US embassy cable - 05KUWAIT4904

UNCLAS SECTION 01 OF 03 KUWAIT 004904 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR NEA/ARP MISENHEIMER 
 
E.O. 12958: N/A 
TAGS: PREL, CJAN, CVIS, KCRM, KU 
SUBJECT: PARLIAMENTARIAN REQUESTS ASSISTANCE FOR KUWAITI 
CITIZEN 
 
REF: STATE 160410 
 
1.  (SBU) Summary and Action Request.  In a letter dated 19 
November 2005, Mohammad J. Al-Sager, Chairman of the 
Committee on Foreign Affairs, Kuwaiti Parliament, wrote 
Ambassador requesting Embassy intervention with U.S. 
Department of Justice on behalf of Kuwaiti citizen Ali 
Hijazi, a principal in the Kuwaiti firm La Nouvelle.  Hijazi 
is a subject of an on going investigation regarding alleged 
contract irregularities involving a former employee of the 
KBR Corporation and La Nouvelle (see reftel).  Al-Sager 
asserts that the U.S. District Attorney for the Central 
District of Illinois has indicted the KBR employee and Mr. 
Hijazi without cause.  He notes that Kuwait and the U.S. do 
not have an extradition treaty, and that the U.S. would not 
have jurisdiction anyway regarding contracts concluded in 
Kuwait between two private companies.  He further alleges 
that Department of Justice has denied Mr. Hijazi due process 
and that the U.S. Attorney refused to speak with La 
Nouvelle's counsel.  Al-Sager asks that Embassy "intercede 
and express its concern to the Department of Justice with the 
hope that Mr. Hijazi's indictment would be dismissed and 
attempts to arrest, detain or extradite him around the world 
would cease."  See para 3 for the text of Al-Sager's letter; 
para 4 for Embassy's proposed response.  (Post understands 
that the Kuwaiti Ambassador provided an almost identical 
document to NEA.) 
 
2.  (SBU) Action Request:  We have no way to evaluate the 
validity or accuracy of Mr. Al-Sager's points.  However, 
Al-Sager is a senior official and a well-respected and 
valuable contact for Embassy.  Ambassador proposes, with 
Department concurrence, to send him the letter text in para 
4.  Embassy also requests Department assistance in drawing 
the attention of Department of Justice to the issues 
addressed by Al-Sager for their consideration with the 
objective in mind of meeting with La Nouvelle's counsel 
regarding the case.  End Summary and Action Request. 
 
3.  (SBU) 
 
Begin Text of Al-Sager Letter 
 
 
November 19, 2005 
 
H.E. Honorable Richard LeBaron 
American Ambassador 
Embassy of the United States of America 
Kuwait City, Kuwait 
 
My dear Mr. Ambassador: 
 
First, let me thank you for all of your personal efforts to 
strengthen the relationship between our two great nations. 
Second, I feel compelled to bring a matter to your attention 
that concerns a Kuwaiti-based company and one of its 
principals. 
 
La Nouvelle ("the Company") is a long-standing, Kuwaiti-based 
services company with an excellent reputation.  It provides 
valuable contracting services to numerous contractors and 
government customers throughout the region, including to the 
Government of Kuwait.  La Nouvelle was a passionate supporter 
of the Government of Kuwait and the Government of United 
States during the recent hostilities involving Iraq.  The 
Company and Mr. Ali Hijazi, one of its principals, worked 
closely on-site with the U.S. military and related 
contractors to supply and support the armed forces and the 
post-Saddam Government in Iraq.  They did so at great 
financial and personal risk.  I know and respect Mr. Hijazi 
and he is highly respected by my Government as well.  Mr. 
Hijazi is neither an American citizen nor a resident of the 
United States.  He does not own property or pay taxes in the 
USA. 
 
I have been informed of the following facts that I commend to 
your consideration.  Following the primary phase of 
hostilities, an American-based contractor, KBR, came under 
investigation by the U.S. military and Department of Justice 
because of potential improprieties involving certain payments 
and possible overcharges.  KBR was one of the many 
contractors that La Nouvelle had well served, often in dire 
situations and under extreme time pressure.  As part of its 
response to these investigations, KBR began to investigate 
many, if not all, of its contracts in the region. 
Regrettably, a commercial dispute arose between KBR and La 
Nouvelle.  KBR wrongly suggested that there was some 
impropriety with respect to Mr. Hijazi's attempt to support 
and invest in a nascent business venture (which is legal 
under Kuwaiti Law) of a former, low-level KBR contracting 
officer, Mr. Jeff Mazon.  KBR also wrongly suggested that 
there was some linkage between this attempted investment and 
an obvious pricing mistake on a small contract with La 
Nouvelle that KBR found during routine audit.  The contract 
in question was for desperately needed transportation fuel 
tankers at the Aerial Port of Debarkation in Kuwait and 
represented less than 1 percent of the business done between 
KBR and La Nouvelle.  In making this unsupported connection 
between two entirely unrelated circumstances, KBR ignored the 
very obvious nature of the pricing mistake, the fact that 
many other KBR employees besides Mr. Mazon were involved in 
review of this transaction, the fact that the subcontract was 
renewed--at the same erroneous price--by other KBR employees 
long after Mr. Mazon had left KBR's employ, and the fact that 
La Nouvelle had offered to adjust the contract price downward 
long before KBR even discovered the mistake. 
 
It was not uncommon for even high ranking KBR employees to 
leave KBR and go into business with or be hired by commercial 
entities in the Gulf.  Many did so on terms far more 
favorable than the abandoned arrangement between Mr. Hijazi 
and Mr. Mazon and many continued to work directly with KBR, 
unlike Mr. Mazon.  KBR investigators interviewed Mr. Mazon 
about the attempted investment, and Mr. Mazon voluntarily 
provided open and honest responses acknowledging the 
relationship and denying any wrongdoing.  Mr. Hijazi and Mr. 
Mazon likewise disclosed that the never-consummated 
arrangement occurred well after Mr. Mazon had decided to 
leave KBR, the fact it was supported by a written agreement, 
and, importantly, the fact that the investment had been 
abandoned.  Thus no money was every received or enjoyed by 
Mr. Mazon, who elected another career path.  In an apparent 
effort to seek leniency with the Justice Department, however, 
and presumably to obtain leverage in its commercial dispute 
with La Nouvelle, KBR reported the relationship between Mr. 
Hijazi and Mr. Mazon to U.S. authorities, along with a host 
of other perceived contracting issues unrelated to La 
Nouvelle.  La Nouvelle and KBR settled their dispute this 
past summer.  The US government did not over pay or lose any 
money over this contract with KBR. 
 
Sadly, after refusing to speak with La Nouvelle's counsel, 
the U.S. Attorney for the Central District of Illinois 
indicted Mr. Mazon and Mr. Hijazi and south Mr. Hijazi's 
extradition despite the absence of any relevant treaty.  The 
U.S. Attorney then refused to permit the court to rule on Mr. 
Hijazi's well founded Motion to Dismiss, mischaracterizing 
Mr. Hijazi as a fugitive in official documents and demanding 
that he be extradited and incarcerated in the U.S. before the 
Court considered the motion.  Based on what I am told, this 
situation is particularly disturbing and disrespectful given 
the services provided by La Nouvelle, the wholesale absence 
of any criminal conduct, and the extraterritorial abuse of 
Mr. Hijazi despite the lack of any U.S. jurisdiction.  I am 
also told that Mr. Hijazi who is neither a US citizen or a 
resident of the USA performed his work under Kuwait law, in 
the territory of Kuwait, under a Kuwaiti commercial company 
that performed services as a subcontractor to KBR in Kuwait. 
Further, it seems that not only was the attempted investment 
well after Mr. Mazon left KBR and eventually abandoned, but 
La Nouvelle also successfully sued KBR with the assistance of 
Hogan and Hartson LLP, the oldest and largest Washington D.C. 
based firm, in U.S. Federal court for payment on the contract 
at issue.  La Nouvelle settled with KBR on the contested 
contract for full payment, receiving a substantial payment 
with the knowledge and approval of the U.S.  Moreover, KBR 
counsel have acknowledged that they are aware of no quid pro 
quo for Mr. Hijazi's documented, yet ultimately unsuccessful, 
attempt to enter into a long-term business venture with Mr. 
Mazon.  Throughout all of this, I am informed that the U.S. 
Government never even consulted with the Government of 
Kuwait. 
 
Your Excellency, I would greatly appreciate it if you might 
look into this situation.  La Nouvelle had no contract with 
the U.S. Government, only with KBR.  Respected counsel in 
Kuwait have examined the relevant contract and have found no 
irregularities.  Counsel in Kuwait also have reviewed the 
indictment and are concerned that U.S. authorities have 
attempted to assert jurisdiction.  I am further advised that 
U.S. law likewise suggests that there is no jurisdiction. 
Some would suggest that these policies fail to honor Kuwait's 
sovereignty and put all Kuwaitis at risk for unfair 
prosecution in the U.S. for commercial transactions with U.S. 
corporations.  Here, Mr. Hijazi is in peril of being 
extradited to the U.S., imprisoned, and unfairly prosecuted 
all for a case where the alleged "bribe" post dates Mr. 
Mazon's employment with KBR, the transaction was never 
completed, and the U.S. ultimately approved payment for the 
work done on the contract.  Neither Kuwait citizens nor 
others in Kuwait should be subject to such extraterritorial 
abuses of the U.S. judicial system.  Had the U.S. attempted 
to prosecute in Kuwait, where all the relevant activity 
occurred and where the contract with KBR was executed and 
performed with distinction, the U.S. would have had no legal 
grounds to have brought the case, and a Kuwaiti court would 
have most certainly dismissed it. 
 
Under these circumstances, it would be greatly appreciated if 
the U.S. Department of State might consider it appropriate to 
intercede and express its concern to the Department of 
Justice with the hope that Mr. Hijazi's indictment would be 
dismissed and attempts to arrest, detain or extradite him 
around the world cease.  It is also reasonable to inquire 
whether the Department of Justice might consult the 
Government of Kuwait, in the future, when it proposes to 
attempt to impose its jurisdiction on commercial entities and 
residents of Kuwait. 
 
Respectfully submitted, 
 
Mohammed Al Sager (signed) 
Chairman of the Committee on Foreign Affairs 
Kuwaiti Parliament 
 
End Text of Al-Sager Letter 
 
4.  (SBU) 
 
Begin Text of Proposed Embassy Response to Al-Sager 
 
Dear Mr. Al-Sager: 
 
I have received your letter of 19 November inquiring about an 
on going investigation regarding alleged contract 
irregularities involving the KBR Corporation and the Kuwaiti 
firm La Nouvelle. 
 
This matter has also been raised in Washington by Kuwait's 
Ambassador to the United States.  I am forwarding your letter 
to the Department of State for consideration of appropriate 
action. 
 
End Text of Proposed Embassy Response to Al-Sager 
 
 
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