Civilian Contractors Face Perils in Iraq

This article was written by CBS News chief invesigative correspondent Armen Keteyian and CBS News producer Phil Hirschkorn.

As of mid-November — more than 3½ years after Operation Iraqi Freedom began — 7,987 civilians employed by U.S. companies have been injured on the job in Iraq, and 679 have been killed, according to the latest Labor Department statistics.

Retired Army Sgt. Sam Walker is one of the many civilian contractors who suffered injuries due to an insurgent attack and has struggled to get help since coming home. His problems began a few days before Christmas 2004.

Walker had sat down with friends for lunch in a military dining tent in Mosul. As he popped a french fry in his mouth, a suicide bomber was only steps away.

"The next thing you know, there is a bright explosion coming — a bright light coming toward me," Walker says. "I am picked up and thrown over the table at that time, from the explosion."

The blast burned the side of his head, and shrapnel wounded his elbow and knee. Copper wire from the bomb's detonator stuck to his clothes, as did human flesh. Twenty-two people were dead.

One of the victims wore a wedding band. "His arm was laying on a stretcher, but his hand was hanging off," Walker says. "I could see blood running down his finger from his wedding band."

In his nightmares, Walker relives the horrible experience over and over. Bad memories are triggered by odors like the smell of french fries and sights as common as that wedding band.

Walker was in the Mosul mess tent on Dec. 21, 2004, because immediately after leaving the army, he had gone to work for Kellogg Brown and Root, known as KBR, a subsidiary of Halliburton, the main private company hired by the Pentagon to help rebuild Iraq and support the troops. Walker earned a six-figure salary for running a recreational facility for soldiers.

After the bombing, Walker went home to Georgia. He couldn't work, developed a short temper and became socially withdrawn. Walker says KBR just forgot about him.

"They didn't call and say, 'Hey, how ya' doin'? Is everything OK?' Didn't hear anything from them," he says.

Walker's health care needs fell to KBR's insurance carrier, AIG Worldwide. Medical records show AIG's doctor and Walker's diagnosed him as suffering from post-traumatic stress disorder, or PTSD.

"I had heard people in the military, in the old days, people called it 'shell shock.' Person was shell-shocked, you know, hey, you think they're crazy. Now I'm shell-shocked," Walker says.

Yet AIG denied his claims, challenging "the nature and extent of the disability," according to documents. The company contests about 30 percent of all Iraq claims.

Unable to keep a job and with his debts mounting, Walker contacted an attorney to help him get reimbursed for counseling and physical therapy for his back and leg injuries.

Houston-based attorney Gary Pitts represents soldiers afflicted with Gulf War Syndrome from the first U.S. invasion of Iraq and more than 150 civilian contractors hurt in this war. Pitts eventually filed a complaint with the Labor Department. hoping for an order forcing AIG to pay Walker's medical bills.

The Labor Department administers a federal law called the Defense Base Act that requires all U.S. employers to insure all workers sent to work on government contracts in hazardous areas like Iraq and Afghanistan. When costly injuries occur as a result of hostile action — bullets and bombs, as opposed to accidents — a second law, called the War Hazards Act, allows the employer's insurer to be reimbursed by the government for payments.

To date, insurance companies such as AIG have received $3.2 million in reimbursements for medical and workers compensation claims paid to 114 civilian contractors injured in Iraq, according to the Labor Department. Another 15 reimbursement requests are pending.

KBR, with its fleet of drivers, has suffered more casualties in Iraq than any other company. It has seen more than 50 employees killed and 420 wounded by insurgent attacks or improvised explosive devices, known as IEDs.

In 2004, Kansas truck driver David Meredith, the son of an Army colonel, saw Operation Iraqi Freedom as a chance to serve his country — and his income. He stood to make $80,000 a year, and like all American civilian contractors, it would be tax-free if he stayed in Iraq at least 330 days. Meredith signed up for a year with KBR and wasn't naïve about the risks. By the summer of 2005, he had become the driver who would typically bring up the rear of a convoy.

"If one of my drivers was injured or his truck broke down for any reason, I was to get that driver out of that truck and get him out of there," Meredith says. "I was their last hope or chance. I took my job very seriously."

On Aug. 12, 2005, Meredith, nicknamed "Scout," saw chaos on the road from Fallujah to Ramadi. An IED blew up next to a truck in his convoy. Then the convoy leader's voice crackled on the radio.

"Scout, I don't care what you have to do, you get up there and get that man out of his truck," Meredith recalls hearing. He proceeded to the damaged truck.

"His windshield was blown out, laying in the middle of the street. His passenger door was blown open, and I knew at the very least the man was hurt," Meredith says. "I climbed up the side of the passenger side of the truck ready to pull him out. There was nothing left. There was nothing left of him — nothing at all."

Meredith was so stunned he didn't realize he was being shot at. Soldiers escorting the convoy yelled at him to take cover behind their tank. After a 45-minute firefight, Meredith led the convoy out of the kill zone. Back at the base, he broke down in tears.

"I had days where I contemplated suicide," Meredith says.

When he came home at the end of 2005, truck driving was fraught with flashbacks.

"I was seeing the IED blasts going off in front of me, the mushroom clouds," Meredith says.

Meredith was irritable and depressed. His wife called KBR's headquarters in Houston, and the company offered to find him a local doctor, who later diagnosed him as having PTSD, according to documents.

Meredith says an adjuster for AIG, KBR's insurer, pressed him about why he had waited five months to file a claim.

"From insomnia to depressed feelings and thoughts; I figured it was a phase. I would get over it on my own. I didn't need help. I didn't think I needed help," Meredith says.

Documents reveal AIG rejected his claims because of "late reporting" and lack of "medical evidence." To make matters worse, the antidepressant his doctor prescribed makes Meredith too drowsy to drive a truck.

"I hope someday that I won't have to take medication. Truck driving is all I have ever known," Meredith says. "I feel like KBR has pretty much disposed of me. I did my year. I met my one-year requirement to them. They don't need me anymore. There is someone else that'll take my place and do my job. You know what you were getting into when you went over there. Deal with it. That's how they have made me feel."

KBR says all recruits are informed about the medical benefits and dangers of the job. "During the training process, we spend most of our time giving recruits all the reasons they should not accept this job," spokeswoman Melissa Norcross says.

AIG, which covers about 80 percent of civilian contractors working in Iraq, would not discuss the cases of Walker and Meredith.

"It is our policy not to discuss the specifics of individual claims with the media," said AIG spokesman Chris Winans. "Some claims can be more contentious than others, and post-traumatic stress disorder is often not as immediately obvious as, say, a physical injury."

Winans also rejected the notion that rejecting claims was profitable. "An insurance company that looks for ways to deny claims as a way to fatten the bottom line will be looking at a very small business," he said.

In the end, Winans said, AIG pays benefits on 90 percent of the Iraq claims "when appropriate documentation is received" — the same rate paid out on domestic claims. Nevertheless, plaintiffs attorneys like Pitts argue, the insurer drags its feet on certain claims that should be paid right away.

Nineteen months after the Mosul bombing, Pitts won Walker's claim at an administrative hearing, when a judge awarded Walker the maximum disability payment of $1,067 a week dating back to the attack, plus "reasonable and necessary" care for the rest of his life. Pitts is now handling Meredith's case.

"It's about seeing help, getting help, in order to stop your mind from trying to revert back to where you been," Walker says. "If I can do that, they can keep the money."

Statement of David Meredith E-mailed to CBS News

As I sat listening to the radio just days before Veterans Day, listening to a radio station talk about honoring the veterans with a parade, I wondered if our civilian contractors will ever be recognized as veterans. We went to Iraq to serve our country. We have casualties and even honor our fallen comrades, but we are not recognized by our country as veterans.

We have been called the Shadow Army in the Middle East, we have even been mislabeled as mercenaries. We are criticized because we made more money than our troops who are over there fighting for our freedom. We did not carry guns, yet we stood beside our troops and did what we were sent there to do. Few civilians that come home are honored with medals, but those medals that are offered come with a price, so most are turned down, maybe even forgotten.

Please don't misunderstand me, I love my country and would never take anything away from the men and women of our armed forces who have fought for our country. They deserve Veterans Day and should rightfully be recognized. But what about the men and women who do not wear a uniform who served our country as well? We are America's unknown soldiers. After Vietnam, the people of this great land that we all live in swore our soldiers returning home would never be mistreated or dishonored again, but 30 years later, it is happening once more. Not to our military, but to the civilian contractors — the men and women who stood beside our troops in the face of danger.

America doesn't know us, because we don't wear a uniform or carry a weapon. For many contractors, just as soldiers alike, the war doesn't end just because we came home. We shed silent tears by day and scream in terror by night. We cry for help and are sometimes told there's nothing wrong with us. We're not asking for glory, but only to be remembered. We are America's Unknown Soldier, the American civilian contractor, Operation Iraqi Freedom vets.

David "Scout" Meredith