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In the Courts
Fifth Circuit Clarifies the Scope of the Anti-Kickback Act
On Feb. 3, the U.S. Court of Appeals for the Fifth Circuit partially reversed an Eastern District of Texas ruling finding that two employees of Kellogg Brown & Root, Inc. (KBR) acted on behalf of the company in accepting kickbacks for subcontract work on a United States Army contract. The published opinion of the panel of three judges stated that while Robert Bennett's behavior could be imputed to KBR under the Anti-Kickback statute, his son, James Bennett, did not have the appropriate level of managerial control to hold his employer liable for his behavior.
KBR was awarded a contract with the Army to provide logistical support during its operations. KBR would sometimes hire subcontractors to fulfill its work orders from the Army. It was one of these subcontractors, EGL, Inc. (EGL), that allegedly provided gratuities to Robert and James during the time they were employees at KBR. While KBR argued that the $5,000 the subcontractors spent was simply for general relationship building, the government successfully argued that the entertainment and food the KBR employees received from EGL was a bribe meant to influence KBR's treatment of the subcontractor.
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