Iraq insurance program made millions for firms

[maddezmom]

The war in Iraq isn't the first U.S. war in which corruption has raised its ugly head. Harry Truman made his reputation in World War II by leading a congressional investigation into corruption and war profiteering at defense plants. But the war in Iraq has involved private contracting on a scale never seen before and it has apparently opened the door even wider to corruption and fraud and overcharging the government on an incredibly massive scale.

The latest eyebrow-raising example comes from a Democratic staff report from the House Oversight and Government Reform Committee. The report outlines a Pentagon program for providing workman's compensation for civilian employees in Iraq and Afghanistan that has allowed defense contractors and insurance companies to overcharge -- perhaps gouge is a better word -- the American taxpayers.

Insurance companies have collected nearly $600 million in excessive profits during the past five years, the report says. Still, the Defense Department refuses to adjust its approach for managing the program.

According to the House Oversight and Government Reform Committee, the Pentagon program allows its contractors in Iraq to negotiate their own insurance contracts even though these contracts are paid by the taxpayers. KBR Inc., one of the largest defense contractors in Iraq, paid the insurance giant AIG $284 million for medical and disability coverage under the Defense Base Act, the federal law mandating the insurance. Because of the way that KBR's contract is structured, this premium, along with an $8 million markup for KBR, comes out of the taxpayer's pocket.

more:http://www.caller.com/news/2008/may/17/iraq-insurance-program-made-millions-for-firms/