Debt trap: for-profit colleges

One of the best articles I’ve seen recently on for-profit colleges. Please, please, please read this if you or anyone in your family is  thinking about a for-profit school.

From the trenches, we continue to pursue our class action against Le Cordon Bleu Portland (formerly known as Western Culinary Institute) and its parent, Career Education Corp. Consumer fraud class actions are difficult cases.

Best to avoid the damage in the first place by saying no to overpriced for-profit colleges.  Don’t let the slick marketing fool you; you’re often better off at a less-costly community college.

One more thing. To our leaders in Congress, your active oversight can fix this problem. But you need to do more than regulate for the future. A generation of students are effectively underwater for life because of lax regulation. Seems to me that you need to fix this problem.

Details emerge on KBR’s request for taxpayer bailuout

In today’s Oregonian, Julie Sullivan (aka “the one-woman wrecking crew”) reports here on emerging details of KBR’s request for a taxpayer bailout.  Short version is that as revealed by depositions taken in our Oregon Army National Guard toxic injury case, Bixby v. KBR, KBR won a special secret contract clause that requires the government to pay in the event of injuries or deaths.

Special thanks to Rep. Earl Blumenauer who pushed the Department of Defense on this issue.  Along with Sen. Wyden, Sen. Merkley and Rep. Schrader, Rep. Blumenauer has made it a point to take a hard look at these issues and provide critical assistance to our vets.  Members of the Oregon Congressional delegation have been fabulous.  Their hard work provides real comfort to the vets who stepped up to serve.

One question that occurs to me is whether that clause is enforceable if the vets in the Bixby case succeed in proving fraud by KBR. I don’t profess any particular expertise in this area. And even if I did, the details remain secret, so it’s likely impossible to know how that plays out.

As a taxpayer and as counsel for the sick vets, I’m steamed.  KBR already got paid billions for their work, and now they want a get-out-of-jail-free card so that they don’t have to pay for any consequences of their actions? Great plan.

“Does KBR have a secret get-out-of-court-free card?”

That’s the question posed in the title of this Mother Jones write up by reporter Kate Sheppard.  It’s a sharp article that focuses mostly on Rep. Earl Blumenauer’s (D. Or.)  great work asking the hard questions about the relationship between KBR and the U.S.  government.

The short answer to her question is not really. At least not a get-out-of-court-free card. The KBR defendants are in the case regardless of what happens as between the government and KBR. Still, they will try to evade financial responsibility by sticking the government with the bill. Those of us who actually pay taxes are right to think about that as a bail out of a wealthy defense contractor that has or had friends in high places.

The real question I think Ms. Sheppard meant to ask is this: Can KBR stick the government with the bill for claims made by vets who were exposed to sodium dichromate at the Qarmat Ali facility in Iraq? Yes, that’s a lousy headline, which is one more reason why I will keep my day job.

But still, it’s important to clarify that we push forward on the case against KBR regardless of what side-deals were made between KBR and the government. On some level the bailout deal between the government and KBR is a distraction.

The contours of that still-secret deal are important, of course, because we as citizens and taxpayers have a right to know when our government has foolishly agreed to indemnify a private contractor that received billions from the public treasury. That’s especially true where–as here–the original Project RIO (Restore Iraqi Oil) contract under which KBR worked was a multibillion dollar, cost-plus, no-bid contract that was offered, negotiated and signed in secrecy.

All that aside, my job is simply to move the soldiers case forward. In that respect, I am very much like the infantry soldiers that I represent. The soldiers’ legal team will do everything in its power to see that we have our day in court. And yes, as trial lawyers, I can admit that we are looking forward to this trial.  I welcome the opportunity for the story to be told here in Portland. Like a dog fixated on a ball or a bone, I am staring into the future when a jury will hear the evidence and decide the case.

And to that end, I leave tomorrow for Doha, Qatar where I will meet up with Mike Doyle, where we will take depositions of KBR witnesses. Mike will lead on the depositions. He’s got mad skills matched with an encyclopedic knowledge of the facts and relationships.  It’s a hoot working with Mike.  I imagine we’ll learn some things that matter.

David Sugerman

Reflections: What is at stake in our Oregon vets’ claims against KBR

Today’s Oregonian includes this thoughtful editorial about what is at stake in our on-going case against KBR for Oregon National Guard Soldiers. I have to agree with the editorial board that what is at issue is more than whether and how KBR will be required to repair the damage done.  In the case, we can only recover money. That money can only be used to fix what can be fixed,  to help where money can provide help, and to make up for all the losses that cannot be fixed or solved with help.

Still the case is wider and deeper and raises questions about war and contracting and profits.

The latest round of revelations indicate that the government agreed to indemnify KBR for financial losses it might incur as a result of its misconduct in performing work under the Project RIO contract.  If that sounds like gobbledygook, maybe it’s easier to explain this way. In addition to the multi-billion dollar payday, KBR wanted and got a taxpayer bailout for whatever harms might be caused by its misconduct.

The legal team representing the soldiers focuses on their needs. We have a court room and a trial. We are traveling around the world to find evidence and get our witnesses. We are digging through tens of thousands of pages of documents. We hold the line and fight KBR when it seeks immunity or special treatment.  At trial we will put on the evidence, make our arguments and then leave it to the jury to deliberate and decide.

Meanwhile, it is good that Oregonians are asking these questions. Better still, our journalists and thinkers and our Congressional delegation have their teeth into their respective parts of this tragedy. That is good as well, as no one wants our vets to go quietly into the night.

Addendum (2 Sept 2010): Here is a video report on KGW8 News that ran yesterday. Nice to see that Rep. Blumenauer is on this.  For those who say Congress does nothing, you better believe that the Oregon vets appreciate the efforts made by Sen. Wyden, Sen. Merkley, Rep. Blumenauer, and Rep. Schrader.

US Army refuses to disclose KBR indemnification agreement to Rep. Blumenauer

Rep. Earl Blumenauer (D. Or.) has done his part to get to the bottom of the sad story of Oregon National Guard soldiers exposed to toxic chemicals at the KBR Qarmat Ali facility. Rep. Blumenauer previously asked the Secretary of Defense to provide information about the agreements–both for KBR and other contractors.

In today’s Oregonian, Julie Sullivan reports here that the Army has refused to produce the information because it remains confidential. The response from the Army is a bit perplexing. The Project RIO contract, which was declassified, contains an indemnification provision. So I can’t help but wonder what is classified. Maybe there are other documents the Army is withholding?

It’s all a bit curious.

The soldiers appreciate Rep.  Blumenauer’s efforts. He is helping to get to the bottom of things.  He’s raising important questions about government contracts, and contractors and oversight.

For my part, I remain focused on KBR.  That’s my job.  Lots of work ahead to prepare for trial. But we’re on it.