First Kuwaiti General Trading & Contracting Co.
In July 2005, First Kuwaiti was given the contract to build the new U.S. embassy in Baghdad, despite lacking experience in embassy construction and entering a bid that was $60 million higher than the lowest bidder. The embassy, already long past its completion due completion due date, will be the world’s biggest, and certainly the costliest. Former First Kuwaiti employees and State Department officials charge the project has been plagued by gross mismanagement, labor mistreatment and shoddy construction work. Cost overruns have raised its ultimate price tag from an original $550 million to upwards of $1 billion and still counting. But despite documented evidence of First Kuwaiti’s wrongdoing, State Department Inspector General Howard Kronguard continuously defended the company’s performance and thwarted investigations into the embassy project.First Kuwaiti was founded in 1996, and soon became a go-to subcontractor for Texas-based contractor Kellogg, Brown and Root (KBR), a Halliburton subsidiary. Since the Iraq war began, both Halliburton and KBR have been repeatedly found guilty of over-billing, bribery and outright fraud. The State Department handed the coveted embassy-construction management contract to First Kuwaiti in 2005, with KBR contracted to operate the facility.
In May 2007, State Department staffers in Iraq complained of “fairly serious problems” with First Kuwaiti’s performance. They reported that some of the company’s Baghdad officials had “extremely limited previous project management experience” and were responsible for “poor quality construction.” First Kuwaiti had recently completed a housing facility for the embassy’s security personnel, but the structure was shut down shortly after it opened. Problems included fuel leaks, dysfunctional appliances, toxic fumes and melted electrical wiring. First Kuwaiti had also apparently failed to provide enough spare parts for the embassy to maintain critical infrastructure such as water-treatment plants and power generators. Staff reports warned that the construction failures in the guards’ quarters were likely to appear in the adjacent main embassy building.
But Kronguard, the State Department Overseas Buildings Operations (OBO) and First Kuwaiti defended the quality of construction work in and around the embassy. First Kuwaiti claimed it had met “all specifications.” The company also cited an OBO official who said the guard-housing facility was “one of the better built camps” in the country, despite the fact that safety problems made it uninhabitable. The OBO office blamed KBR for the construction problems, instead of First Kuwaiti, and criticized State Department staffers for making their grievances public. In September 2007, a Congressional committee investigating U.S. contractors in Iraq blasted Kronguard for withholding documents and otherwise obstructing its probe into the embassy project.
Scrutiny of First Kuwaiti’s alleged labor abuses began in 2005, with reports that the company engaged in human trafficking. Workers from the Philippines, India, Nepal and elsewhere claimed the company lured themwith the promise of well-paying jobs in Dubai and Kuwait, but instead flew them to Baghdad and confiscated their passports. Once there, they were reportedly subjected to deplorable living and working conditions, grossly underpaid and barely provided anyhealthcare. Some claimed they were beaten by First Kuwaiti officials. And a number have filed kidnapping charges against the company.
When initial worker complaints were leaked to the press in 2005, company co-founder Wadih al-Absi called the charges “total bullshit” and “ludicrous.” (Al-Absi is also trying to secure a contract to build a new U.S. embassy in Saudi Arabia. His lawyer is Angela Styles, the one-time chief contract-policy advisor for the White House.) But in 2007, more workers stepped forward, and some testified against the company before Congress. One former American employee of First Kuwaiti said “I’ve never seen a project more fucked up. Every U.S. labor law was broken.”
Categories
International Finance | Homeland Security | Defense
Sources
- Kessler, Glenn. “Construction Woes Add to Hears at Embassy in Iraq.” Washington Post, July 5, 2007, A01.
- “Kuwait Company Denies Filipino Workers Taken to Iraq Without Their Consent to Work on U.S. Embassy.” Associated Press, August 12, 2007, http://www.ap.org.
- McDuffee, Allen. “Empire’s Architecture.” In These Times, January 2, 2008, http://www.inthesetimes.com.
- “New Embassy in Iraq a Mystery.” Associated Press, April 14, 2006, http://www.ap.org.
- Phinney, David. “A U.S. Fortress Rises in Baghdad: Asian Workers Trafficked to Build World’s Largest Embassy.” CorpWatch, October 17, 2006, http://www.corpwatch.org.
- Slavin, Barbara. “Giant U.S. Embassy Rising in Baghdad.” USA Today, April 19, 2006, http://www.usatoday.com.
- Strobel, Warren and Jonathan Landay. “Criminal Probe into U.S. Embassy in Iraq Construction.” McClatchy Newspapers, October 18, 2007, http://www.mcclatchydc.com.