Associated Press | Feb 10, 2009
The survivors of four Blackwater Worldwide contractors killed in a grisly ambush in Iraq five years ago have suffered yet another setback in their legal battle with the company.
A federal administrative law judge ruled last week the children of one of the slain contractors should receive compensation through a government insurance program known as the Defense Base Act. It prohibits those eligible for benefits from filing lawsuits against companies covered by the insurance.
The families of the four dead contractors have received payments through the program for several years. Seeking to keep their right to sue, the mother of contractor Scott Helvenston’s two children asked the judge to rule they never were entitled to the benefits they’ve been receiving.
They argued the Defense Base Act does not apply to Blackwater’s work as a subcontractor, the insurance doesn’t apply to independent contractors, and the family should be able to sue because Blackwater committed willful misconduct in how the company handled Scott Helvenston and his fateful mission. Helvenston was one of four contractors killed in the attack in Fallujah in 2004.
William Dorsey, a U.S. Labor Department administrative law judge in San Francisco, disagreed on each point in a ruling issued last week. Thought the decision was based on the Helvenstons claims, it appears to further complicate the chances the four families have of winning a wrongful death lawsuit against North Carolina-based Blackwater. The company has already successfully gotten the case moved from federal court and into arbitration.
“The ruling speaks for itself,” said Blackwater general counsel Andy Howell in a statement. “It is reassuring to see the purpose and intent of the Defense Base Act upheld.”
Marc Miles, an attorney for the families, said in an interview that they plan to appeal Dorsey’s ruling. And he didn’t think it would have any impact on the wrongful death case, which is set to go to arbitration in June and could be resolved before the appeal is heard on the Labor Department case.
“It’s an erroneous ruling,” Miles said. “As soon as we file an appeal, the ruling will have no force and effect, and probably never will if it gets overturned.”
Family members for Helvenston, Jerry Zovko, Wesley Batalona and Michael Teague first filed suit in January 2005. They have argued that Blackwater failed to prepare the men for the mission and didn’t provide them with appropriate equipment, such as a map, before sending them through volatile Fallujah.
Grisly images of two of the contractors’ charred bodies strung from a bridge over the Euphrates River were broadcast worldwide and triggered a U.S. siege of the restive city west of Baghdad.
Blackwater hired these guys as Independent Contractors and represented them as such to the IRS so they wouldn’t have to pay their half of the SS and Medicare Taxes.
At the same time they represented them as employees so they could secure the Defense Base Act insurance which is mandated by law for all US Government funded contracts overseas.
The cost of this insurance is cost reimbursable to Blackwater, meaning the taxpayer pays for the insurance. This insurance runs 50% + of their yearly salary, each.
I guess this judge thinks it’s OK for Blackwater to either commit tax evasion or insurance fraud or both.
If Blackwater wins the overall case it is likely that the taxpayer will also foot the bill for all the lawyer bills under the Defense Base Act.
The Defense Base Act is a license for companies behave negligently and only the dead, wounded, the taxpayer have to pay for it.
The taxpayer will be reimbursing all of the Defense Base Act claims to the insurance companies, AIG carries 90% of the DBA for Iraq and Afghanistan, under the War Hazards Act.