UPDATE 1-US Justice Department joins KBR kickbacks lawsuit

Wed May 5, 2010 4:10pm EDT

Related Topics

* Lawsuit had been filed in federal court in Texas

* KBR employees alleged to have received meals, drinks

WASHINGTON May 5 (Reuters) - The U.S. Justice Department said on Wednesday it joined a lawsuit against KBR Inc (KBR.N) that alleges employees of two freight forwarders provided unlawful kickbacks to KBR transportation department employees.

KBR has a contract for logistical support of U.S. military operations in Iraq, the department said. The lawsuit also alleged overbilling by a KBR subcontractor in the Balkans under a military contract.

The lawsuit had been filed in federal court in Texas under the so-called whistle-blower provisions of the False Claims Act by two individuals in the air cargo business -- the industry at issue in the case.

The lawsuit alleged the two freight forwarders, Eagle Global Logistics and Panalpina Inc, provided unlawful kickbacks in the form of meals, drinks, tickets to sports events and golf outings to KBR employees.

"Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks," said Tony West, assistant attorney general in charge of the department's civil division. "We are committed to maintaining the integrity of the Department of Defense's procurement process." (Reporting by James Vicini; editing by Leslie Gevirtz and Andre Grenon)

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