A federal judge last week ruled papers from an Iraq war contractor’s internal inquiry into an alleged kickback scheme aren’t protected by attorney-client privilege in a whistleblower’s lawsuit against the company.
“The documents will be a real-time picture of fraud against the government,” Michael Kohn, a lead attorney for whistleblower Harry Barko, told The National Law Journal.
Kohn said the 89 Code of Business Conduct documents will prove KBR Inc., with subcontractor Daoud & Partners Inc., double-billed for laundry services in Iraq, failed to build adequate “man camps” for workers and further violated its contract—bilking millions of dollars from the federal government.
U.S. District Judge James Gwin, days after his ruling, granted contractor KBR’s request for a stay. KBR’s lawyers at Vinson & Elkins have asked Gwin, sitting by designation in Washington federal district court, to reconsider his ruling.
“Because relator’s entire litigation strategy here turns on obtaining the privileged [Code of Business Conduct] documents, the remedy for an erroneously compelled disclosure may well be dismissing relator’s claims with prejudice or disqualifying relator’s counsel,” KBR’s attorneys wrote in their motion for reconsideration. KBR, formerly known as Kellogg Brown & Root, declined to comment.
In June, D.C. Circuit judges Thomas Griffith, Brett Kavanaugh and Sri Srinivasan overturned an earlier order from Gwin that had required KBR to disclose the documents to Barko’s attorneys.
The circuit court found the documents to be protected by the attorney-client privilege and remanded for further proceedings.
Gwin ruled KBR waived the attorney-client privilege in part because the company halted deposition testimony about the files but then “solicited conclusions” that the documents didn’t find fraud, according to court papers.
“KBR has placed the contents of the documents in question through its own actions; KBR has actively sought a positive inference in its favor based on what KBR claims the documents show,” Gwin wrote last week.
The U.S. Chamber of Commerce and the Association of Corporate Counsel filed a friend-of-the-court brief in March supporting KBR’s position in the D.C. Circuit. The business advocates said then that a ruling for the whistleblower would undermine the ability of companies to keep some corporate information confidential.