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The War Profiteers - War Crimes,
Kidnappings, Torture and Big Money |
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March 21st,
2008 - Democrats Want Contract Fraud Documents |
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Democrats Want Contract
Fraud Documents By Lara Jakes Jordan Associated Press March 21, 2008 Washington - House Democrats
demanded documents Thursday about a multibillion-dollar overseas contracting
loophole to track down how - and why - the Bush administration slipped it
into plans to protect taxpayer money. Leaders of the House
Oversight and Government Reform Committee gave the administration until April
4 to turn over the documents or, aides have said, face a possible subpoena. The controversial loophole
has irked Democrats and Republicans alike. But it has the support of a trade
association that lobbies on behalf of giant global government contractors,
including Blackwater USA, KBR Inc., Boeing Co., CACI International Inc. and
Lockheed Martin. The United States has spent
more than $102 billion over the last five years to help rebuild Iraq and
Afghanistan. In that time, the Justice Department has uncovered at least $14
million in contract bribes in those two nations alone. "Preventing fraud by contractors
overseas should be a high priority," Democrats wrote in letters sent to
the White House Office of Management and Budget and four other executive
agencies. "Instead, the exemption for contracts to be performed overseas
appears to have been inserted in the rule late in the process and against the
wishes of the Department of Justice, which raises serious questions as to why
and how such a policy was developed." The letters were signed by
House Oversight Chairman Henry Waxman of California and committee members
Reps. Edolphus Towns of New York and Peter Welch of Vermont. Welch, who first
called for the investigation, vowed "to get to the bottom of this." "Who snuck this in at
the eleventh hour and why?" Welch said in a statement. "No
contractor should be given a free ride to defraud taxpayers, at home or
abroad." OMB spokeswoman Jane Lee
said Waxman's request was being reviewed and that the rule in total would
help curb fraud, but she declined to discuss the loophole. Letters also were sent to
the Justice and Defense departments, NASA and the General Services
Administration. Thursday's demand marked the
first step in a congressional inquiry of the loophole that was quietly
slipped into plans otherwise aiming to crack down on waste, fraud and abuse of
taxpayer dollars spent on government contracts. The loophole was first
reported last month by The Associated Press. The government spends an
estimated $350 billion a year on contracts. Last May, facing growing
cases of fraud and increasing spending overseas, the Justice Department
introduced plans to force companies to notify the government about evidence
of contract abuse worth $5 million or more. Currently, contractors report
evidence of abuse on a voluntary basis, and the number of company-reported fraud
cases has declined steadily over the past 15 years. By November, after it left
the Justice Department and was published in the Federal Register, the
proposed rule specifically exempted "contracts to be performed outside
the United States." The Justice Department and
the Office of the Special Inspector General for Iraq Reconstruction have
asked the exemption be eliminated before the rule becomes law. Additionally,
Sen. Charles Grassley, R-Iowa, has threatened to block the loophole in the
federal budget if the administration does not do away with it. OMB's Office of Federal
Procurement Policy has repeatedly declined to comment on the loophole or how
it was added to the overall fraud crackdown. The House inquiry is looking
at whether the exemption was added at the request of private firms, or their
lobbyists, to escape having to report abuse in U.S. contracts performed
abroad. Alan Chvotkin, executive
vice president of the Professional Services Council, says the loophole merely
follows long-standing Defense Department policy that only covers domestic
contracts. Without the exemption, Chvotkin said, U.S. firms that subcontract
out work to foreign businesses could be unfairly held liable for abuse that
they have little or no way of preventing. The Arlington, Va.-based
Professional Services Council represents more than 300 government contractors
and other businesses. Chvotkin said the lobbying firm did not ask for the
loophole but agrees with it. The Professional Services Council is among firms
and other business groups, including the U.S. Chamber of Commerce, that
oppose the overall rule. "We're not trying to
exempt companies or suggest that fraudulent behavior in overseas contracts
should go unpunished," Chvotkin said in an interview this week. "If
somebody's guilty, hold them accountable. We've just stopped short of
mandatory disclosure as part of a government-wide rule that goes everywhere
for everything." The rule - with or without
the loophole - could become law at any time. "It's hard to imagine
that the Justice Department won't fight to eliminate this exception before
the rule becomes final," said former prosecutor David Laufman, now a
defense attorney in Washington. Copyright © 2008 The
Associated Press. External link: http://ap.google.com/article/ALeqM5ieXNQKlfOClbz6jEKYziPZBJ-fVgD8VHGI3G2 |