AIG Exec Called to Congress to Answer for Handling of War-Injured Contractor Claims

June 18, 2009— -- Two civilian contractors who have accused AIG of making their recoveries from war-related injuries a "living nightmare" will have the opportunity to come face-to-face with company executives at a hearing today before the House oversight subcommittee on domestic policy.

Former KBR truck drivers John Woodson and Kevin Smith were called to testify after coming forward on 20/20 and Good Morning America to describe their battle to get AIG to cover basic medical treatment after they were seriously injured in Iraqi insurgent attacks.

Their stories were featured in a joint investigation between ABC News, the Los Angeles Times and the non-profit group ProPublica that revealed how AIG had engaged in a pattern of "delaying and denying" claims of disabled contractors while rewarding its executives with millions in bonuses, and hundreds of the thousands of dollars in lavish retreats.

Click here to see pictures of the people fighting AIG.

Kristian Moor, the president of AIG's massive insurance operation, AIU Holdings, is expected to receive tough questions about the company's handling of the contractors claims. He is expected to appear with assistance of the company's Chief Claims Officer, Charles Schader.

"They have cheated the people who have been injured," said Woodson, who lost his left leg below the knee and most of his eyesight in a roadside bomb blast in Iraq. "Just a blatant disregard for a human being, no compassion at all for what we're going through."Woodson had to fight for months to get AIG to provide him with an improved prosthetic and wheelchair ordered by his doctor. His case has now been turned over to the Department of Labor, which oversees the program, but he says that AIG still owes him thousands of dollars in unreimbursed expenses.

Kevin Smith has been waiting for nearly six months for AIG to approve a course of treatment for his post-traumatic stress disorder, even though a judge ruled that the insurance giant was responsible for covering those costs last December. He says that AIGs refusal to approve treatments and fully pay his doctors bills have dragged out his recovery and strained his family's finances.

"No matter how hard we try, we can't move forward," said Smith, who was severely injured in the leg five years ago. "We're stuck spinning our wheels trying to make ends meet."

AIG declined to comment on Woodson and Smith's cases.

Injured contractors who worked overseas are entitled to medical and disability benefits under a federal law called the Defense Base Act. Under the program, AIG has handled 36,000 since 2002, about 90 percent of all claims.

The Labor Department claims that the law does not provide it with much enforcement authority to hold AIG accountable, though attorneys for the injured contractors point out that the department can impose civil fines on insurance carriers for late payments to contractors, like the expenses Woodson and Smith say they are still owed.

It is a power the DOL has used only "sparingly," according to a memo prepared by congressional staffers for today's hearing. AIG told the committee that it has only been fined 50 times for delaying payments to injured contractors over the past seven years.

The deputy secretary of the Department of Labor, Seth Harris, is also scheduled to testify.

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