Harry “Hap” Barko, Jr., a former contract administrator for KBR in Iraq, discovered that Halliburton/KBR and other contractors inflated the costs of construction services on military bases in Iraq. Mr. Barko, who was stationed at Camp Al Asad, discovered that KBR used a subcontract procedure which vastly inflated the costs of constructing laundry facilities and providing laundry services on at least three military bases.
Mr. Barko brought an action alleging National Defense Fraud – violations of the False Claims Act by Halliburton Company and its subcontractors.
Halliburton and the other defendants asked the court to dismiss the action against them. On July 8, 2013, the U.S. District Court District of Columbia ruled that Barko “provided a detailed description of the specific falsehoods that are the basis for his suit,” denied Halliburton’s request, and allowed the qui tam lawsuit to proceed.
While litigating against KBR he learned that KBR had a documented practice that forced all its employees with knowledge of fraud to sign non-disclosure agreements that threatened them with termination if they chose to reveal fraud allegations to anyone outside of KBR’s legal department. The SEC took enforcement action against KBR on April 1, 2015 and issued the first penalty against any company for attempting to silence a whistleblower. KBR was forced to pay a $130,000 penalty and agreed to cease this practice. The KBR enforcement action was widely applauded and served as the springboard for the series of related enforcement actions that followed.
Workplace secrecy agreements rising, whistleblower lawyers say
Court of Appeals August 11, 2015 Decision
United States ex rel. Barko v. Halliburton Co. et al., No. 1:05-CV-1276 (D.D.C.), March 11, 2014 order.
United States ex rel. Barko v. Halliburton Co. et al., No. 1:05-CV-1276 (D.D.C.), March 6, 2014 order.
United States ex rel. Barko v. Halliburton Co. et al, No. 1:05-CV-1276 (D.D.C.), December 18, 2014 order.
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