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Oversight Hearing on US Embassy in Iraq

July 26, 2007

The Oversight Committee is currently holding a hearing, “Allegations of Waste, Fraud, and Abuse at the New U.S. Embassy in Iraq.” The hearing will examine the performance of the State Department and its contractors in the construction of the new $600 million U.S. embassy in Baghdad. The Committee will be reviewing questions regarding the embassy compound construction as well as allegations of labor abuse through improper contracting practices.

Watch the hearing live >>

Chairman Henry Waxman gives opening remarks:

Chairman Waxman:
“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 at 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.”

National Security and Foreign Affairs Subcommittee Chairman John Tierney gives opening remarks:

Chairman Tierney:
“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.”

Chairman Henry Waxman questions Karl Demming of KBR about what they found at the embassy:

Chairman Waxman:
“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 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, but 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.”

Rep. Elijah Cummings (MD-07) questions Karl Demming of KBR about “counterfeit wiring” found at the embassy, which contributed to a large-scale electrical meltdown:

Rep. Cummings: “On page 1 of this report it lists, quote ‘areas of concern,’ and it says this, quote: ‘one of the greatest areas of concern is the use of counterfeit..’ – counterfeit – ‘wire.’ Unquote. 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?”
Denning: “That’s correct, Mr. Congressman.”
Rep. Cummings: “Did you actually obtain samples of the counterfeit wire?”
Denning: “Yes, that is correct, Mr. Congressman.”
Rep. Cummings: “Now that word ‘countefeit,’ that’s a pretty strong word isn’t it?”
Denning: “Yes, it is.”

Delegate Eleanor Holmes Norton questions Karl Demming of KBR about photographs showing shoddy and dangerous electrical work at the embassy:

Delegate Holmes Norton: “Thank you, let's go to the next picture. Would you describe the problem there, the specific problem, in laymen's terms? What are we looking at, what's the problem in laymen's terms? What's the danger?”
Denning: “As you can see, the feet, and this receptacle is on the floor, improperly installed.”
Delegate Holmes Norton: “So the feet, that's where you plug — and what's the problem with that?”
Denning: “It's on the floor, installed improperly. It would be subject to water and moisture every time they clean the defect.”
Delegate Holmes Norton: “Who did this? Did KBR do this? Was it done prior to KBR arriving on the scene?”
Denning: “This was done during the construction of the BSF camp, not by KBR.”

John Owens, a former employee of First Kuwaiti Trading & Contracting Company, gives opening testimony:

John Owens:
“This was a man-camp, and by nature not the most pleasant of places to be. But the conditions were deplorable even beyond what a workng man should tolerate. Foreign workers were packed into trailers tight, with 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 twelve hours a day, seven days a week, with some time off on Friday for prayers. A few people from India told me they were making $240 a month…”

Rory Mayberry, a former subcontractor employee for First Kuwaiti Trading & Contracting Company, gives opening testimony:

Rory Mayberry:
“Mr. Chairman, when the airplane took off and the captain announced that we were heading 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 MP5 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 at the US Embassy… I’ve read the State Department Inspector General’s report on the construction of the embassy. Mr. Chairman, it’s not worth the paper it’s printed on. This is a cover-up and I’m glad that I’ve had the opportunity to set the record straight.”

Subcommittee Chairman Tierney questions Owens and Mayberry:

Chairman Tierney:
“Were you ever contacted by anyone who identified him or herself as a staff member of the State Department Inspector General?”

John Owens:
“No.”