National Defense Authorization Act For Fiscal Year 2017

Floor Speech

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Mr. WYDEN. Mr. President, it was extraordinary to watch this bipartisan effort on TSCA.

An hour ago, Senator Peters and I thought we were going to have floor time for some brief remarks. I would like to ask unanimous consent that Senator Peters have the chance to address the issues he thought he was going to address, and he is going to be brief. I will go next. I will be brief.

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Mr. WYDEN. Mr. President, as the Senate works on the Defense bill, it is important to note the shameful squandering of taxpayer money by a defense contractor accused of willfully exposing U.S. soldiers to toxic chemicals while they served in Iraq.

In 2003, courageous American soldiers, including members of Oregon's National Guard, were given the task of protecting workers of Kellogg Brown & Root, KBR, at the Qarmat Ali water treatment plant in southern Iraq. Some of these soldiers are suing KBR on the grounds that the contractor knowingly exposed them to dangerous carcinogenic substances such as sodium dichromate and hexavalent chromium. Many of these soldiers have reported serious illnesses, and at least one has already passed away at a surprisingly young age. KBR has fought this case, as is their right, and normally this would not be an issue for the Congress, but this is not a normal case because KBR isn't paying for the case. The American taxpayer is picking up the bill. KBR's contract with the Pentagon includes an indemnification clause. This, of course, is legalese that means that the U.S. taxpayer is on the hook not only for any damages incurred as a result of the contractor's actions but also for legal bills and administrative costs incurred during legal battles. It makes no difference if the contractor is at fault or not.

In this case KBR has run up exorbitant and wasteful legal bills in the course of its lengthy legal defenses against the soldiers' claims. The Pentagon, in essence, gave these contractors a blank check. Predictably, KBR has run very high legal fees, paying first-class airfare for lawyers, witnesses, and executives, secure in the knowledge that the taxpayer was picking up the tab.

Along with attorneys billing at $750 an hour, taxpayers are on the hook to pay at least one expert more than $600,000 for testimony and consultation and apparently time spent napping. Of course, there is no incentive for KBR to bring the legal cases to a conclusion. The lawyers can run fees until the cows come home because they know they will not have to pay a dime no matter how the case turns out.

Fortunately, in this indemnity case, and in others, there is a solution provided in the same contract. The contract empowers the Department of Defense to take over the litigation and look out for the interest of the American taxpayer who is footing the bill. For reasons that are hard to calculate, the Pentagon has refused to do this in the KBR case, despite my having urged several Secretaries of Defense to exercise this authority, and so the litigation continues with no end in sight. That is why I have filed amendment No. 4510 to the 2017 National Defense Authorization Act. The amendment directs the Department of Defense to exercise its contractual right to take over litigation for indemnified contractors in cases where the legal process runs more than 2 years. In doing so, it will bring the seemingly never-ending litigation to a timely resolution and save taxpayers from throwing good money after bad as the process drags on and on year after year.

The amendment isn't an attempt to relitigate the decision to indemnify contractors in the first place. What this commonsense amendment seeks to do is to make sure that the blank checks being picked up by taxpayers stop. This is critical because the government has an obligation to ensure that these legal bills don't cost the taxpayers any more than necessary, and certainly the American taxpayer does not need to be padding the pockets of the lawyers of the contractors.

I want to be clear: The amendment does not prejudice the outcome of the legal case in any way. It simply ensures that when the taxpayers pay the bill, the government that represents the American taxpayer is in control instead of a contractor's lawyer. It seems to me that the Senate owes that to the American taxpayer.

I urge my colleagues to support this amendment when it is considered later in the course of the day.

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