One of the interpreters, Ali Kanaan, suffered hearing loss and burns to more than a third of his body as a result of a 2006 suicide bombing.
Kanaan decided to take the offer.
"If you obey Dr. Emad's rules, you'll be fine," he said. "If you don't, you got kicked out."
Kanaan later immigrated to the U.S. as a refugee. Now 23, he works 12 hours a day in a cigarette store in a Denver suburb. At night, he cleans the stove hoods in restaurant kitchens. The caustic chemicals irritate his skin grafts, he said.
Hatabah, interviewed in Amman, the Jordanian capital, said the interpreters received exemplary care. He denied pressuring any of them to sign settlements or threatening to send them back to Iraq.
Hatabah said AIG's office in Dubai, United Arab Emirates, sent him settlement agreements and his only role was to witness the signing. He said that because he is employed by AIG, he took care never to act as the treating physician for any interpreters, in order to eliminate even the appearance of a conflict of interest.
"I believe we did more than a good job," Hatabah said. "It was a perfect job."
Few know rights
Interpreters and other injured workers can appeal insurers' denials through a dispute resolution system in the Department of Labor. Ultimately, an administrative law judge decides the matter. The department must approve all settlements, and officials are supposed to review offers with the affected workers to make sure compensation is adequate.
"The whole purpose is to recognize that a guy who's never had a $100,000 check in his life before is a sucker for a bad deal," said Joshua Gillelan, a former lawyer for the department who now represents civilian workers injured in Iraq and Afghanistan.
But few Iraqis know they have rights in the system, and interpreters interviewed for this report said the Labor Department never contacted them about settlement offers.
"Nobody called me or told me or did anything for me," said Nazar Taei, 40, whose legs were riddled with shrapnel during a mortar attack in 2006.
After he arrived in the U.S. as a refugee, AIG offered Taei an $18,500 settlement, he said. He was dissatisfied with the amount, but accepted it.
"I told AIG, 'Is this enough for somebody to start his life, who lost his job, a part of his life?' " recalled Taei, a Denver resident who recently enlisted in the U.S. Army and hopes to become an interpreter. "They said, 'Those are the rules. We can't do anything for you.' "
In at least one case, an AIG representative discouraged Iraqis from contacting the Labor Department. In an e-mail exchange last year, the father of an L-3 interpreter killed in a car bombing wrote to AIG, seeking to speed payment of death benefits.
The father, who revealed details of the case on condition of anonymity, asked an AIG examiner in Dubai about contacting Labor officials.
"I wouldn't advice [sic] you to do so," the examiner replied by e-mail. "You would be taking the full responsibility of the outcomes."
Labor Secretary Hilda Solis declined requests for an interview. In a statement, the Labor Department said the increase in the use of civilian contract workers in Iraq and Afghanistan has posed formidable challenges for the war-zone insurance system. The department has no employees posted in Iraq, Afghanistan or surrounding countries, nor any speakers of Arabic or Afghan dialects.