UPDATE: DOJ Intervenes In Lawsuit Against KBR On Kickbacks

The Justice Department said Wednesday that it is joining a lawsuit alleging that employees of KBR Inc. (KBR), the prime contractor for logistical support of U.S. military operations in Iraq, took kickbacks from two freight-forwarding companies.

The department alleged that KBR employees accepted meals, drinks and tickets to sports events and golf outings from freight-forwarding companies Eagle Global Logistics and Panalpina Inc., a unit of Panalpina WeltTransport Ltd (PWTN.EB).

The lawsuit was brought under the federal False Claims Act, which provides financial rewards to litigants who report fraud against the government.

KBR spokeswoman Heather Browne said gifts of dinners, tickets and other items would violate company policies, "and KBR was not aware of these violations." She said the dollar amount of the gifts identified by the government totaled less than $20,000.

"KBR will review the litigation when it is received and will continue to cooperate with the government," Browne said.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

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