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Fraud Crackdown Comes With a Loophole
Key Excerpts from Article on Website of ABC News/Associated Press
Posted: February 25th, 2008
http://abcnews.go.com/Politics/wireStory?id=4279612
A Bush administration plan to crack down on contract fraud has a multibillion-dollar loophole: The proposal to force companies to report abuse of taxpayer money will not apply to work overseas, including projects to secure and rebuild Iraq and Afghanistan. For decades, contractors have been asked to report internal fraud or overpayment on government-funded projects. Compliance has been voluntary, and over the past 15 years the number of company-reported fraud cases has declined steadily. Now, the Justice Department wants to force companies to notify the government if they find evidence of contract abuse of more than $5 million. Failure to comply could make a company ineligible for future government work. The proposal, now in the final approval stages, specifically exempts "contracts to be performed outside the United States," according to a notice published last month in the Federal Register. Critics including the watchdog group Taxpayers Against Fraud said the overseas exemption raises suspicions. "I hate to sound cynical, but what lobbyist working for a contractor in Iraq wanted this get-out-of-jail card?" asked Patrick Burns, spokesman for the government watchdog group. "I'm not saying that's the way it went - I'm just suggesting that's the most logical line to draw. I think somebody's got some explaining to do." After the invasions of Afghanistan and Iraq, the U.S. poured billions of dollars into projects [in] those nations. With the money came the fraud. At least $14 million has been lost in bribes alone over the past five years in Iraq and Afghanistan. An estimated $350 billion is spent on government contracts annually, according to the White House Office of Federal Procurement Policy.
Note: For many additional reports from reliable sources on war profiteering, click here.
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