A Kuwait-based contractor now building the new $592-million US embassy in Baghdad has some pretty heavy baggage. It has been repeatedly accused of exploiting low-paid Asian workers and coercing them to work in war-torn Iraq against their will under US funded contracts.
A lot of people view such labor practices as labor trafficking, including the Bush administration. Nevertheless, the US State Department quietly awarded the half-billion-dollar-plus deal — no questions asked.
When the contract with First Kuwaiti General Trading & Contracting, aka FKTC, was first unveiled last summer, the State Department pulled back the announcement immediately. My efforts since July to get State to explain the move went unanswered until February of this year.
FKTC has been accused of pushing by low-paid workers from the Philippines and Nepal into Iraq. The workers say they were recruited for jobs in Kuwait, but when they arrived at First Kuwaiti, they were then told those jobs had disappeared.
The workers say FKTC managers offered them a few options: Either hit the streets of Kuwait without a dime, food or a visa until the police take you to jail — or go to Iraq. (Oh, and by the way, pay back the plane fare that got you to Kuwait in the first place before you leave town.)
The workers say they slept in company housing while they thought about it and they were served only rice and water.
Diplomatic officials from Nepal and the Philippines tell similar stories. So do former First Kuwaiti business associates. None of these people know each other, yet they all weave the same tales.
Here’s my down-and-dirtyCorpwatch tale of the US embassy.
Otherwise read on for a fuller rendition:

Wadih al-Absi dreams of magazine covers celebrating his rise as a global player in large-scale engineering and construction.
The Lebanese Christian began his career as a laborer installing drywall on building projects after escaping war in his home country in the late 1970s and moving to Kuwait. The Persian Gulf nation welcomes, even recruits, expatriate blue-collar workers like al-Absi once was to do the grunt work and domestic chores for its booming, oil-rich economy. Glitzy shopping malls, flashy cars and sprawling villas reflect the countries affluence even as migrants make up the nearly two-thirds of this tiny desert state’s 2.3 million population.
Now, building his own personal fortune, al-Absi, too, relies on migrant labor. His Kuwait City firm, co-owned by a member of one of Kuwait’s richest and most powerful families, is one of the larger Middle East companies that collectively ship tens of thousands of cheap day laborers to war-torn Iraq. Once delivered, the low-paid workers earn just dollars a day under US contracts in support of the Pentagon’s military presence and reconstruction efforts.
Recruited from some of the poorest countries in Asia, these laborers work 12 hours a day, seven days a week to provide essential services once performed by the military itself. Called “third country nationals,” or TCNs, they toil in military camps performing a sundry of tasks considered unsuitable for US war fighters. They work construction, drive trucks, run laundries, clean latrines, pick up rubbish and operate stores, dining facilities and warehouses. Without them, and these “body shop” contractors that provide the, the US and coalition military camps — virtually small cities — would shut down.
It is a lucrative business for al-Absi’s company, First Kuwaiti General Trading & Contracting, or FKTC, where he acts as both general manager and co-owner. Less than three years ago FKTC boasted of having $35 million in assets. Today, the firm has racked up hundreds of millions of dollars in US contracts in Iraq, supercharging the company well past the $1 billion mark. With 7,000 employees in Iraq, the company’s Web site lays claim to holding $800 million construction and supply contracts directly with the Army for military camps, plus over $300 million performed for Halliburton ’s multibillion prime contract to perform military logistics for the occupation forces in Iraq.
Trim and handsome with the looks of a gentleman in his prime, it’s the kind of success that allows al-Absi to enjoy finely tailored suits with French cuff shirts, send his children to American universities and enjoy the fruits of being a newly-minted millionaire.
But lucrative as his business is, it is also an increasingly controversial one. First Kuwaiti has been accused repeatedly of coercing low-paid Asian laborers to work in Iraq’s war zones against their will. Once there, FKTC workers and American contractors witnessing their plight have openly complained that the low-paid Asians have endured abysmal working conditions, live in crammed housing, eat poor food, and lack satisfactory medical care and safety gear.
Filipino Ramil Autencio is one such laborer who worked for FKTC. Originally recruited for employment by MGM Worldwide Manpower in the Philippines, the 37-year-old air conditioning maintenance man said he had planned to work at Crown Plaza Hotel in Kuwait for $450 a month. That all changed in December 2003 when he arrived in Kuwait. He says his recruitment contract was sold to FKTC.
“They forcibly brought me to Iraq when my contract provided that I would work in Kuwait,” he claimed. In 2003, Autencio and other Filipinos found themselves cooped up in FKTC housing for a month without pay and minimal food as they awaited their transfer to Iraq, he said. “They threatened to put us in prison and they took everything we had, including our passports. The police would arrest us if we went out.”
Al-Absi, who speaks excellent English with the collegial frankness of a construction worker, denies the allegations of ill treatment and repeated reports of trafficking.
“It’s bullshit,” he said during a telephone call from Kuwait after emailing electronic documents apparently signed by Autencio and others agreeing to work in Iraq. “Total bullshit.”
The agreement also lays out Autencio’s salary: $346 a month for 8-hour days, seven days a week, plus $104 a month for a mandatory 2 hours overtime every day.
Al-Absi insists that Autencio was paid in full.
“He sued me in court over this, and he lost,” Al-Absi said. “He doesn’t have a case against us.”
Besides, if FKTC treated workers badly, why do they still work for FKTC and renew their contracts every six months, al-Absi asks. Why does his roster of US contracts continue to grow larger and larger and the US Army has awarded the company certificates for a job well done?
“Our camps rank number one of all labor providers,” Al-Absi said during a recent telephone interview. “Come and see. KBR, the military and everybody is all very happy.”
Still, Autencio does not back down on his story. “All the contracts I had referred to Kuwait,” he said. “They pushed me into Iraq when they opened jobs there.”
Meeting over a morning coffee last September at the posh Four Seasons Hotel in Washington, a legendary Georgetown retreat favored by pampered heads-of-state, Hollywood elite, the Rolling Stones and business executives, al-Absi’s eyes widened as he talked about his company’s greatest prize yet — the new US embassy construction in Baghdad.
The massive $592-million project may be the most lasting monument to the US occupation in the war-town nation. Located on a on a 104-acre site along the ancient banks of the Tigris River, plans call for a totally self-sustaining compound of 21 buildings, a swimming pool, a power station and a food court. Scheduled for completion by June 2007, the installation will be the largest, most secure diplomatic embassy in the world — covering two-thirds the area of the National Mall in Washington, DC. — and home to more than 1,000 US embassy workers.
With a prestigious notch like that on the company’s resume, First Kuwaiti will step onto the world stage, al-Absi beamed. “I dream about what it means,” he said. “We have become a global company.”
But he asked to keep the embassy contract a secret until the first floors were built for security reasons. The dangers of an attack are just too serious. Even his personal residence had been bombed in the past, he explained. “I am all for transparency, but this is Iraq,” he said.
Despite the new embassy’s importance, the State Department has also resisted publicizing the contract. Only after weeks of inquiries, did the State Department confirm that FKTC had been selected for all but the most classified construction portion of the project. The department also acknowledged that when a public announcement of the first $370-million in FTKC contracts were awarded in July on the Web site FedBizOpps — standard practice for all government contracts — it immediately yanked the announcement down one day later for security reasons, according to department spokesman Justin Higgins.
When first asked about mistreatment of FKTC’s labor force last August, al Absi threatened to sue if the allegations were published. At the time, I was investigating the claims of Autencio and other Filipinos working in Tikrit for FKTC in late 2003 and early 2004. They complained they were overworked, served poor food, and received less salary than what was agreed to in their contract.
Autencio said that conditions became so bad that he and a group of 46 Filipinos decided to escape Iraq by hitching rides from Filipino truckers. Another Filipino serving in the US Army also helped them. Traveling by night, they reached Kuwait in three days time. Their numbers were so large that the Kuwaiti police could not stop them and they sought refuge in the Philippines Embassy, Autencio said. “The Kuwait police couldn’t do anything because we outnumbered them. We shoved them back when they asked for our papers. We were bolder because one of us had died by then.”
No Philippines embassy official could be found to comment on the alleged incident, but diplomatic affairs between Kuwait and the Philippines can be a touchy matter. The Philippines makes 10 percent of its gross national product off Filipinos employed around the globe, including Kuwait where an estimated 85,000 Filipinos live and work. Soon after the coalition invasion of Iraq in March 2003, a high-level Philippine delegation (led by Secretary of Foreign Affairs Roberto R. Romulo) visited Kuwait the following October to nail down agreements for Filipino manpower to labor under the flood of lucrative contracts for reconstruction and military support.
One of the delegation’s first visits was with the powerful Marafie Group of Companies, a consortium operated by one of the most powerful mercantile families in Iraq. Mohammad I. H. Marafie, chairman and co-owner of FKTC, is a member of that family. The Philippines has since soured on the occupation of Iraq. It has dropped out of the coalition and bans and Filipino nationals from working in Iraq for safety reasons.
One high level official with the Philippine Department of Foreign Affairs who requested anonymity did acknowledge that there had been numerous disputes in the past with Iraq contractors employing Filipinos, including FKTC. Poor food, medical care, crammed living quarters, salaries and work hours “have been serious issues,” the official said. “First Kuwaiti is well known.”
But the official cautioned that there was no evidence of labor trafficking by the company.
Still, accusations similar to Autencio’s also have been reported elsewhere.
Nepalese worker Krishna Bahadur Khadka told the Kathmandu Post in September 2004 that after he arrived in Kuwait for a job he was told by FKTC that if he and 121 other workers would be sent back to Nepal if they refused travel on to Iraq for jobs.
“I was not happy at first as my contractors did not provide me a job as heavy vehicle driver as pledged. But they had offered Rs 175,000 [$2,450], and one would not be able earn half that amount in Kuwait. So I signed the papers,” Khadka said, adding that he had already invested $1,680 as payment to a recruiting agent in Nepal so he could go to Iraq.
Noting that some recruiters misrepresent jobs, Al-Absi claims that Khadka’s allegation, too, is a lie and that Khadka misrepresented his skills. Again al-Absi presented a contract identifying the work site as “mainly Iraq.” It bore Khadka’s signature and fingerprint.
“Khadka is a troublemaker who was trying to organize the workers,” al-Absi said, noting that thousands of TCNs working for First Kuwaiti have renewed their contracts with raises. “We treat our workers with excellent care,” he said.
More recently, an Oct. 10 story in The Chicago Tribune reported on four-dozen Nepalese workers waiting in Kuwait for jobs on American military bases in Iraq, but then changed their minds in September 2004. On television, they had just seen 12 Nepalese hostages in Iraq executed at the hands of insurgents. Some of the 12 believed they would get jobs in Jordan, but their work contracts have been sold several times and they were pressured into traveling on sent to Iraq for work with a Halliburton subcontractor based in Amman, Daoud & Partners.
In Kuwait, a manager from FKTC handed the panicked workers an ultimatum, reports the Tribune: either travel to Iraq to fulfill their contracts and they would get food and water or get nothing and be released on the streets of Kuwait City to fend for themselves. Undoubtedly, none had the resources to find their way back to Nepal.
“The company was forcing them to go to Iraq,” Lok Bahadur Thapa, the former acting Nepalese ambassador to Saudi Arabia, told the Tribune.
Thapa successfully urged the contractors to release the workers from their contracts. He also persuaded the Kuwaiti government, albeit briefly, to ban the traffic of Nepalis across the border into Iraq.
Al-Absi, acknowledged that Thapa helped Nepalis at the firm’s compound return to their homeland. But he denied anyone from First Kuwaiti tried to coerce them into Iraq. “It’s nonsense,” he said.
Such stories recently prompted the US State Department join forces with the Defense Department into possible labor trafficking by Middle East firms doing business in Iraq.
“Our people are investigating the issues,” said State Department spokesman Justin Higgins after US Ambassador John Miller, head of the Office to Monitor and Combat Trafficking of Persons, left for the Middle East in late January.
When I inquired last July about widespread complaints about poor working conditions and the possible coercion of low-paid Asian laborers to work in Iraq, the Army said an investigation was underway. That investigation began and ended with the Army raising the issues with Halliburton “for them to address with appropriate action within the terms of the contract,” said Army spokeswoman Melissa Bohan in an e-mail this month.
As FKTC, managing its labor supply business in Iraq is a nightmare. Workers are always complaining. They miss their families, they are frightened of the war, they want their pay distributed to different bank accounts around the world. The problems are ongoing, he said, but he continues in the business because the US Army wants him too. “I wanted to pull out and we started to pull out, but they say, no, no, you started this. Now you have to finish.”
Lucille Quiambao and Howie Severino reported from the Philippines for this article