certainly do.

Mr. Davis.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, let me thank you.

This panel gets to the nub of the issue on the third country nationals, an issue that I don’t think has been a priority ever. It has

been a unique problem, and I appreciate your candor on this, and

I appreciate the chairman’s calling our attention to it.

As far as the other elements of the hearing, I think we could

have gotten right to this and gotten right to the nub of it, and I

thought the other was kind of, frankly, a little wasteful.

But, Mr. Chairman, I appreciate your bringing this to our attention, and I appreciate the job you are doing. Thank you.

Mr. TIERNEY. Thank you very much.

I thank all of you again.

[Whereupon, at 1:50 p.m., the committee and subcommittee were

adjourned.]

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