Whistleblower Files Suit Against Halliburton Co. & KBR

20140220-FG30000220-DOJOne of the nation’s largest government contractors requires employees seeking to report fraud to sign internal confidentiality statements barring them from speaking to anyone about their allegations, including government investigators and prosecutors, according to a complaint filed Wednesday and corporate documents obtained by The Washington Post.

Attorneys for a whistleblower suing Halliburton Co. and its former subsidiary, Kellogg Brown & Root, said the statements violate the federal False Claims Act and other laws designed to shield whistleblowers.

They filed a complaint with the Justice Department and the Securities and Exchange Commission, requesting an investigation and demanding that the confidentiality statements be turned over to federal authorities so allegations of fraud can be identified.

“The apparent purpose and intent of the confidentiality agreements was to vacuum up any potential adverse factual information, conceal it in locked file cabinets and gag those with first-hand knowledge from going outside the company,” Stephen M. Kohn, an attorney for the whistleblower, wrote in the complaint.

Mark E. Lowes, KBR’s vice president of litigation, said the confidentially statements are designed to protect the integrity of the internal review process, not to conceal information. He said that the company often receives unfounded complaints and that the process is designed to ensure those complaints are not publicly circulated. He also said KBR employees are encouraged to report allegations of wrongdoing. If those allegations are supported by the facts, he said, they are forwarded to the proper authorities.

Lowes said attorneys for the whistleblower in the fraud case are raising a false issue. “This is a desperate act to try to deflect people from the merits of the case,” he said. He said that KBR has filed court motions to dismiss the case and that he expected the motions to succeed.

A spokeswoman for Halliburton said that “the litigation involves alleged activity of KBR, which is now a completely separate company from Halliburton. Accordingly, we have no further comment on the matter.”

Halliburton, which owned KBR at the time of the alleged violations, remains a defendant in the lawsuit, court records show.

For years, Halliburton has been one of the biggest players in U.S. government and U.S. military contracting, and the company was headed by Richard B. Cheney before he became vice president. In 2006, Halliburton separated from Kellogg Brown & Root, which is now a stand-alone company known as KBR.