[Senate Hearing 111-747]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-747
 
                ACCOUNTABILITY FOR FOREIGN CONTRACTORS:
                  LIEUTENANT COLONEL DOMINIC ``ROCKY''
                  BARAGONA JUSTICE FOR AMERICAN HEROES
                       HARMED BY CONTRACTORS ACT

=======================================================================

                                HEARING

                               before the

              AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 18, 2009

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs




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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
JON TESTER, Montana                  ROBERT F. BENNETT, Utah
ROLAND W. BURRIS, Illinois
PAUL G. KIRK, JR., Massachusetts

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


              AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT

                       CLAIRE McCASKILL, Chairman
CARL LEVIN, Michigan                 ROBERT F. BENNETT, Utah
THOMAS R. CARPER, Delaware           SUSAN M. COLLINS, Maine
MARK L. PRYOR, Arkansas              TOM COBURN, Oklahoma
JON TESTER, Montana                  JOHN McCAIN, Arizona
PAUL G. KIRK, JR., Massachusetts     LINDSEY GRAHAM, South Carolina
                     Margaret Daum, Staff Director
                Molly Wilkinson, Minority Staff Director
                       Kelsey Stroud, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator McCaskill............................................     1
    Senator Bennett..............................................     3
    Senator Tester...............................................    16
Prepared statements:
    Senator McCaskill............................................    33
    Senator Bennett..............................................    38

                               WITNESSES
                      Wednesday, November 18, 2009

Hon. Tim Ryan, a Representative in Congress from the State of 
  Ohio...........................................................     6
Dominic Baragona, Father of Lieutenant Colonel Dominic ``Rocky'' 
  Baragona.......................................................     8
Scott Horton, Professor, Lecturer-in-Law, Columbia Law School....    11
Ralph G. Steinhardt, Professor of Law and International Affairs, 
  The George Washington University Law School....................    12
Tony West, Assistant Attorney General, Civil Division, U.S. 
  Department of Justice..........................................    19
Richard T. Ginman, Deputy Director for Program Acquisition and 
  Contingency Contracting, Defense Procurement and Acquisition 
  Policy (DPAP), Office of the Under Secretary of Defense for 
  Acquisition, Technology, and Logistics, U.S. Department of 
  Defense........................................................    20
Uldric I. Fiore, Jr., Suspension and Debarment Official, and 
  Director, Soldier and Family Legal Services, Office of the 
  Judge Advocate General, Department of the Army.................    22

                     Alphabetical List of Witnesses

Baragona, Dominic:
    Testimony....................................................     8
    Prepared statement with attachments..........................    40
Fiore, Uldric I. Jr.:
    Testimony....................................................    22
    Prepared statement...........................................    96
Ginman, Richard T.:
    Testimony....................................................    20
    Prepared statement...........................................    89
Horton, Scott:
    Testimony....................................................    11
    Prepared statement...........................................    60
Ryan, Hon. Tim:
    Testimony....................................................     6
Steinhardt, Ralph G.:
    Testimony....................................................    12
    Prepared statement...........................................    66
West, Tony:
    Testimony....................................................    19
    Prepared statement...........................................    81

                                APPENDIX

``Agencies Fail to Suspend or Debar Companies,'' Fact Sheet, 
  submitted by Senator McCaskill.................................    36
Responses to questions for the Record from:
    Mr. Horton...................................................   103
    Mr. Steinhardt...............................................   108
    Mr. West.....................................................   115
    Mr. Ginman...................................................   121
    Mr. Fiore....................................................   126
Brian A. Persico, Attorney, Procurement Fraud Branch, Department 
  of the Army, letter dated November 24, 2009....................   128


                       ACCOUNTABILITY FOR FOREIGN
                    CONTRACTORS: LIEUTENANT COLONEL
                   DOMINIC ``ROCKY'' BARAGONA JUSTICE
                     FOR AMERICAN HEROES HARMED BY
                            CONTRACTORS ACT

                              ----------                              


                      WEDNESDAY, NOVEMBER 18, 2009

                                   U.S. Senate,    
          Ad Hoc Subcommittee on Contracting Oversight,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:34 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Claire 
McCaskill, Chairman of the Subcommittee, presiding.
    Present: Senators McCaskill, Tester, and Bennett.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. Good afternoon. The Subcommittee on 
Contracting Oversight today is going to be looking at testimony 
and potential legislation surrounding accountability for 
foreign contractors. I want to thank everyone for being here 
today. Senator Bennett will be joining us. He is running a 
little late. I am going to go ahead and get started. With the 
permission of the witnesses, when he arrives I may interrupt 
you if you are in your testimony and give him an opportunity to 
make his opening statement on this important subject matter.
    Since the beginning of the wars in Iraq and Afghanistan, 
more than 5,000 American service members have been killed and 
more than 35,000 have been wounded. One of these brave 
Americans was Lieutenant Colonel Dominic ``Rocky'' Baragona.
    Lieutenant Colonel Baragona was killed in Iraq in 2003 when 
his vehicle was struck by a truck being driven by an employee 
of Kuwait and Gulf Link Transport Company (KGL). An Army 
investigation found the accident was caused by the KGL's 
driver.
    For 2 years, the Baragona family went to the Army, the 
Defense Department, and the White House to obtain information 
about their son's death and whether these officials intended to 
seek accountability. And for 2 years, the government did 
nothing.
    So in 2005, the Baragona family acted on its own and 
brought a lawsuit against KGL. The company refused to appear in 
the matter until after the court had entered a $4.9 million 
judgment against them. Only then did KGL enter the case, 
arguing that the court had no jurisdiction over the Kuwaiti 
company and that the lawsuit must be dismissed.
    In September 2006, 17 months after the Baragona family's 
suit began, and more than 3 years after the accident, the Army 
sent KGL the first of three letters asking for information 
about KGL's tactics in the litigation and other concerns. Each 
time, the relevant information was supplied to the Army by the 
Baragona family or their lawyers. KGL responded to each letter, 
and the Army took KGL's response at face value every time.
    This February, Uldric Fiore, the Army's suspension and 
debarment official, decided based on a review of ``the 
information available'' that he would not initiate any 
suspension or debarment proceedings against KGL. This May, 4 
years after the Baragona family brought their lawsuit, the 
court vacated its $4.9 million default judgment and dismissed 
the Baragona family's case for lack of jurisdiction over KGL.
    Today, more than 6 years after Rocky's death, the Baragona 
family is still waiting for justice. KGL has never admitted 
that their employee caused the accident. They have never paid a 
dime of compensation even though they were required as a 
contractor to the American Government to carry liability 
insurance. They have never even expressed condolences to the 
Baragona family for the loss of their son.
    Meanwhile, KGL has received millions of taxpayer dollars in 
subcontracts from major defense contractors like KBR, CSA, and 
IAP. According to information produced to the Subcommittee, KGL 
has received more than $200 million in new subcontracts since 
Lieutenant Colonel Baragona was killed.
    That is why I introduced the Lieutenant Colonel Dominic 
``Rocky'' Baragona Justice for American Heroes Harmed by 
Contractors Act in March of this year. Yesterday, the Ranking 
Member on the Subcommittee, Senator Bennett, the former acting 
Ranking Member, Senator Collins, and Senators Brown, Casey, 
LeMieux, Bill Nelson, and I reintroduced this legislation. This 
bill provides needed tools to ordinary Americans and the U.S. 
Government to hold foreign contractors accountable.
    First, the bill requires foreign entities who choose to 
enter--and I want to emphasize that--who ``choose'' to enter 
into contracts with the United States, it requires them to 
consent to personal jurisdiction in cases involving serious 
bodily injury, sexual assault, rape, and death.
    The bill also provides explicit authority under the Federal 
Acquisition Regulation for agencies to suspend or debar those 
companies who attempt to frustrate the legal process in these 
cases by failing to accept service or appear in court.
    The legislation that my fellow Senators and I reintroduced 
yesterday is a good first step, but the need for Congress to 
act with this legislation has raised serious questions for me 
about the systemic failures that have allowed companies like 
KGL to escape accountability for their actions.
    In April, the Subcommittee began an investigation of the 
suspension and debarment process. The Subcommittee's findings 
are summarized in a fact sheet that I am releasing today, and I 
ask unanimous consent that it be made part of the record.\1\
---------------------------------------------------------------------------
    \1\ The Fact Sheet submitted by Senator McCaskill appears in the 
Appendix on page 36.
---------------------------------------------------------------------------
    The Subcommittee has found that Federal agencies have only 
rarely used the suspension and debarment process to protect the 
government's interests. In fact, agencies have consistently 
failed to suspend or debar even those companies who have been 
convicted through the work of their own Inspectors General.
    For example, from 2004 through March 2009, the Defense 
Department Office of Inspector General reported 2,768 
convictions. The Defense Department suspended or debarred only 
708 individuals and companies.
    The State Department is the second largest Department 
responsible for contracting in Iraq and Afghanistan behind the 
Department of Defense (DOD), and in 2008, the State Department 
did not suspend or debar a single company.
    From 2005 to 2008, the Department of Homeland Security 
(DHS) awarded 325,000 contracts to 67,696 different contractors 
and debarred just four companies.
    In 2006, amidst widespread reports of waste, fraud, and 
abuse following Hurricane Katrina, DHS did not suspend or debar 
a single company.
    At today's hearing, we will hear from Lieutenant Colonel 
Baragona's father, Dominic Baragona, about his family's 
struggle to hold KGL accountable and how legislation like this 
could have helped him.
    We will also hear from two distinguished legal scholars 
about the gaps in the legal framework that this bill will help 
address.
    We will also hear from the Justice Department about its 
efforts to pursue accountability for foreign contractors and 
ask whether they have the tools they need to protect the U.S. 
Government and the men and women who bravely serve us in 
uniform.
    We will also ask our witnesses from the Defense Department 
and the Army tough questions about their suspension and 
debarment practices. And we will ask our witnesses what we need 
to ensure that Federal agencies aggressively protect the 
government and its citizens from irresponsible contractors.
    I thank our witnesses for being here today and look forward 
to their testimony, and I recognize the Ranking Member of this 
Subcommittee, Senator Bennett, for his statement.

              OPENING STATEMENT OF SENATOR BENNETT

    Senator Bennett. Thank you very much, Madam Chairman. Thank 
you for calling this hearing. It is interesting, perhaps 
poignant, that we are doing this in the month of November. We 
are about to reflect on Veterans Day when we talk about our 
veterans and the sacrifice they make for our country, 
particularly this November with the tragedy at Fort Hood, where 
a single act of brutality against our troops demonstrates once 
again that merely wearing the uniform of the United States puts 
one at risk.
    The life and service of Lieutenant Colonel ``Rocky'' 
Baragona stands as an example of those who are willing to take 
this risk and that the danger that comes from serving can come 
in places other than the battlefield itself.
    Now, following his commissioning at West Point, Colonel 
Baragona dedicated his life to being an officer in the U.S. 
Army. And in the early days of the war in Iraq, he commanded a 
maintenance battalion that ensured our soldiers had essential 
equipment and supplies necessary to fulfill their mission. And 
it was while he was fulfilling that duty, a very genuine duty 
even though it was not in combat, on a remote highway in Iraq 
that he was the victim of a negligent driver.
    Now, Colonel Baragona's father, Dominic Baragona, is here 
today with us as a witness to testify. I want to take this 
opportunity to offer my condolences to you, sir, and to your 
family on the loss of your son. I apologize.
    We were able to meet the last time you were here in town 
and talk about him as a person. I wish I had had the 
opportunity to meet him, but I got to know a little bit about 
him through your stories and your description. Again, my 
deepest sympathies.
    When our troops make this ultimate sacrifice, we as a 
Nation inherit their legacy of selflessness and of service and, 
most of all, of freedom. And as their beneficiaries, we owe the 
fallen and their families our best efforts to ensure that their 
sacrifice was not in vain and that fairness in contracting must 
be applied in all instances. And in some particularly egregious 
instances, justice should be served.
    Justice is owed to the Baragona family. It has not been 
found because the company that is liable for Rocky's death has 
refused to answer in any forum for the actions of its negligent 
driver. I do not hold them responsible for having a negligent 
driver because every organization runs that risk. But I do hold 
them responsible for not owning up to the consequences of what 
happened as a result of the actions of one of their employees.
    There are many facets to this case that go beyond just the 
Baragona experience, however, and, therefore, it justifies 
legislation of the kind that you have introduced.
    The company, Kuwait Gulf Link, has performed contracts for 
the Army and seeks to do it again. This is not a closed issue 
entirely in terms of the past. KGL, in avoiding answering for 
its negligence, has not only avoided the judgment of the 
Federal courts, but has managed to avoid the suspension and 
debarment process that would disqualify it from being a future 
contractor to the U.S. Government if the facts were fully 
aired, in my opinion. So to the outside observer, the outcome 
of the case and lack of consequences from the case are almost 
as abhorrent as the accident itself and demonstrate remedies 
that must be made to the system to see that it does not occur 
again.
    So this, which I cosponsor, is not in any sense anti-
contractor. I have said here in this Subcommittee and will 
continue to say that I believe that the decision on the part of 
the Defense Department to move to contractors in those areas 
that do not require the skills of a warfighter is a wise 
decision. But contractors, U.S. owned and operated--as well as 
foreign owned and operated--regardless of their location or 
ownership, must be held accountable for their actions and at 
the same standard. Foreign-owned contractors must be at the 
same standard as U.S.-owned contractors.
    This point is even more important in the hazardous areas 
because there the contractors are an extension of U.S. forces. 
And as such, the contractors in these cases must submit to the 
command, control, and communications of the U.S. military and, 
as they are working in concert with the U.S. military, they 
must be expected to answer for their actions to the United 
States, whether it be a military or civilian forum. They take 
on that obligation when they enter into an agreement with the 
U.S. Government.
    So, again, as a general principle, I am against any 
legislation or regulation that becomes a barrier for well-
intended contractors. Many well-intended regulations actually 
do that, and they result in worse contracting behavior, as they 
keep some of the good ones out.
    But this bill, therefore, is not a barrier to entry; it 
addresses future contracting behavior for a variety of reasons. 
It is strictly voluntary and does not impose excessive cost on 
either party. It is just an agreement up front as to what the 
rules will be if something goes wrong.
    The central remedy of the bill will ensure a consistent 
forum for civil cases in the most dire of circumstances, and 
the act of contracting parties voluntarily submitting to a 
designated forum is one that is well established in common law.
    So today's hearing, for which I thank you, Madam Chairman, 
convenes to examine some esoteric aspects of government 
contracting, civil law, and justice. And I am unburdened with a 
legal education, so I am here to be instructed by those who 
have that background. But we will examine legislation that 
seeks to remedy a gap that seems to exist in the command, 
control, and accountability of contractors that work for our 
military overseas. It is appropriate that the legislation bears 
the name of Lieutenant Colonel Rocky Baragona because of the 
sacrifice he made 6 years ago. And I hope that under the banner 
of his name we can move to see to it that justice will be 
available to any others who are unfortunate enough to have the 
same sort of circumstance occur to them.
    Thank you.
    Senator McCaskill. Thank you, Senator Bennett.
    I will introduce the witnesses now. I am going to skip 
Dominic, not because I do not want to tell about you and your 
wonderful family, but we are fortunate to have Representative 
Tim Ryan from Ohio, with us today, who has been by your 
family's side from the beginning of this ordeal, trying to be 
of assistance. And so I am not going to tell about you, and 
when it is time for you to testify, we will defer to 
Representative Ryan to do your introduction.
    Ralph Steinhardt is the Arthur Selwyn Miller Research 
Professor of Law and International Relations at The George 
Washington University Law School here in Washington. He is co-
founder and director of the program in international human 
rights law at New College, Oxford University. For 25 years, 
Professor Steinhardt has been active in the domestic litigation 
of international human rights norms, having represented pro 
bono various human rights organizations as well as individual 
human rights victims before all levels of the Federal 
judiciary, including the U.S. Supreme Court. He has also served 
as an expert witness in several cases testing the civil 
liability of multinational corporations for their complicity in 
human rights violations. He currently serves on the 
International Commission of Jurists' Expert Legal Panel on 
Corporate Complicity in International Crimes. He is also the 
founding Chairman of the Board of Directors of the Center for 
Justice and Accountability, an anti-impunity organization that 
specializes in litigation under the Alien Tort Statute.
    Scott Horton is an adjunct professor at Columbia Law School 
where he teaches law of armed conflict and international 
commercial law courses. He has served as chair of a number of 
committees at the Association of the Bar of the City of New 
York, including the Committee on International Law, and the 
Committee on International Human Rights. He currently serves on 
the association's task force on national security law issues. 
In 2007 and 2008, he managed the Project on Accountability of 
Private Military Contractors, a Human Rights First Project, 
leading to the publication of ``Private Security Contractors at 
War,'' a comprehensive study of legal accountability issues 
surrounding government contractors. He has also served as a 
legal affairs commentator for a number of network and cable 
news broadcasters and is a contributing editor covering legal 
and national security affairs for Harper's Magazine.
    It is the custom of the Subcommittee that we swear in all 
witnesses that appear before us, so if you do not mind, I would 
like the three of you to stand, and raise your right hand.
    Do you swear that the testimony you will give before the 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Baragona. I do.
    Mr. Horton. I do.
    Mr. Steinhardt. I do.
    Senator McCaskill. I want to thank all of the witnesses for 
being here today. We will use a timing system. We will ask you 
to try to hold your testimony to about 5 minutes, and your 
written testimony will be printed in the record in its 
entirety. And, with that, I will now turn to Representative Tim 
Ryan for the wonderful opportunity to represent and introduce 
Dominic Baragona and his family.

 TESTIMONY OF HON. TIM RYAN, A REPRESENTATIVE IN CONGRESS FROM 
                       THE STATE OF OHIO

    Mr. Ryan. Thank you, Senator McCaskill and Senator Bennett, 
for the opportunity. On a personal note, I just want to thank 
you for how much it has meant to the Baragona family. This has 
really been an American story with a cause by the parents and 
the sister to come up here and literally work Capitol Hill 
until they get a hearing in the U.S. Senate and legislation 
introduced, and it is a real testament to them and the fact 
that our system does work. And I want to thank you for that.
    It is my distinct pleasure to introduce to you Dominic 
Baragona, who will deliver a personal story regarding his son, 
Lieutenant Colonel ``Rocky'' Baragona of the U.S. Army, and the 
injustice surrounding the negligence of a company that 
continues to avoid responsibility.
    As you know, in 2003, Rocky Baragona was killed while 
serving our country in Iraq when his Humvee was struck by a 
supply truck driven by a Kuwaiti contractor. At the time, the 
company was under contract with the DOD to deliver supplies 
into Iraq. Near the end of his tour, as he was preparing to 
return home, Rocky was struck and killed.
    As the law now stands, U.S. citizens who have family 
members killed or harmed by foreign contractors working with 
the U.S. Government may not be able to bring those foreign 
contractors into a U.S. court to win justice for a wrongful 
death. This barrier to justice for American families is 
particularly worrisome for many reasons, among them the fact 
that these contractors are funded by us, the U.S. taxpayer.
    In light of this injustice and the perilous position in 
which it places the families of armed service members and other 
Americans pursuing our national interests, I draw to your 
attention Senator McCaskill's bill as well as our bill that we 
have introduced, that I have introduced in the House, H.R. 
2349, your bill's companion in the House.
    This legislation requires that all foreign and domestic 
contractors operating pursuant to a Federal contract consent to 
U.S. Federal court jurisdiction over disputes arising out of 
such contracts, including suits involving injury to American 
armed service members, government employees, and American 
citizen contract employees.
    Under the bill, for existing cases brought on or after 
September 11, 2001, contractors must consent to Federal 
jurisdiction as a condition of either entering into future 
contracts or receiving payments under current contracts. The 
legislation also provides for suspension and debarment of 
contractors for evading services of process and failure to 
answer for suits in U.S. Federal courts brought in relation to 
the performance of a Federal contract.
    Unfortunately, the Baragona case is by no means an isolated 
situation where a contractor headquartered abroad has acted in 
an egregious, fraudulent, or negligent manner. While few 
stories are as tragic as the Baragona case, there are many 
instances of impropriety. Such behavior is beyond egregious and 
must end. It is imperative that our legal system has unfettered 
reach in order to adjudicate such cases in our courts rather 
than allowing these companies to escape liability simply 
because they are headquartered abroad.
    My distinguished colleagues, this is about accountability. 
Foreign companies seeking American contracts paid by our tax 
dollars should be subject to the jurisdiction of our courts. If 
these companies seek our business, they can agree to appear in 
our courts, and it is that simple.
    Finally, the Baragona family will never completely recover 
from their tragic loss over 6 years ago. The family may, 
however, find solace in the knowledge that other families 
enduring similar circumstances will not face the particularly 
injustices they have been forced to endure since 2003. And, 
again, this family has taken the burdens of many other families 
here to Capitol Hill to have their voice heard, and it is just 
a wonderful, well-respected family back in Ohio, and Florida as 
well, and I want to thank you again and would like to introduce 
a hero in and of himself, along with his wife, Vilma, and their 
daughter, Pam, speaking on behalf of their son, Rocky, as well, 
Dominic Baragona.
    Mr. Baragona. Thank you.
    Senator McCaskill. Go ahead.

TESTIMONY OF DOMINIC BARAGONA,\1\ FATHER OF LIEUTENANT COLONEL 
                   DOMINIC ``ROCKY'' BARAGONA

    Mr. Baragona. Good afternoon, Senator McCaskill, Ranking 
Minority Member Senator Bennett, and Subcommittee Members. I 
ask that my full written statement be entered into the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Baragona with attachments appears 
in the Appendix on page 40.
---------------------------------------------------------------------------
    Behind me is my wife, Vilma, and our daughter, Pam.
    I want you to know I am scared to death. [Laughter.]
    Senator McCaskill. You have absolutely nothing to be 
worried about. You really don't. [Laughter.]
    Mr. Baragona. I hear this.
    Senator McCaskill, you said it all in your statement. I 
could just turn this in and not even have to go any further.
    Senator McCaskill. No. We want to hear from you.
    Mr. Baragona. There you go. Our son, Lieutenant Colonel 
Rocky Baragona, battalion commander of the 19th Maintenance 
Battalion, was killed in Iraq on May 19, 2003, when a tractor-
trailer truck owned and driven by Kuwait Gulf Link Transport 
careened across three lanes and crushed his Humvee.
    I am here to build a legacy in Rocky's life through the 
passage of this bill. If it becomes law, foreign contractors 
who do harm to any of our soldiers will be held responsible in 
the U.S. courts.
    Second, I want a real criminal investigation into my son's 
death, holding KGL responsible.
    I am kind of lucky, if you can say that. Just hours before 
Rocky got killed, I talked to him on a satellite phone. He 
said, ``Dad, I am on my way home, and I will be in Kuwait in a 
couple of hours.'' And I said to him, ``Hey, Rock, is there 
anything I got to worry about?'' He said, ``Not unless 
something stupid happens, Dad.''
    Well, the next morning two soldiers are standing in my back 
yard. I realized something stupid had happened. We were shocked 
to learn that Rocky had been killed in a civilian accident.
    A civilian accident? It was just beyond us. We had a 
million questions, but the casualty officer told us, ``Don't 
worry, Dominic.'' He said, ``The Army will answer all your 
questions. In fact, they will answer questions you have not 
even heard of.''
    So the next few weeks are like a blur to us, between 
memorials in our home town, Fort Sill, and finally, Rocky's 
burial at Arlington National Cemetery.
    By December, the report is delivered, 2 days before 
Christmas, what would be our first Christmas without the Rock. 
Our family felt the report, which had been approved by General 
Sanchez, was terrible. For one thing, it had no information 
about the driver or the name of the company. It gave a false 
impression of how Rock had died. The pictures they give us are 
just grainy xeroxed copies. You couldn't see nothing. Key 
personnel were missing. Direct statements were omitted. As a 
result, we demanded a second investigation with a written 
statement of questions from my family to be answered.
    The colonel, Rocky's commanding officer, gave us a little 
hint on who the company was by saying, ``Dominic, I saw the 
original pictures, and they got `KGL' written, and the color of 
the truck is orange.'' Well, with the wonderful Internet we 
have today, we hold our own investigation and learned that the 
name of the company responsible for Rocky's death was Kuwait 
Gulf Link Transport, a multi-million-dollar DOD contractor.
    We couldn't get nothing done. We decided we needed to 
contact Ohio Senator DeWine to help us with the Army report and 
contacting KGL.
    Senator DeWine said, ``Dominic, let me handle this.'' He 
said, ``You know what? This company wouldn't be in existence 
today if we had not gone to the Gulf War and saved that 
company. They will do the right thing. I am going to write a 
letter to the Kuwaiti Ambassador, and they will straighten this 
company right out.'' Well, needless to say, he got rebuffed.
    He met with the Kuwaiti Prime Minister who tells him, ``The 
Baragona family has to go to Iraq. That is where the accident 
happened, and they have got great courts there. They will solve 
the whole thing. Don't worry about it.''
    I couldn't help but think--but here we are, we liberated 
this country, and this company is going to get away with this? 
Anyhow, by the summer of 2004, Kuwait Gulf Link gained national 
attention by paying ransom money to terrorists for the release 
of their employees kidnapped in Iraq. CNN videos of the 
drivers--shows drivers complaining about KGL forcing them to 
work for U.S. forces by taking away their passports.
    We also learned that KGL was banned in India for the 
recruitment scams and forced labor--the point being they were 
known human traffickers with human rights violations.
    In January 2005, the second report was finally delivered to 
Senator DeWine's office by Brigadier General Wright. The first 
thing the general says to us is, ``This company has no 
contracts with the Army. Not only that,'' he says, ``they have 
immunity.'' And I was trying to figure out whose side the 
general was on. I said we just could not fathom that. In fact, 
not to embarrass them, our lawyers whispered their name in 
their ear saying, ``Hey, this company has got millions of 
dollars worth of contracts with DOD.''
    This report was also flawed, but the new pictures showed 
the truck has no license plates, and the driver's passport with 
no commercial driver's license. And yet we couldn't figure 
out--the Army wouldn't do no criminal investigation with just 
that evidence alone. And Rock was a battalion commander.
    Well, you won't believe this next story. In February 2005, 
our daughter has a chance meeting with President Bush and asked 
him for his help. The first thing the President said is, ``How 
are your parents doing?'' President Bush literally initiates a 
debarment inquiry and the DOD issued a show cause letter to KGL 
citing bad behavior. KGL responded to the President's request 
by hiring retired Brigadier General Richard Bednar, an ex-DOD 
debarment chief, who held off-the-record conversations with DOD 
officials, and the case come to a stop, the show cause letter.
    I couldn't believe this so I had Brian Persico, who was in 
charge of the Army's suspension and debarment office. I had his 
number. I give him a call. I said, ``I want to know how this 
show cause letter just came to an end like this. My God, we got 
the President behind us. How high do we have to go?''
    Let me tell you what he tells me. Well, I asked him about 
General Bednar and his conversation. He said, ``If he moved the 
debarment forward, his career would come to an end.'' I went, 
``Wow.'' I said, ``Is it possible that a KGL lawyer can trump 
the President and kill the debarment inquiry?'' It was scary.
    So we pursued justice through the court since we had no 
admission by KGL and its negligence and no criminal 
investigation. KGL responds to the lawsuit by ignoring the 
court, not even bothering to show up. Well, it kind of made it 
a little bit easier for us to win if it was just one-sided. So 
the judge awards us $5 million. Well, 30 seconds later, the KGL 
attorneys ask the court to vacate the judgment for lack of 
jurisdiction.
    Well, we always felt there was a weak case there. Judge 
Duffey ultimately rules in their favor, but he blasted KGL on 
their bad behavior.
    We spent the worst days since the funeral watching KGL 
executives and lawyers giving high-fives after the judge's 
ruling. Since then, we have appealed the ruling.
    Our personal investigation found KGL continues forced labor 
practices and, in February 2008, was responsible for killing 
another soldier. This is a company that is supposed to have 
insurance with DOD for just such instances, but somehow manages 
never to pay when found guilty of negligence.
    It has really greatly disappointed our family that the Army 
did not take care of the Rock and investigate anything unless 
we pushed them to do it. You know what? We love the Army. We 
have two sons who graduated from West Point. We have a grandson 
nominated by Senator McCain to the Naval Academy. He goes to 
Iraq next month. I am a Korean War veteran. Our hearts bleed 
for the survivors of the Fort Hood families. We know how they 
felt during the final roll call. We were there.
    Today, we are grateful for Senator McCaskill's bill, though 
it may not necessarily help our case. We just want to make sure 
that it does not happen again to other families. Just level the 
playing field between U.S. and foreign contractors. After this 
bill passes, the Wild West of contracting for foreigners will 
be over.
    Senator McCaskill and Senator Bennett sent a bipartisan 
letter to Secretary Robert Gates showing concerns that a 
company under investigation by the Senate Subcommittee could be 
awarded a multi-million-dollar food contract. And then we also 
appreciate letters from Representative Ryan and Representative 
Driehaus, who wrote a letter to the Department of Justice 
demanding a real investigation into KGL's misconduct.
    Vilma, Pam, and I, we cannot thank everybody enough for 
trying to help us. For 6 years, we have walked these halls with 
our brownies and our hot peppers, and are exhausted. We have 
worked with three branches of the government for justice, and 
here we are today. Only in America.
    Thank you.
    Senator McCaskill. Thank you so much, Mr. Baragona. And 
please convey to the rest of your children that we send our 
condolence for the loss of their brother because I know that 
you and your wife had seven children, including Rocky. So a big 
family, worked hard, the American dream, and I know that 
Senator Bennett and I are going to work as hard as we know how 
to get this law passed in your son's name.
    Mr. Baragona. Thank you.
    Senator McCaskill. We will now turn to the testimony of 
Professor Scott Horton.

   TESTIMONY OF SCOTT HORTON,\1\ PROFESSOR, LECTURER-IN-LAW, 
                      COLUMBIA LAW SCHOOL

    Mr. Horton. Chairman McCaskill and Ranking Minority Member 
Bennett, I am really moved by the testimony we have just heard 
from Mr. Baragona about this case. It is a clear miscarriage of 
justice, and I, therefore, feel honored to be able to offer 
some remarks in support of this legislation.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Horton appears in the Appendix on 
page 60.
---------------------------------------------------------------------------
    I think it is a significant piece of legislation that will 
close an important jurisdictional gap that exists for Federal 
courts and allow them to adjudicate claims that arise from 
serious misconduct involving U.S. Government contractors, which 
now appears to be beyond their jurisdiction.
    I want to say at the outset that talking about 
accountability and accountability measures for contractors is 
not intended to be criticism or disparagement of contractors. 
In fact, it would be impossible for us to perform the 
contingency missions we have overseas without those 
contractors. They play key roles in protecting American 
soldiers overseas, and frequently they put their own lives at 
risk. But, nevertheless, it is inappropriate for them to 
operate without accountability. Accountability is necessary for 
safety, and it is essential to upholding basic norms of the 
rule of law.
    One of the questions that Congress has to look at is 
whether or not it has created the correct framework for this 
accountability to occur. Well, I want to suggest that there has 
been a change in the way the United States has approached this 
issue over the last couple of decades that justifies these 
changes.
    The United States has relied much more heavily on 
contractors in connection with these contingency operations, 
and taking this change into account, the United States has also 
adopted a much more aggressive posture on the negotiation of 
Status of Forces Agreements around the world, seeking higher 
levels of immunity from the law of host governments.
    Well, whenever it does so and it takes away the 
jurisdiction of the U.S. Government, which, in fact, is what 
happened in the case where you talked about the Kuwaiti 
Ambassador who told you, ``Bring it to the courts of Iraq.'' 
Actually, you could not bring this matter in the courts of Iraq 
because of Order No. 17, which we had issued--it was issued by 
Paul Bremer in July 2004--that exempted exactly this sort of 
issue from the jurisdiction of Iraqi courts.
    Now, when that happens, it is very important that the 
United States step in and expand its own jurisdiction so that 
there is no vacuum. In fact, I think that is something 
axiomatic. If the United States says the host country does not 
have jurisdiction, the United States has to supply its own 
jurisdiction. And, moreover, this is an area where the United 
States clearly has both the right and the responsibility to do 
that.
    Well, one obvious question that arises from this litigation 
is whether or not it is constitutional to do so, because, of 
course, the district court judge here applying the 
International Shoe Doctrine concluded that there was a lack of 
sufficient minimum contacts with the jurisdiction to warrant 
that. And my answer to that question is clearly yes. The 
legislation approaches this on the basis of consent. Consent 
provides a completely adequate basis for the exercise of this 
jurisdiction, notwithstanding the Fourteenth Amendment's 
limitations that apply minimum contacts.
    But even beyond that, there is an entirely separate area 
here which Senator Bennett alluded to in his remarks, and that 
is, the U.S. law of armed conflict jurisdiction. When 
contractors are brought in in connection with a contingency 
operation beyond the territory of the United States, the United 
States has the power to expand the jurisdiction of its courts 
to address those situations. That is something that has been 
recognized since the Constitution. It is implicit in the power 
that is given to Congress to define the law of nations. And, in 
fact, as that phrase was originally used at the time of the 
enactment of the Constitution, that comprehended little beyond 
this law of armed conflict norm.
    I would like to just note as well that the contracts, in 
order to implement this properly, probably need to address a 
couple of other things not dealt with in specificity in the 
legislation, but probably would be appropriate for the 
contracting officer to deal with. That is the venue of the 
court that would handle the case, and also a provision in the 
contract that would provide that third-party beneficiaries 
would be able to use it and, finally, more detailed notice 
provisions. Thank you.
    Senator McCaskill. Thank you, Professor Horton, for being 
here, and we will look forward to some questions.
    Professor Steinhardt.

   TESTIMONY OF RALPH G. STEINHARDT,\1\ PROFESSOR OF LAW AND 
  INTERNATIONAL AFFAIRS, THE GEORGE WASHINGTON UNIVERSITY LAW 
                             SCHOOL

    Mr. Steinhardt. Madam Chairman McCaskill, Ranking Minority 
Member Bennett, and Members of the Subcommittee, I am extremely 
grateful for the opportunity to testify today and to pay 
tribute to the Baragona family. I would like to emphasize just 
a few points from my written testimony and then respond to any 
questions.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Steinhardt appears in the 
Appendix on page 66.
---------------------------------------------------------------------------
    It is safe to say that this legislation is a welcome 
bipartisan response to an injustice. It is a response to a 
particular case, but as Senator Bennett suggested in his 
statement, the importance of this legislation goes well beyond 
that one lawsuit.
    The problem of government contractors' accountability takes 
many forms, including not only the kinds of torts that are at 
the heart of the Baragona case, but also in some rare but high-
profile cases, human rights abuses that undermine the 
credibility of the United States, that contradict its values, 
and potentially empower our enemies.
    This proposed legislation, it seems to me, is one step 
towards assuring a measure of accountability whenever foreign 
businesses enter into contracts with the U.S. Government and, 
most importantly, levels the playing field between U.S. 
corporations and foreign corporations.
    In my written testimony, I describe the likely trajectory 
of lawsuits under this legislation with particular emphasis on 
the constitutional and international law issues that may arise 
and that supporters of the legislation need to anticipate. I 
also offer some modest suggestions for improving the reach and 
the reliability of the legislation. In the interest of making 
the legislation as strong as possible, let me just anticipate 
what some of those issues are likely to be.
    Specifically, and in a nutshell, the legislation offers a 
statutory solution to a constitutional problem, and it offers a 
domestic solution to an international problem. It also 
addresses issues that arise at the beginning of the 
litigation--notably, jurisdiction and service--but it does not 
address the range of obstacles that can derail transnational 
litigation at a later stage.
    One of the occupational hazards of being a law professor, 
other than faculty meetings and paper cuts, is that sometimes 
we get lost in the doctrine and the theory, so let me be plain.
    A constitutional concern. There is no question that 
Congress has constitutional authority over government 
contracts. That is easy. There is no question that you could 
require a bond of government contractors to assure that there 
is a compensation fund for future plaintiffs in Mr. Baragona's 
circumstances. The harder case is that under the Supreme 
Court's decision in International Shoe that Professor Horton 
mentioned, the courts will have to determine in every case, 
case by case, whether the particular defendant has certain 
minimum contacts with the forum or not.
    Congress cannot legislate a one-size-fits-all legislative 
answer to that constitutional question. Requiring a waiver of 
personal jurisdiction objections as a precondition for doing 
business with the government is an attractive approach, but it 
will be challenged as an unconstitutional condition. That is, 
there are many government privileges like contracting or 
driver's licenses that cannot be subject to advance waivers of 
certain due process or fairness rights. I think that there are 
arguments that we should anticipate for getting around the 
unconstitutional conditions doctrine, but they have to be 
acknowledged and not ignored. The same is true with respect to 
service.
    Second, and turning briefly from the constitutional to the 
international issues, the proposed legislation addresses an 
international problem, and international law, including the 
treaties of the United States, will not be irrelevant. The most 
significant international issue arises under the Hague Service 
Convention, as the Baragonas discovered, to their dismay. I, 
too, have come up against the constraints of the treaty in 
practice. I have criticized the treaty in print and in 
testimony before the House of Representatives. I am fully 
familiar with the logistical obstacles that the Hague Service 
Convention represents, but, again, this may not be an area in 
which we can simply legislate our way out of the box. Every one 
of this Nation's major trading partners is a party to the Hague 
Service Convention, including Canada, China, Japan, Korea, 
Mexico, the United Kingdom, and almost every member of the 
European Union. They are unlikely to go away quietly if this 
legislation is construed as an effort to render that Hague 
Service Convention irrelevant.
    Let me just also briefly mention that there are certain 
practical considerations that have to be taken into account 
here. Defendants from countries that are parties to the Hague 
Service Convention will almost certainly insist on compliance 
with the treaty to the letter, and that is significant because 
when the judgments are taken from an American court to where 
the assets are likely to be--namely, one of the reasons that 
the courts in foreign countries resist U.S. judgments is that 
service has not been done in accordance with the treaty.
    There are other issues, of course: Choice of law, forum non 
conveniens, and enforcement of judgments. In my written 
testimony, I also describe the Alien Tort Statute. But, again, 
let me express my gratitude for the opportunity to testify 
today.
    Senator McCaskill. Thank you, and we welcome Senator Tester 
to the Subcommittee.
    I have to be honest with the professors on the panel. I am 
burdened with a legal education, and there for a minute I 
started thinking I should start taking notes---- [Laughter.]
    That I might have to write on this subject matter. And it 
is complicated, and we do want your help, and that is why we 
have asked you to come here today.
    Let me ask you, Professor Steinhardt, as it relates to the 
waiver of personal jurisdiction objections as a precondition of 
contracting with the Federal Government. Can you address the 
court's decision in Insurance Corporation of Ireland v.--I 
think it is--I do not know how to say this in French. I am not 
French. I am going to say it like we would say it in the 
Midwest--Compagnie des Bauxites de Guinee, that personal 
jurisdiction is an individual constitutional right, like other 
rights, may be waived.
    Is there anything else we need to do in this legislation to 
assure that we could fall under the aegis of that Supreme Court 
decision, that is, a waiver in advance to submit to the 
jurisdiction of the court and, therefore, avoid the 
constitutional problems that you delineated?
    Mr. Steinhardt. Absolutely right, Senator McCaskill. There 
is that dictum in the insurance company case. The difficulty is 
whether the waiver of due process rights is voluntary or 
statutorily directed, and that is what is going to trigger the 
unconstitutional conditions doctrine.
    I am not saying that those who challenge this legislation 
will necessarily win on the unconstitutional conditions 
doctrine, but if the government confers a benefit with 
conditions, and in particular the condition that parties 
relinquish a constitutional right, that triggers the 
unconstitutional conditions doctrine. The next step is to ask: 
Is there a substantial relationship, what the courts have 
called an essential nexus, between the benefit conferred and 
the condition that is imposed?
    I think that if the Senate and the House of Representatives 
found as a matter of fact that there was a connection between 
the performance of the contract and the submission to liability 
litigation in the United States, then that is likely to satisfy 
this essential nexus test. But we should not oversimplify it or 
think that it is just going to go away.
    So the general principle that you can waive these rights is 
absolutely correct. But if you are forced to do so in a way 
that triggers the unconstitutional conditions doctrine, there 
will be difficulty.
    Senator McCaskill. Well, I certainly understand the point 
you are making. I just have to think that if we pass this law, 
the nexus of a company wanting to do business with our country, 
especially within the context of the military in a contingency 
operation, that level playing field that everyone referenced in 
their testimonies, I would think that there would be some 
compelling--as I think I remember from law school, the weighing 
tests. I think that on that weighing test you are going to get 
a thumb on the scale on the side of accountability as it 
relates to these foreign contractors. Am I off base on that?
    Mr. Steinhardt. I do not think you are off base. I just do 
not think we can necessarily predict that the courts will 
automatically do the right thing in that regard, and that is 
why the sense of Congress, the finding by the Senate that 
liability is an essential part of the actual performance of the 
contract or the leveling of the playing field I think goes a 
long way towards assuring that the unconstitutional conditions 
doctrine will not be an obstacle.
    Senator McCaskill. Let us talk about the Hague Service 
Convention. What is your suggestion on service of process? The 
two of you with your knowledge of legal actions on an 
international platform, if you were writing this legislation, 
what suggestions would you give us to strengthen the process 
piece of this? I certainly get when it comes time, it does 
not--frankly, even if this company had not been such a coward 
and refused to ever step up and even speak to you about their 
negligence, Mr. Baragona, enforcing the judgment at a bank, as 
you referenced, could get really tricky if the lawyers start 
talking about the validity of process.
    What advice can you give us of any tweaking we can do to 
the language in this legislation that would strengthen the 
process part as it relates to the Hague Service Convention? 
Professor Horton.
    Mr. Horton. Well, I know that the notice provisions are 
particularly important for this purpose, and in the 
sophisticated commercial contract that is an international 
contract, it is quite conventional not only to have 
specification of the law and the forum for the resolution of 
disputes, but also to have a designation of an agent for 
service of process. And if you want to anchor that to a 
jurisdiction in the United States, have an agent for the 
service of process designated at the jurisdiction that you have 
also specified for litigation, I think that really makes it 
much easier, and it shows within the four corners of the 
contract that this issue has been given thorough consideration 
and extraordinary steps have been taken by the contract 
counterparty to do this.
    I agree with the general analysis that Professor Steinhardt 
has laid out. I think generally when we are talking about 
government procurement contracts, where it is a free and open 
process and a company participating has made the election to 
participate, to qualify, and bid, that these choices will be 
made in the context of the contractors, nothing coerced about 
it. That would be respected, I think, by a Federal court.
    There are other situations, particularly in wartime, 
certainly we saw circumstances in the 19th Century when 
military forces would commandeer--they would require or levy 
services from a local agent in terms of provisioning, yes, that 
would produce some problem in this regard. But not the sort of 
procurement that we are talking about here in connection with 
the war on terror.
    Senator McCaskill. Right. We are begging them--they are 
begging us to hire them.
    Mr. Horton. Exactly right.
    Senator McCaskill. I do not know how in that context we are 
going to fall under a huge problem of coercion. Nobody is 
putting a gun to their head. They are working very hard to get 
our business, and I think as a piece of that, they should be 
responsible for their actions, and especially as it relates to 
our men and women in uniform.
    Senator Bennett.
    Senator Bennett. I am sufficiently impressed with your 
legal background that I will pass. [Laughter.]
    Senator McCaskill. All right. Senator Tester.
    Senator Tester. I can ask some questions, but it has no 
reflection on your legal background. [Laughter.]
    Senator McCaskill. That is a good thing.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Mr. Baragona, I want to thank you for 
testifying here today. I apologize for not getting here earlier 
for the entire panel, but I do understand that you did a fine 
job, and I certainly want to express my condolences to you and 
your family on your tragic loss.
    This is a question for any one of the three who can answer 
it. How pervasive is the problem of foreign contractors killing 
or injuring American service members or American civilians? 
Does anybody know the answer to that?
    It would be good to have the numbers on that. One is too 
many, but it would be good to have the numbers.
    A question for the legal team. Do the contractors in 
Afghanistan have the same kind of immunity that they did in 
Iraq?
    Mr. Steinhardt. That is a completely opaque issue right now 
because the immunity was created--and there is a diplomatic 
note, which we have reproduced here, between the U.S. Embassy 
and the Afghan government that talks about levels of immunity 
that the United States is proposing. The United States also has 
proposed a Status of Forces Agreement which would give immunity 
to contractors. The Afghan government has essentially not 
agreed to this, so we are at something of a standoff on this 
immunity issue, and we do not have something like Order No. 17 
which, clearly, effectively codifies the immunity.
    Senator Tester. So the question is what you just said, that 
there is immunity for contractors that injure or kill American 
servicemen or civilians? Is that what they are advocating for?
    Mr. Steinhardt. Immunity.
    Mr. Horton. I think it is a consequence of positions that 
the United States has taken, but let me go back and say Order 
No. 17 said effectively they are immune from process under 
local law. That means that in Iraq no one can bring a 
contractor into a court other than Iraqi contractors--they were 
fair game--but not a Kuwaiti contractor, for instance, on 
account of wrongful death, rape, even murder, I mean, even an 
intentional crime they were immune. That is right. Of course, 
there was a major question as to how far the United States had 
gone in filling that void with assertion of U.S. jurisdiction. 
We have the Military Extraterritorial Jurisdiction Act and a 
couple of other pieces of legislation. The Uniform Code of 
Military Justice also was revised in December 2006 to create 
some basis of jurisdiction. We had no actual practice of 
enforcing that by the Department of Justice during that period. 
We had one single prosecution of a contractor coming out of 
Afghanistan up until the end of 2007. So it is only quite 
recently that our Justice Department has begun to step in and 
deal with these cases.
    Mr. Steinhardt. Could I just add to that? Even if immunity 
were overcome by legislation or otherwise, there would still be 
a significant legal issue with the state secrets privilege. 
Many of these government contractors would be able successfully 
to invoke the state secrets privilege in circumstances that I 
suspect many Members of Congress would disapprove of.
    Senator Tester. So let me get this straight, if I might, 
and please do correct me if I am wrong, because I hope I am.
    We have a situation in Afghanistan right now where, if a 
contractor is negligent, kills or injures somebody, there is no 
recourse.
    Mr. Horton. Well, I was talking about immunity from the 
local courts. Then we have the question of whether there is 
immunity, whether there is a basis to go after that contractor 
in the United States, and on that we have a lot of very 
contentious litigation going on right now with contractors 
successfully asserting immunity under different doctrines in 
some cases, but also being held accountable in other cases. So 
it is a very complex picture.
    Generally they will attempt to argue that they are under 
the authority of the command there, and, therefore, they should 
have the same immunity that the military has, and they have 
gotten split verdicts on that question so far.
    Mr. Steinhardt. Usually under the Alien Tort Statute.
    Senator Tester. All right. And the contractors, of course, 
the ones we are talking about, are paid for by the American 
taxpayer.
    Mr. Steinhardt. Correct.
    Senator Tester. OK. Thank you very much.
    Senator McCaskill. Definitely we have work to do.
    I want to thank all three of you for your appearance today. 
Particularly I want to thank the Baragona family.
    The staff of this Subcommittee has done great work for this 
hearing, and when legislation gets passed, there is a moment on 
the floor where the sponsoring Senators thank the staffs of 
various committees. But many times the work that staff does day 
in and day out is taking the time to sit, to listen, to 
understand, and I have a man on my staff, Stephen Hedger, who 
is a West Point graduate, who decided after he met the Baragona 
family that he was not going to let me rest until I did 
something about Rocky Baragona's death. As a fellow West Point 
graduate--and he is now the Legislative Director in my office, 
so he has some elbows to throw around about what the priorities 
are. And I want to thank Mr. Hedger for his dedication to your 
family and to Rocky's memory. Thank you all for being here 
today.
    [Applause.]
    Senator McCaskill. And he loves your brownies. [Laughter.]
    If the second panel of witnesses will come forward, please. 
Thank you for being here today.
    First, Tony West was nominated by President Barack Obama to 
be the Assistant Attorney General for the Justice Department's 
Civil Division on January 22, 2009. He was confirmed by the 
Senate on April 20, 2009. From 1993 to 1994, he has served as a 
special assistant in the Justice Department. From 1994 to 1999, 
he served as Assistant U.S. Attorney for the Northern District 
of California. He later served as Special Assistant Attorney 
General, an appointee of California Attorney General Bill 
Lockyer. Prior to his return to the Justice Department, Mr. 
West was a litigation partner at Morrison and Foerster in San 
Francisco.
    Richard Ginman assumed the position of Deputy Director for 
Program Acquisition and Contingency Contracting, Defense 
Procurement and Acquisition Policy, in May 2007. In February 
2008, he assumed the position of Principal Deputy to the 
Director of DPAP. In that capacity he is the principal adviser 
to the Director for all contracting and procurement policy 
areas. Mr. Ginman has more than 37 years of experience in 
government and commercial business in the fields of 
contracting, acquisition management, logistics, and financial 
management. Mr. Ginman was commissioned an ensign in the Supply 
Corps of the U.S. Navy in 1970 and retired as a rear admiral in 
2000.
    Uldric Fiore was selected as the Army's suspension and 
debarment official in October 2008. He has also served as the 
Director of Soldier and Family Legal Services for the Army 
Office of Judge Advocate General since July 2008. He formerly 
served as General Counsel for the Department of Defense Office 
of Inspector General from May 2005 until July 2008. He retired 
at the rank of colonel following 30 years of service, including 
25 years in the Judge Advocate General Corps.
    It is the custom of this Subcommittee to swear all 
witnesses that appear before us, so if you do not mind, I would 
ask you to stand and raise your right hand.
    Do you swear that the testimony that you will give to the 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. West. I do.
    Mr. Ginman. I do.
    Mr. Fiore. I do.
    Senator McCaskill. Thank you so much. We would ask you to 
try to keep your testimony to 5 minutes, and we will be happy 
to put your entire statements in the record as part of today's 
hearing.
    We will turn first to Tony West from the Department of 
Justice.

 TESTIMONY OF TONY WEST,\1\ ASSISTANT ATTORNEY GENERAL, CIVIL 
              DIVISION, U.S. DEPARTMENT OF JUSTICE

    Mr. West. Thank you, Madam Chairman, Ranking Minority 
Member Bennett, and distinguished Members of the Committee. I 
appreciate the opportunity to appear before you today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. West appears in the Appendix on 
page 81.
---------------------------------------------------------------------------
    Let me say at the outset that we, at the Department of 
Justice, greatly appreciate this Subcommittee's attention to 
this issue, and we support your efforts to ensure that our 
servicemen and servicewomen and their families have recourse to 
our Federal courts.
    Let me also express the Department's condolences to the 
Baragona family and express our gratitude to them both for the 
brave and honorable service of their son and for their 
perseverance to help turn the tragedy of his death into a 
legislative legacy that will ease the pain of other military 
families who may find themselves faced with the same road 
blocks.
    Now, as has been noted, S. 526, named for Lieutenant 
Colonel ``Rocky'' Baragona, was introduced to address the 
challenges faced by them in trying to establish personal 
jurisdiction in a U.S. court for the wrongful death of their 
son. Lieutenant Colonel Baragona's family pursued justice by 
suing the foreign contractor whose employee was involved in 
that accident, but that lawsuit was dismissed when the court 
held that it had no personal jurisdiction over the contractor.
    S. 526 would change that. For certain contracts, it would 
require contractors to consent to personal jurisdiction, 
thereby allowing U.S. courts to hear civil suits alleging rape, 
sexual assault, or serious bodily injury to members of the U.S. 
armed forces, U.S. civilian employees, or U.S. citizens 
employed by contractors working under government contracts 
performed abroad. And, importantly, S. 526 would also require 
contractors to consent to personal jurisdiction in matters 
brought by the United States alleging wrongdoing in the 
performance of a government contract performed abroad.
    Madam Chairman, addressing procurement fraud is among our 
highest priorities at the Department of Justice. We have 
pursued and we will continue to aggressively pursue all 
contractors, foreign or domestic, who seek to defraud the 
government in the procurement process. Since 1986, we have 
recovered in excess of $4.4 billion in procurement fraud 
matters involving the Defense Department in cases that range 
from ensuring that the American taxpayer is not overcharged for 
vital services to our men and women in uniform, to enforcing 
the laws against bribery and other corruption.
    In fraud suits against foreign entities, we have been 
largely successful in asserting personal jurisdiction in U.S. 
courts. We have just announced the filing of two war-related 
cases against defendants that include foreign entities.
    The Department announced 2 days ago that it had intervened 
in a qui tam action against Public Warehousing Company (PWC) 
and others alleging that the defendants knowingly overcharged 
the United States for food supplies for our service members in 
Kuwait, Iraq, and Jordan. A criminal indictment has also been 
filed against PWC in connection with that alleged fraud.
    Now, in these cases we anticipate that our authority under 
the False Claims Act will enable us to establish personal 
jurisdiction over the foreign entity defendants, just as we 
have had that success in the past.
    With respect to S. 526, we believe that the requirements it 
imposes should facilitate the establishment of personal 
jurisdiction over foreign contractors, particularly where it 
does not currently exist. We have a number of technical 
suggestions to the legislation that we have discussed with 
Subcommittee staff, and we are happy to further discuss with 
Subcommittee staff, and I discuss those in more detail in my 
written testimony.
    In conclusion, the Department of Justice supports 
protecting the rights of individuals and their families to 
recover appropriate damages for injuries caused by the 
negligent acts of foreign contractors. We are also dedicated to 
pursuing contractors that commit fraud against the government 
and drain the Treasury of funds so vital to our military and 
procurement systems. We appreciate the Subcommittee's efforts 
to help us fulfill that important mission, and I am happy to 
answer any questions you have.
    Senator McCaskill. Thank you, Mr. West, for being here. Mr. 
Ginman.

TESTIMONY OF RICHARD T. GINMAN,\1\ DEPUTY DIRECTOR FOR PROGRAM 
 ACQUISITION AND CONTINGENCY CONTRACTING, DEFENSE PROCUREMENT 
AND ACQUISITION POLICY (DPAP), OFFICE OF THE UNDER SECRETARY OF 
   DEFENSE FOR ACQUISITION, TECHNOLOGY, AND LOGISTICS, U.S. 
                     DEPARTMENT OF DEFENSE

    Mr. Ginman. Madam Chairman, Senator Bennett, and 
distinguished Members of the Subcommittee, thank you for the 
opportunity to appear before you today on behalf of the Hon. 
Robert Gates, Secretary of Defense, to discuss the 
accountability of foreign contractors.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ginsman appears in the Appendix 
on page 89.
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    Before I begin, I would like to convey my condolences to 
the Baragona family. You have my heartfelt sympathy for the 
loss of your son in service to his country.
    You asked me to address several aspects of S. 526 cited as 
the Lieutenant Colonel Dominic ``Rocky'' Baragona Justice for 
American Heroes Harmed by Contractors Act.
    The legislation is designed to ensure foreign contractors 
with U.S. contracts who perform contracts abroad are held 
accountable for their actions that result in serious bodily 
injuries of members of the armed forces, civilian employees of 
the U.S. Government, and the U.S. citizen employees of 
government contractor companies. While I support the overall 
substance of the legislation, I believe there are portions that 
could be improved.
    First, I believe liability should be limited to actions 
that are linked to the performance required under the 
government contract and not be broadly applied to any action by 
a government contractor, subcontractor, independent contractor, 
or their respective employee.
    Second, applying this provision to contractors at all tiers 
is problematic. Changing the definition of ``contractor'' and 
limiting the applicability of this legislation to the prime 
contractor would allow us to more effectively implement and 
enforce it. It is likely, in order to protect themselves, that 
prime contractors would require all subcontractors, at all 
tiers, to certify compliance with this provision. This will 
undoubtedly impact the issuance of contracts in a combat 
environment and impact the ability to get our troops what they 
need in the required time that they need it.
    Third, the legislation could affect competition to some 
degree. Because the statute would apply to ``any contract'' 
regardless of dollar value, many smaller local vendors overseas 
would either refuse to do business with U.S. forces, or they 
would need to increase prices to cover the additional insurance 
for handling possible U.S. litigation, particularly for 
injuries unrelated to their business with the U.S. Government.
    Fourth, there should be a threshold used to apply the 
consent provision to contracts.
    Fifth, the prospective applicability under contracts and 
the retroactive application as a condition of receiving 
payments under current contracts would fall outside the changes 
clause and require bilateral modifications. It would eliminate 
the Department's ability to unilaterally exercise valuable 
options and require bilateral modifications which allow the 
contractor to ask for consideration, or force termination of 
the contracts.
    We do not know for certain the extent that this new law 
will have on our ability to contract overseas and obtain 
mission-critical supplies and services. If foreign contractors 
opt not to bid on U.S. contracts as a result of the 
legislation, there would be negative impacts on the 
Department's mission. In Iraq and Afghanistan, for example, our 
men and women rely on the delivery of food, fuel, and supplies 
from local and foreign contractors. If these contractors refuse 
to accept contracts from the U.S. Government to perform these 
services, a disruption of the logistical and supply system 
would impact operations while trying to find another contractor 
who will mobilize to perform these critical functions.
    And, finally, it would make sense to include a provision to 
allow the commander in the field to authorize an exception and 
that the contracting officer properly document that decision in 
the file.
    The Department agrees that we contract only entities that 
are responsible for fulfilling their contractual obligations. 
The Federal Acquisition Regulations (FAR) prescribes policies, 
standards, and procedures for determining whether prospective 
contractors are responsible. By statute, the U.S. Government 
may contract only with responsible contractors.
    To summarize, I believe the goals of the proposed 
legislation are sound. The U.S. Government should not do 
business with companies that are not accountable for their 
actions. However, as discussed, we believe we can achieve the 
intended end state and also limit any adverse impact or 
unintended consequences by addressing the concerns that I have 
shared with you.
    I ask that my full statement be entered into the record. I 
understand the latest draft of the bill has addressed several 
of my concerns, and, again, thank you for this opportunity to 
appear before you today, and I am ready to answer your 
questions.
    Senator McCaskill. Thank you, Mr. Ginman. Mr. Fiore.

TESTIMONY OF ULDRIC I. FIORE, JR.,\1\ SUSPENSION AND DEBARMENT 
  OFFICIAL, AND DIRECTOR, SOLDIER AND FAMILY LEGAL SERVICES, 
  OFFICE OF THE JUDGE ADVOCATE GENERAL, DEPARTMENT OF THE ARMY

    Mr. Fiore. Thank you, Chairman McCaskill, Ranking Minority 
Member Bennett, and distinguished Members of the Subcommittee. 
Thank you for the opportunity to appear before you today on the 
important issue of government contractor accountability.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Fiore appears in the Appendix on 
page 96.
---------------------------------------------------------------------------
    As Chairman McCaskill described, I serve in the dual 
capacity as Director of Soldier and Family Legal Services for 
the Army and also, since October 2008, as the Suspension and 
Debarment Official. I succeeded Robert Kittel who served as the 
Army Suspension and Debarment Official from September 2003 to 
September 2008.
    The Army follows the suspension and debarment regulatory 
process set forth in Subpart 9.4 of the Federal Acquisition 
Regulation. A government contractor can be debarred when there 
is a criminal conviction or civil judgment for fraud or a 
similar offense, or when there is a preponderance of the 
evidence that a contractor willfully failed to perform, has a 
history of unsatisfactory performance, or has engaged in 
conduct that affects the contractor's present responsibility.
    Suspension and debarment are discretionary actions taken to 
ensure agencies contract only with responsible contractors, and 
the FAR specifies that these actions are ``not for the purposes 
of punishment.''
    For several years, the Army has led DOD in the number of 
suspensions and debarments with over 300 actions annually, 
including 390 actions during fiscal year 2009 and almost 300 
actions since 2005 against contractors and individuals in cases 
arising in Iraq and Afghanistan. I am not aware of any legal or 
regulatory barriers to the Army's exercise of suspension and 
debarment authority.
    I understand that this Subcommittee is very concerned about 
the Army's decisions not to debar the contractor involved in 
the accident that resulted in the tragic death of Lieutenant 
Colonel Dominic Baragona. I would like to express my 
condolences to the family of Lieutenant Colonel Baragona for 
their loss, and while I cannot comment on potential future 
proceedings, I can address the background and rationale for the 
Army decisions to date.
    In August 2006, the Army received information from Senator 
DeWine that in May 2003 a negligent driver for KGL had caused 
the death of Lieutenant Colonel Baragona in a collision between 
a commercial vehicle and his military vehicle in which he was a 
passenger, and that KGL had failed to appear in a related 
wrongful death civil lawsuit filed in Federal court in Georgia. 
The following month, the Army formally advised KGL that it was 
considering suspending or debarring it.
    In October 2006, KGL replied that while it did not accept 
the initial service of process because it was served 
improperly, in July 2006, it had accepted a properly served 
complaint. Based on this information, the Army suspension and 
debarment official decided against initiating a suspension or 
debarment action at that time.
    In November 2007, the Baragona family attorney notified the 
Army of the $5 million default judgment against KGL. Responding 
to the Army's Request for Information, KGL advised PFB that in 
February 2008 it had sought to vacate that judgment. And, in 
fact, in May 2009, the Federal court did vacate that judgment 
and dismissed the lawsuit for lack of personal jurisdiction.
    In June 2008, Lieutenant Colonel Baragona's father wrote to 
the Army seeking to have KGL debarred based on an Army accident 
investigation that concluded that the truck driver's negligence 
was the cause of the accident. Mr. Baragona also alleged that 
KGL was involved in illegal ``human trafficking.'' Separately, 
the Baragona family attorney alleged that KGL lacked adequate 
automobile insurance at the time of the incident.
    In July 2009, KGL responded to a second Army Request for 
Information with proof of insurance, and further Army inquiry 
discovered insufficient evidence of human trafficking. After 
carefully reviewing that information, I determined that the 
allegations of human trafficking and lack of insurance were not 
substantiated and did not warrant a debarment proceeding.
    The Army's decisions to date do not preclude future Army 
suspension or debarment action if it is determined that KGL has 
acted, or intends to act, in a manner demonstrating a lack of 
present responsibility. Under present authorities, contractors' 
failures to respond to properly served process of a U.S. court 
or administrative tribunal would be an indication of a lack of 
present responsibility and could be the basis for a suspension 
and debarment proceeding.
    I have recently declined to lift a foreign contractor's 
suspension in a case involving an indictment on just that 
specific basis. Although I certainly do not approve of the 
tactics employed by KGL in the lawsuit, KGL acted within its 
legal rights, and a suspension and debarment action was not 
warranted on that issue.
    Thank you again for this opportunity to appear before you 
today and for the support Congress and the Members of the 
Subcommittee have provided to our soldiers, sailors, airmen, 
and marines, and their families.
    I am happy to answer any questions you may have.
    Senator McCaskill. Thank you, Mr. Fiore.
    Let us start with a timeline here. I think you have just 
testified that the first involvement was in August 2006 of the 
suspension and debarment folks, and that was some 3 years after 
this accident occurred. Is that correct?
    Mr. Fiore. Based on the records available to me, that is 
correct.
    Senator McCaskill. And you have access to all the record, 
correct?
    Mr. Fiore. I have access to the records in the Procurement 
Fraud Branch, which is the branch that processes these cases, 
yes.
    Senator McCaskill. OK. And you have reviewed all those 
records?
    Mr. Fiore. I have.
    Senator McCaskill. And so in August 2006, as a result of 
the Baragona family, not as a result of anybody else--I want to 
make sure the record is clear on that--that this initial 
inquiry of suspension and debarment looking at the actions of 
this company occurred as a result of the Baragona family 
contacting their Member of Congress, and that Member of 
Congress making an inquiry to the Suspension and Debarment 
Office. Is that correct?
    Mr. Fiore. That is my understanding. I was not in this 
capacity at the time.
    Senator McCaskill. I understand that. And it was, in fact, 
after that point in time that the Baragona family began to try 
to seek justice on their own because of their frustration that 
the military had not done anything, that General Bednar got 
involved. Is that correct?
    Mr. Fiore. I have not had any involvement with General 
Bednar.
    Senator McCaskill. And there is nothing in the records 
about General Bednar contacting the office?
    Mr. Fiore. I would have to go back and check that and 
respond to the Subcommittee on that, Senator.
    Senator McCaskill. I think that would be important. When 
you were reviewing the records, wouldn't it jump out at you 
that a former general was representing the Kuwaiti company that 
killed a member of the military? Wouldn't that be something 
that would stick in your mind?
    Mr. Fiore. General Bednar represents many contractors in 
his capacity as a private attorney. He has been retired for 
almost 30 years at this point, but he has been very active in 
the private bar in Washington.
    Senator McCaskill. But when he worked in the military, he 
worked in the Suspension and Debarment Office. Is that correct?
    Mr. Fiore. For a brief period of time, he was a suspension 
and debarment official in his last position as the Assistant 
Judge Advocate General for Civil Law.
    Senator McCaskill. OK. I just would find it startling, if 
you have reviewed all the records, that you would not have 
noticed that General Bednar would have been involved. But you 
are saying you did not see his name when you were reviewing the 
records, or you are just not sure?
    Mr. Fiore. I am not sure because, as I said, he is involved 
in a number of different cases in this field, and seeing his 
name in a suspension and debarment file would not be unusual.
    Senator McCaskill. I do not know whether that is good news 
or bad news, but I would certainly appreciate you looking at 
the records and letting us know specifically where his name 
appears, if at all, in the records of this case and in what 
context, and we would like copies of any of those records.
    Mr. Fiore. We will do so.
    Senator McCaskill. OK. Now, in your testimony you correctly 
refer to the various ways that suspension and debarment can 
occur, and one of them that you quote in your testimony is that 
a company ``has engaged in conduct of so serious and compelling 
a nature that it affects that contractor's present 
responsibility as a government contractor.'' And I think we 
would call that in the legal business a catch-all. Would you 
characterize it that way?
    Mr. Fiore. Yes, Senator.
    Senator McCaskill. And it provides for discretion on the 
part of the Suspension and Debarment Office because clearly 
this is in many ways a subjective decision that the office 
would have to make. Is that correct?
    Mr. Fiore. It is a decision that is made based on the 
evidence of record. There are times when it has some 
subjectivity to it, but we try and use objective evidence.
    Senator McCaskill. Well, serious and compelling, I think 
that is one of those things that juries figure out, and it is 
one of those things that finders of fact figure out. It is not 
a matter of law. That is a factual determination, interpreting 
the facts to determine whether or not it is serious and 
compelling.
    Mr. Fiore. Yes, that is correct.
    Senator McCaskill. I am going to read you what the judge 
said at the point in time that the judge reluctantly had to let 
any hope of justice on the civil front in the courts of this 
great country go out the door for the Baragona family.
    ``KGL derived substantial revenue from its contracts with 
the United States Army. For KGL to then turn a blind eye to the 
death caused by a KGL employee of a United States service 
member, who was on duty protecting the region at the time of 
the incident, is an affront to the solemn sacrifices service 
members such as Lieutenant Colonel Baragona honorably provided. 
KGL took this callousness even further by causing plaintiffs to 
expend nearly 4 years and significant expense in merely getting 
the question of jurisdiction before the court. This court 
abides by its charge to seek just and constitutional results, 
in spite of KGL's irresponsible participation in this 
process.''
    Those were the words of the judge.
    Now, what about that is not serious or compelling?
    Mr. Fiore. Senator, there is an argument that can be made 
that is serious and compelling. However, the judge also pointed 
out that KGL was within its legal rights to do so, however 
abhorrent. Therefore, it is hard for me to conclude that was 
misconduct, however serious and compelling or important it 
might have been.
    Senator McCaskill. Well, the phrase does not say 
``misconduct,'' sir. It says ``serious and compelling.'' And I 
guess what I am trying to get at, if a contractor kills one of 
our soldiers through their negligence and then sits silently 
and plays a game of ``You can't touch me'' and watches this 
family suffer the way they have for years on end and go to 
great expense trying to find justice, and if the court itself 
cries out at the time they must follow the law and turn this 
family away, what would be serious and compelling? Is it two 
people being killed? What if they killed three people? What if 
there were seven soldiers killed that day in the accident? At 
what point in time does their conduct become serious and 
compelling?
    Is it that your office takes the view that it must be a 
crime or that the courts must find something wrong first?
    Mr. Fiore. No, Senator, that is not the case.
    Senator McCaskill. Well, I am at a loss at what the 
Suspension and Debarment Office would consider serious and 
compelling if this is not, and somebody in the military needs 
to explain that to me. I am, frankly, flabbergasted that most, 
if not all, of the effort in this case came from the Baragona 
family and not internally in our military after a member of our 
military is killed, that the only way that we are sitting here 
today is because of this brave and tenacious family doing this 
on behalf of their loved one. And I guess I am confused that 
there is not more remorse about the way this was handled.
    Do either of you have any testimony you would like to give 
about how you think this has been mishandled? None?
    Mr. Ginman. I do not.
    Senator McCaskill. You do not. OK.
    In your testimony, Mr. Ginman, let me ask you about the 
exception that you testified about that you think that people 
should be able in the field, commanders in the field should be 
able to give an exception to personal jurisdiction to a 
contractor. Could you give me an example of when you think that 
exception would be appropriate?
    Mr. Ginman. It is difficult to determine when that would 
be. If I am the battle group commander, I am on the scene, the 
only contractor that has the product that I need is, in fact, 
debarred or has been suspended, do I think I might need an 
exception to be able to get to that person? Yes. Do I think it 
would be an exception that I would expect to take? No. I think 
I should always expect to find contractors that are responsible 
to deliver.
    Senator McCaskill. Well, if there is a hypothetical that 
you could come up with that would be specific that a commander 
in the field would want to do an exception, I would be very 
interested in understanding what the parameters of that 
situation would be where an exception for a foreign 
contractor--by the way, if you hire an American company, they 
do not get to write an exception in the field for them. Why 
would we need to write an exception in the field for a foreign 
contractor?
    I am trying to understand why there is this distinct 
difference between the Army's view or the military's view of 
contractors from the United States of America and foreign 
contractors? And believe me, I understand the need for foreign 
contractors. I have spent a lot of time on military contracting 
in the time I have been here. I understand that. But I think I 
need a more specific example why we would want to write into 
the law the ability to ignore the law. If you could work on 
that and get back to us, I would really appreciate it.
    Why don't I go ahead and let Senator Bennett ask questions, 
and I will do that on my second round. Thank you. Senator 
Bennett.
    Senator Bennett. Thank you, Madam Chairman. I appreciate 
that, and I appreciate, again, your holding the hearing, and 
these witnesses. I apologize that I am going to have to leave 
after my round because I have another assignment, but this has 
been a very useful experience.
    Mr. Fiore, you made the point, which I think is an 
important point to make, that you do not use suspension and 
debarment as a punishment, and as I say, I think that is an 
appropriate point to make.
    However, as the Chairman has pointed out, you do have 
discretion, and she has done her best to make a case that feels 
to me that says that in this circumstance the discretion can be 
appropriately used, not as punishment.
    Is KGL still a viable candidate for Army contracts?
    Mr. Fiore. At this point they are. They are not on the 
excluded parties list. And I would just point out that my 
discretion is not unfettered. The decisions I make are subject 
to review in Federal courts under the Administrative Procedures 
Act, and so that is the standard by which I have to make 
decisions on the records that I have before me.
    Senator Bennett. So you feel that the record before you, if 
you were to say KGL should not be considered for future 
contracts, you feel if you made that decision it would be 
overturned?
    Mr. Fiore. Based on the record I had before me, I did not 
feel that it would be sustainable in Federal court.
    Senator Bennett. All right. Let us talk about that record. 
As I understand it, as you went through it, the reactions--and 
when I say ``you,'' I understand that many of these decisions 
were not necessarily made by you personally, but by the office 
that you now hold. The decisions were made on the basis of the 
responses from KGL. Did you take their word for it on every 
point of fact or conduct any kind of independent investigation 
to see if they were leveling with you?
    Mr. Fiore. The record includes the submissions by the 
Baragona family and their attorney, the courts records that we 
obtained, the information that KGL provided, and other 
information that the people in the Procurement Fraud Office 
gathered on those issues. We did not take the information from 
either side at face value.
    Senator Bennett. But you did not conduct any kind of 
investigation of your own? You just said, OK, here we are, and 
everybody who wants to comment, comment, and then you made the 
decision on the basis of----
    Mr. Fiore. I did not personally conduct an investigation. 
The Procurement Fraud Branch attorney in charge of the case 
conducted an investigation, to the extent he had the ability to 
do so, of various sources that had relevant information. It is 
not done to the same level as you would conduct a criminal 
investigation.
    Senator Bennett. OK. Let us talk about that level. I 
continue to be troubled here. How do you investigate evidence 
in these cases? Whether it is accusatory or exculpatory, you 
are getting information--one family is saying to you this is 
what happened, somebody else says, no, and we are within our 
rights to stonewall. What kind of follow-up do you do?
    Mr. Fiore. Those items that are in agreement, we do no 
follow-up on. Where there is a dispute, then additional 
information is gathered if it is available, and ultimately it 
is brought to me, and I have to make the determinations of fact 
based on what is in the record. I am not an investigator. I am 
an adjudicator at that point.
    Senator Bennett. OK. Additional information is gathered and 
submitted to you. Gathered by whom?
    Mr. Fiore. It would be gathered by the attorneys in the 
Army's Procurement Fraud Branch.
    Senator Bennett. Would it be useful, Madam Chairman, if we 
got a look at what that information was?
    Senator McCaskill. I think it would be great.
    Senator Bennett. Could you supply that for us, Mr. Fiore?
    Mr. Fiore. We certainly can. I believe most of it has 
already been provided to staff in prior meetings, but we can 
certainly make sure that it has been made available.
    Senator Bennett. I think that would be helpful because--
well, all right. I will leave that.
    Now, you entered into a discussion with the Chairman about 
General Bednar. Do you know General Bednar?
    Mr. Fiore. I know him professionally.
    Senator Bennett. For how long have you known him?
    Mr. Fiore. I first met him somewhere around 1980 briefly 
when he was still on active duty and I was a mere captain.
    Senator Bennett. There is always a relationship between a 
general and a mere captain that is somewhat different than the 
normal----
    Mr. Fiore. It is somewhat attenuated, Senator.
    Senator Bennett. Yes, I understand that.
    Mr. Fiore. Until I assumed this position, I may have seen 
him three times in 30 years. Since I have assumed this 
position, I have probably seen him twice. Once was at a meeting 
of the ABA's Committee on Suspension and Debarment, of which he 
is a member.
    Senator Bennett. But you do not recall any conversations 
with him or any contact with him about this case?
    Mr. Fiore. No, I do not. Certainly since I have been the 
suspension and debarment official, I do not believe I have had 
any contact with him on this case.
    Senator Bennett. And you are going to review the record for 
the Chairman about any contact he may have had with your 
predecessor?
    Mr. Fiore. Or with the Procurement Fraud Branch office, 
yes.
    Senator Bennett. All right. Well, again, the fact that I am 
not a lawyer enters into this, but having been an executive who 
had hired lawyers, I have paid a lot of legal bills, although I 
am not a lawyer. I would like to know a little bit more about 
the whole process because it does strike an outsider that this 
particular case has been decided on very technical grounds all 
the way through without any exercise of judgment along the way. 
And maybe that is the way it should be done, but I think the 
Chairman is appropriate in calling this hearing to pursue that 
question because it is a question that a non-lawyer would ask 
looking at the facts that we have before us.
    Thank you, Madam Chairman.
    Senator McCaskill. Thank you very much, Senator Bennett.
    I certainly understand that you have to make a decision. As 
you indicated, you are an adjudicator in the position you hold. 
You are not an investigator. You are an adjudicator. I 
understand that you have to have a record in front of you that 
will justify your decision. But I am curious since debarment, 
relative to the number of contractors that are out there in our 
government, is a fairly rare occurrence. Suspension is a little 
less rare, but, nonetheless, there is a whole lot of bad 
activity going on in contracting where there is never a 
suspension or a debarment. I mean, you can look at some of the 
things that happened with KBR, and you have to scratch your 
head as to why--maybe we are into the too big to fail category 
in defense contracting like we have been in other areas of 
government.
    But I am curious. Is there a large body of case law where 
suspensions and debarments have been overturned?
    Mr. Fiore. It is not a large body, Senator, but there was 
one within the past month.
    Senator McCaskill. Where one was overturned?
    Mr. Fiore. Yes, Senator.
    Senator McCaskill. Well, I think it is incumbent on our 
Subcommittee, if we want to be responsible, that we take a look 
at that, and we will, to look at the case law in the area of 
suspension and debarment--maybe it is the former prosecutor in 
me, but it feels like there are some laydowns here that are 
occurring that people are not erring on the side of being 
aggressive in terms of cleaning up contracting procedures and 
practices. And I do not think that characterization is unfair, 
but we will take a look at the cases and see on what basis--
and, generally speaking, in the case law how many cases would 
you say are out there that are informative of the legal 
standards you face on suspension and debarment where you have 
been challenged and the military has been overturned on their 
suspension and debarment activities?
    Mr. Fiore. I have not personally been challenged. I know in 
the Army it happens once every few years. The other services 
occasionally get challenged as well. Non-DOD agencies are not 
as aggressive in suspension and debarment as DOD agencies are, 
so there will be fewer of them.
    Senator McCaskill. Yes. And, generally, the basis is 
insufficient record?
    Mr. Fiore. The standard for the Administrative Procedures 
Act is arbitrary, capricious, or contrary to law. So a 
reasonable basis was a preponderance of the evidence type----
    Senator McCaskill. So it is preponderance standard and it 
is arbitrary and capricious?
    Mr. Fiore. Yes, Senator.
    Senator McCaskill. OK. Well, I will admit I did not 
practice extensively in administrative law, but this does not 
feel like it would have been arbitrary or capricious, and it 
certainly feels like there was a preponderance of the evidence 
that there was some compelling activity here.
    Let me ask you about liability insurance. It is my 
understanding these contractors have to have liability 
insurance, correct?
    Mr. Ginman. Yes, ma'am.
    Senator McCaskill. What for?
    Mr. Ginman. They have third-party workers' compensation, 
particularly in the case of transportation, there is a 
responsibility to have--I will get it exactly.
    Senator McCaskill. Well, I think--it has been a long time 
since I have been to law school, but I think if transportation 
contractors, which KGL was, are required to have liability 
insurance, I think it is because they are supposed to use that 
insurance if they are negligent and kill someone.
    Mr. Ginman. Yes, ma'am.
    Senator McCaskill. Why are we requiring them to have 
liability insurance if we cannot ever sue them? That seems kind 
of dumb to me.
    Mr. Ginman. They are required to have vehicular and general 
public liability insurance.
    Senator McCaskill. Yes.
    Mr. Ginman. And at thresholds specified in the contract.
    Senator McCaskill. Yes, so that is what is really curious 
about this case, that we would require them to have insurance 
for just this occurrence, but yet the military would put no 
pressure on them to utilize the insurance that we require them 
to obtain for just this kind of occurrence. It is really 
curious to me. Frankly, I would think that they would not carry 
that insurance. That is an expense they do not need, because we 
cannot get them, we cannot reach them. And so it seems to me 
that we ought to take that out as a contract requirement and 
then maybe we can get the contracts for less money if we are 
not going to require them to make that insurance available to 
the victims of their negligence.
    Mr. West, let me talk about procurement litigation, and I 
did notice the cases that occurred a few days ago, and I think 
it is terrific. But it brings up the thorny subject of qui 
tam's and why there are so many that are sitting at the 
Department of Justice. It seems these are money makers, right?
    Mr. West. Our record of intervention has been good, Madam 
Chairman. In terms of the cases that the government intervenes 
in, they tend to be successful, and they do tend to bring money 
back to the Federal Treasury.
    Senator McCaskill. So this is one of those things--this is 
the speech I always make about more auditors. Auditors save 
money.
    Mr. West. Right.
    Senator McCaskill. We need to hire more of them. This would 
be where I would want to make the speech: Why are we not 
putting more resources into these qui tam's. Why are so many of 
them sitting--I mean, you seal them so we are not really sure 
how many there are. I do not suppose you would tell us today, 
would you?
    Mr. West. Well, actually, I will tell you, because this is 
something that has come up before, and when I began in this job 
in late April, it was something I was curious about, too. And 
what I have learned in my conversations with the attorneys who 
do these cases is that I would say there are roughly 1,000 
cases which are currently under seal, qui tam's. And at first 
glance, it might look like that is a backlog, that they are 
sitting there. But, in fact, what those 1,000 cases represent 
are active investigations which are going on, not only in Main 
Justice but in every one of the 94 U.S. Attorney's Offices 
around the country. And so that 1,000 actually represents every 
single qui tam that the United States is currently actively 
investigating.
    There are two other dynamics which also affect that number. 
One is that if you were to take a snapshot of the 1,000 or so 
cases that were under seal a year ago and you were to take a 
snapshot of those same 1,000 cases today, you would notice that 
the pool is actually different. There are cases which are 
always moving in and cases which are always being unsealed, 
moving out. And so they are actually not the same cases.
    And then the last thing I would note is that oftentimes 
what you will see is when a case is unsealed, it is not simply 
an announcement of the allegations. What you often see is an 
announcement not only of the allegations, but also a settlement 
agreement at the same time, because what is actually happening 
when these cases are under seal is we are working with 
defendants, we are working with relators, to actually resolve 
the case so that we can announce both an allegation, a 
complaint, as well as a resolution at the same time. We think 
that serves everyone's interests best.
    Senator McCaskill. Well, I think it would behoove this 
Administration to make this a priority. It is of great 
frustration to many people who have brought I think meritorious 
action under this law that it appears to go into a big black 
hole, not to be heard from for a while. And I do not know what 
your resources are over there, but maybe this is a subject 
matter that we can take up outside the purview of this hearing. 
But the lack of transparency--I understand the public policy 
reason behind the sealing. It is abhorrent to me in government 
that we have to seal anything. But the lack of transparency 
provides a really fallow ground for cynicism about how 
aggressive the government is being in going after these 
actions, especially in the field of contracting right now and 
the whistleblowing that we have had as a result of contingency 
contracting in Iraq and now carrying forward into Afghanistan. 
I think it is really important that we continue to work those 
cases very hard.
    Let me finish up. I want to make sure I understand who 
everybody works for. I know you work for Attorney General 
Holder.
    Mr. West. That is correct.
    Senator McCaskill. Mr. Ginman, what is your line of 
command?
    Mr. Ginman. My immediate supervisor is Shay Assad, who is 
Director of Defense Procurement.
    Senator McCaskill. OK. I know Mr. Assad well.
    Mr. Ginman. Who works for Under Secretary Carter for 
Acquisition, Technology, and Logistics, who in turn works for 
Secretary Lynn and Secretary Gates.
    Senator McCaskill. OK. And, Mr. Fiore, what is your 
command?
    Mr. Fiore. My supervisor is the Judge Advocate General, 
Lieutenant General Dana Chipman, and I operate under a 
delegation from the Secretary through him to me.
    Senator McCaskill. And who is the person who is responsible 
for actually--who fills your position? The JAG? Is that who 
fills your position?
    Mr. Fiore. The Judge Advocate General appoints the 
suspension and debarment official under authority delegated by 
the Secretary.
    Senator McCaskill. OK. I wanted to make sure I was clear on 
that.
    I think requiring these contractors to get liability 
insurance is great, and I think that we do it for a reason. And 
I think the notion that the Baragona family had to sit in a 
courtroom and watch lawyers high-five because they never even 
had to contact their insurance coverage is a gut punch for 
justice in this country. And I think we need to remedy that gut 
punch, and we are going to work really hard on this 
legislation. And I ask for your help and support to make this 
legislation. I know we have changed it already, Mr. Ginman, 
because of some of the concerns of your office. I would 
certainly ask for your guidance, Mr. Fiore, if there are more 
tools you need to use the discretion as a determinator of the 
facts, as you make a determination of the facts, I would 
certainly hope you would speak up now, because something is 
terribly wrong with this story, and I think it is incumbent on 
all of us to get it fixed before there is another Rocky 
Baragona laying on a highway somewhere in Afghanistan with a 
foreign contractor that has an insurance policy but 6 years 
later high-fives a lawyer in a courtroom somewhere in America 
and says, ``Catch me if you can. You cannot touch me.'' I think 
that is a very bad result for our American military.
    I want to thank all of you for being here today, and the 
record will stay open for a week for any additional information 
you want to add. Thank you.
    [Whereupon, at 4:18 p.m., the Subcommittee was adjourned.]


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