Foreign workers for U.S. are casualties twice over

Reporting from San Fernando, Philippines —  Rey Torres dreamed of a better life for his wife and five children when he left a neighborhood of wooden shacks and burning trash piles to drive a bus on a U.S. military base near Baghdad.

He hoped to send his children to college and build a new home with the $16,000 a year he earned in Iraq -- four times what he could make in the Philippines.

Then, in April 2005, Torres, 31, was killed in an ambush by Iraqi insurgents. His widow and children were supposed to be protected by a war zone insurance system overseen by the U.S. government. They were eligible for about $300,000 in compensation.

But Gorgonia Torres knew nothing about the death benefit and did not apply. When she did learn about the insurance, two years later, it was from a reporter. She has since turned down an insurance company’s $22,000 settlement offer. Her only hope of receiving full compensation is a legal fight that could drag on for years.

“He knew it was dangerous. . . . He had second thoughts all the time,” she said of her husband. “But he’d say, ‘If I don’t go, there’s no way we’ll be able to survive.’ ”

Torres was among tens of thousands of civilian contract workers from poverty-stricken countries hired to support the U.S. war effort in Iraq and Afghanistan. In case of injury or death, they are supposed to be covered by workers’ compensation insurance financed by American taxpayers.

But the program has failed to deliver medical care and other benefits to many foreign workers and their survivors, a Los Angeles Times-ProPublica investigation found.

Previous articles by The Times and ProPublica described how American civilians injured in Iraq have had to battle insurers for medical care, artificial limbs and other services.

An examination of what happened to foreign nationals has uncovered an even more dismal record. Injured workers have gone without medical treatment and compensation because they were never informed of their right to the benefits. Widows and children have not received death payments for the same reason.

The system relies on companies to make employees aware of coverage and to report deaths and injuries to insurers and the federal government. But some employers have shirked those obligations, and the U.S. Department of Labor, which oversees the program, has done little to ensure compliance, punish violators or reach out to injured foreigners or their survivors.

An analysis of Pentagon and Labor Department records indicates that thousands of injured foreigners have fallen through the cracks.

About 200,000 civilians are working in Iraq and Afghanistan under U.S.-funded contracts. Many are so-called third-country nationals, from countries other than the United States, Iraq or Afghanistan. The rate of reported injuries among these workers is much lower than for Americans doing similar jobs.

Nearly 22,000 injury claims were filed by third-country nationals and American workers from 2003 through 2007. Although they outnumbered Americans by about 2-1, the third-country nationals filed just 14% of the total claims.

Insurance experts said the numbers suggest that many wounded foreigners never apply for benefits, even though U.S. taxpayers have paid more than $1.5 billion in premiums for the war-zone insurance.

Those who do apply often confront rejections and resistance from insurers. It can take years for them to receive compensation.

“It’s been a big problem,” said Jack Martone, a former top Labor Department official. “The Department of Labor is not well equipped to police” the conduct of employers and insurers.

Insurance for civilians working in war zones is required under a World War II-era law known as the Defense Base Act. Companies providing services to the U.S. government must secure a special type of workers’ compensation coverage for their employees, both American and foreign.

The insurance covers all injuries and deaths, whether caused by workplace accidents or roadside bombs. Companies bill the cost to U.S. taxpayers as part of their government contracts.

Mobilization of civilians

For decades, this system was overseen by a handful of federal bureaucrats who processed a few hundred claims a year. That changed when the U.S. went to war in Afghanistan in 2001 and later in Iraq.

In both conflicts, the U.S. military has relied on civilian workers to a greater extent than ever before -- to cook meals, clean latrines, deliver fuel and translate for troops, among many other tasks. There are more civilians than uniformed soldiers in the two war zones, and more than 1,400 contract workers have died.

Despite this large-scale mobilization of civilians, the Labor Department did not increase staff or budget to handle Defense Base Act claims and was quickly swamped.

The department stationed no one in Iraq or any other country to help injured foreigners file claims. Nor did it make a serious effort to ensure that companies posted information about workers’ rights, as required by law.

“I see a complete absence of claims or payments for foreigners,” said Joshua Gillelan, a former Labor Department attorney who now represents injured contract workers. “They are never going to be enforced.”

Thousands of companies have worked under U.S. contracts in Iraq, but since the war began in 2003, the department has fined only one, a small security subcontractor, for not reporting worker injuries, according to Labor Department figures.

Similarly, the department has not prosecuted any companies for failing to buy war-zone insurance, although the Times-ProPublica investigation identified at least five cases in which military contractors did not provide coverage for employees.

The department does not even attempt to communicate with injured Iraqis or Afghans for fear that a letter from the United States might imperil their lives. Instead, the department asks employers to forward Labor Department mail informing workers of their rights.

“It’s the biggest fiasco. Almost all of it is returned,” Richard Robilotti, a department official who oversees many of the claims, said at a recent conference.

Labor Department officials said cultural barriers and war-zone dangers have prevented them from reaching out to injured foreigners.

“There is no mechanism for the Department of Labor to stand around in Baghdad and drum up claims,” said Shelby Hallmark, who oversees the department’s Defense Base Act program. Officials try “to get the word out down through their chains of subcontractors on how this works. Is it perfect? No, I wouldn’t say it is.”

Insurers defended their performance. American International Group Inc., the insurance giant that received a huge taxpayer bailout last year after suffering heavy losses in the derivatives market, is the largest provider of workers’ compensation coverage in Iraq.

In a statement, the company said it conscientiously fulfilled its obligations to workers injured in the war zone and took “numerous extraordinary measures under very difficult circumstances to locate and pay claimants or their beneficiaries.”

AIG opened an office in Dubai, United Arab Emirates, to handle claims and translated Labor Department guidelines into Arabic, Turkish and other languages. In some cases, AIG has hired insurance research companies to track down widows and injured workers.

CNA Financial Corp. has the second-largest number of claims in Iraq and Afghanistan. The insurer said it “routinely pays claims made by foreigners” and “is not aware of a problem with regard to foreign workers.”

Incident rates differ

KBR Inc. is the largest employer of contract workers in Iraq, with about 16,000, most of them U.S. citizens, according to a July 2007 Pentagon census.

The Houston engineering and construction firm reported more than 700 serious injuries or deaths in the first six months of 2007-- almost 5 incidents for every 100 workers.

Prime Projects International of Dubai was the largest employer of foreigners in Iraq, with about 10,000 civilian workers.

The company reported 43 serious injuries or deaths in the first six months of 2007 -- less than 1 per 100 workers.

The same held for other subcontractors with large foreign workforces, such as Saudi-based Gulf Catering Co. and Tamimi Global Co. and Turkish firm Kulak. None of the companies responded to requests for comment.

“When you’re dealing with these subcontractors, a lot of them would just as soon wash their hands and walk away,” said Tyler Keagy, vice president of operations for Vetted International Ltd., a North Carolina firm that researches claims for insurance companies. “A lot of claims go unreported and these people just don’t get care.”

Many of the Middle East firms providing services to the U.S. military in Iraq are subcontractors for KBR. In a statement, KBR said its “top priority is the safety and security of all employees and those the company serves. . . . We expect those we do business with to uphold that same commitment.”

When an employer neglects to report an injury or death, it is difficult for foreign workers or their survivors -- assuming they even know about the war-zone insurance -- to persuade U.S.-based insurance companies and federal bureaucrats that they are entitled to benefits.

Gorgonia Torres found that out after losing her husband in Iraq.

Rey Torres had gone to Baghdad in December 2003. Stationed at Camp Victory, a U.S. military complex on the outskirts of the Iraqi capital, he was a jack-of-all-trades, working as a driver, janitor and security guard, his wife said.

On April 17, 2005, Gorgonia got a call from one of Rey’s co-workers, who told her he had been killed while traveling through an insurgent-infested neighborhood of Baghdad.

Eleven days later, her husband’s remains were delivered to her in a coffin sealed with red wax. Gorgonia took a deep breath when she remembered looking inside.

“Every part of my body was in pain. I felt like I had just run a long distance. I couldn’t even feel my legs. Everything hurt,” said Gorgonia, 38, a slight woman with high cheekbones and short black hair.

The Philippine government paid Gorgonia about $5,000, a death benefit for citizens working abroad. Her husband’s employer, Qatar International Trading Co., made a one-time payment of $16,000, representing a year of his salary.

That was a fraction of what she was due. Under the Defense Base Act, a widow is entitled to as much as half her spouse’s salary for the rest of her life -- more if the deceased left children behind. For foreigners, the law allows insurers to calculate a lump sum based on an estimate of the widow’s remaining life span, and pay half that amount. (Survivors of U.S. citizens receive the full lump sum or lifetime monthly payments.)

Under the formula, Gorgonia and her children were eligible for as much as $300,000. But until a reporter visited her in 2007 after learning of her case from a Philippine government website, Gorgonia had never heard of the insurance.

Qatar International never told her about it, Gorgonia said. Nor is there any record that the firm reported Rey Torres’ death to the U.S. government.

When she finally applied for compensation, the Labor Department sent her a notice in English that she could not read. It said that AIG, Qatar International’s insurance carrier, was disputing her claim and wanted more time to investigate the death and verify her husband’s employment.

AIG recently offered a one-time payment of $22,000, Torres said. She turned it down. She hired a U.S. lawyer and is pursuing full compensation through the Labor Department’s dispute resolution system, a process that can take years.

AIG declined to comment on any individual case.

Qatar International, a logistics and support firm, did not return phone calls and e-mails seeking comment.

Torres used the $21,000 she received after her husband’s death to build a two-story, two-room concrete house among tin shacks and rutted roads in a poor area of San Fernando, a provincial capital on Luzon, the Philippines’ main island.

The bottom floor houses the family business, a store crammed with sacks of rice, cases of soda and canned squid. Gorgonia and the five children live upstairs.

Business is bad. One December day, Gorgonia fretted that she would not earn enough to put food on the table. One of her children hunted for snails in a ditch for dinner. Another went Christmas caroling in hopes of getting donations to buy pants for school.

“As time goes by, it gets worse and worse,” she said.

Claim goes unfiled

Marcelo Salazar, a Filipino from the resort island of Cebu, was killed in Iraq in April 2005 while working as a truck driver. He left behind his partner, Vicky Buhawe, their baby son, and an unfinished house.

Buhawe has no right to benefits under the Defense Base Act because she and Salazar were not married. Their son, John Mark, now 4, is eligible for a one-time payment of about $14,000, based on his father’s wages. But Buhawe was unaware that civilians employed in the war zone were covered by insurance and never filed a claim.

There is no record that Kuwait-based El Hoss Engineering and Transport Co., Salazar’s employer, reported his death to the Labor Department. The company did pay compensation to Salazar’s son by a different relationship, according to a Philippine government news release.

Efforts to reach El Hoss for comment were unsuccessful.

“Sometimes we go to Marcelo’s grave and we whisper, ‘How will we survive tonight?’ ” Buhawe said as she held John Mark on her knee. “Tonight, I am not sure where we’re going to get dinner.”

Another Filipino, Leopoldo Soliman, took a job in a warehouse on a U.S. military base in Iraq in 2003, hoping to save enough to build a home for his wife and children in a village northeast of Manila.

He earned $9,000 a year working for Prime Projects International, a KBR subcontractor. In 2004, he was given a commendation by U.S. soldiers for “hard work and tireless dedication.”

Then, in May 2005, a mortar shell fell near his living quarters in Balad, a military logistics hub north of Baghdad. Shrapnel blew a hole in his knee.

Prime Projects paid for his initial medical care in Iraq and the United Arab Emirates and his transportation back to the Philippines, he said. But since then, he has had to pay out of his own pocket for pain medication, follow-up surgery to remove shrapnel and physical therapy.

Soliman said Prime Projects ignored his pleas for help. He said he never received any information about the war-zone insurance and has not filed for benefits.

Prime Projects did not respond to requests for comment.

Soliman said the company “treated me well during the accident.

“After that, when I came home, nothing.”

A global workforce

The Defense Base Act was not designed for the complexities of the global contractor workforce now in Iraq and Afghanistan.

Citizens of at least 45 countries are working under U.S. contracts in the two nations. Yet Labor Department notices are printed in English and Arabic, but not Tagalog, Hindi or the many other languages spoken by workers.

Overseas companies often ignore orders from Labor Department administrative law judges to appear in court or pay benefits.

Contracts for support services often involve layers of subcontractors. A Sri Lankan janitor might work for an Indian labor broker hired by a Middle Eastern subcontractor for a U.S. company. The chain is so complex that foreign workers can have trouble proving they were employed in behalf of the U.S. war effort.

In 2004, a dozen Nepalese were killed by insurgents in western Iraq. They had been on their way to work at a U.S. base where Daoud & Partners Co., a Jordanian logistics firm, held a contract. The company denied that it employed the men, foreclosing death benefits for their survivors.

After news reports about the case, attorneys with the Washington law firm of Cohen Milstein Sellers & Toll volunteered to represent relatives of the slain Nepalese.

Attorney Matthew Handley traveled to Nepal to take witness statements and discovered, by chance, a copy of an employment contract that showed the men worked for Daoud.

In 2008, four years after the killings, a Labor Department judge ruled that Daoud and its insurance provider, CNA, were obliged to pay death benefits. That June, CNA began paying compensation, ranging from $35,000 for dependent parents to $175,000 for young widows of the dead workers.

Daoud did not respond to requests for comment.

“I couldn’t imagine anyone without counsel, nevermind somebody from Nepal, trying to navigate through this process,” Handley said.

“When it comes to third-country nationals, it becomes a black hole. You’re lucky if you’re able to get payments.”

Survivor’s struggles

Even when foreigners know their rights, the system can be daunting.

Daniel Brink, a South African, was working as a security guard in Iraq when his SUV was hit by a string of roadside bombs in December 2005.

Brink, a former police officer, lost his right leg and most of his fingers. He was flown to London, where surgeons used some of his toes to replace some of his lost fingers.

CNA, the insurance carrier for Brink’s employer, paid for that treatment. But when he returned to Johannesburg, South Africa, disputes arose over the cost of follow-up surgeries, psychological counseling, an electric wheelchair and related renovations to Brink’s house. CNA took months to pay for the surgeries and rejected the other bills, Brink said. His credit rating plunged, his wheelchair was repossessed, and he lost his home to foreclosure.

In May 2007, Brink flew to Chicago, believing he had an appointment to meet with his CNA claims adjuster. When he arrived, Brink said, he was told nobody would meet with him. Security guards escorted him out of CNA headquarters.

Two years later, Brink is pressing his claim in the Labor Department’s dispute-resolution system. He said his outstanding medical bills total about $150,000.

CNA said that it “does not have any direct contact with workers,” but otherwise declined to comment, saying that individual cases are confidential.

Brink, 39, said scores of South Africans who worked in Iraq are in similar situations. He is now in law school and hopes to represent injured contract workers from his country someday.

“It’s not that I want something out of the ordinary,” Brink said. “I just want what I’m entitled to, nothing more, nothing less.”

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