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US: Former KBR employee pleads guilty in Kuwaiti kickback case

by Brett ClantonHouston Chronicle
July 13th, 2007

A former KBR employee pleaded guilty to participating in a kickback scheme related to the award of a $4.7 million contract in 2003 to a Kuwaiti firm, the Department of Justice said Friday.

The employee Anthony J. Martin, 58, of Houston told a federal court in Peoria, Ill., that he worked with the manager of the Kuwaiti firm to hide more than $50,000 in kickbacks within a subcontract for heavy trucks and refrigerator trailers.

The department provided details of Martin's plea agreement in a statement it released Friday evening.

The agency did not say whether the Kuwaiti contractor, which it did not name, would be pursued by U.S. or Kuwaiti authorities.

Late Friday, KBR was still gathering specifics about the case, said spokeswoman Heather Browne. But she said: "The company in no way tolerates or condones this behavior."

According to the department, here is how the scheme unfolded:

Martin, as a subcontract administrator, was involved in solicitating and negotiating bids from prospective subcontractors on KBR's behalf.

The subcontract at issue was intended to support U.S. military supply lines between Kuwait and Iraq. It was part of a troop support contract KBR had with the Army.

In an e-mail on June 15, 2003, he solicited bids from several subcontractors for 50 semi-tractors and 50 refrigeration trailers for a six-month period, including the Kuwaiti firm. Though four bids came back, Martin awarded the contract to the Kuwaiti firm, which had already paid him about $10,000 prior to the bidding.

Martin acknowledged spending most of the $10,000, which was included in the $50,240 in kickbacks he was to receive in the subcontract.

But after feeling guilty about the deals, he later told the Kuwaiti firm he would not accept the rest of the kickbacks.

In July 2003, Martin said he also made a deal to award the same Kuwaiti firm an $8.8 million contract for 150 semi-tractors that would have funneled $150,265 in kickbacks back to him.

Sentencing has been set for Nov. 16 in Peoria before U.S. District Judge Joe B. McDade. The maximum penalty for the offense is 10 years in prison, a $25,000 fine, or both.

The proceedings are in Illinois because the U.S. Army Operations Support Command, which awarded the troop-support contract, is headquartered in Rock Island, Ill.

The case is one of the first to arise out of the National Procurement Fraud Task Force that was formed in October to root out corruption in government contracting.

KBR also claimed some credit for helping identify and resolve problems related to awarding government contracts in the Middle East.

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