Tuesday, January 09, 2007

Leahy Details War-Profiteer Fraud and Abuse

In announcing his legislation to combat the war profiteering that's gone unchecked by Congressional Republicans -- I would argue it's been outright encouraged with practices like no-bid contracting -- Senator Patrick Leahy (D-VT) has given some good examples of the kinds of fraud and abuse his legislation is designed to end.

Custer Battles is accused of bilking the government out of $50 million:
  • Custer Battles billed the government nearly $10 million when its actual costs were less than $4 million, according to a government investigation.
  • Custer Battles over-billed electricity costs by $326,000 - Actual electricity charges of $74,000 were billed at $400,000.
  • Custer Battles over-billed for trucks that did not run by $572,000 – Actual purchase price of $228,000 for faulty trucks were billed to government for $800,000.
The two largest government contractors in Iraq -- Bechtel Corp. and Halliburton Co. -- have been fined several times in the past four years.
  • In December 2004, a Pentagon investigation found evidence that Halliburton's Kellogg, Brown & Root (KBR) had overcharged the U.S. government some $61 million for fuel deliveries from Kuwait to Iraq.
  • In January, 2004 Halliburton admitted to the Pentagon that two of its employees took up to $6 million in kickbacks for awarding a Kuwaiti-based company with work in Iraq.
  • In early February, 2004 it was reported that the company had agreed to repay the U.S. government some $27 million for meals that were never served to American troops.
  • In May 2006, the Coalition Provisional Authority's inspector general started raising questions about the bills that Halliburton had racked up at a five-star beachfront hotel near Kuwait City. And 12 Halliburton truck drivers claimed they risked their lives driving empty trucks in Iraq while their employer billed the government for hauling absolutely nothing.
  • Bechtel hired three subcontractors in Iraq that have been fined more than $86 million in the past four years, though none had been banned from getting new contracts.
And more from other contractors:
  • American International Contractors Inc., paid $4.7 million in fines in 2000 after pleading guilty to bid rigging on a U.S.-funded water project in Egypt, according to published reports. AICI has part of a $325 million contract to rebuild Iraq's transportation systems, has a share of a $500 million contract for emergency construction needs in the Pentagon's Central Command region, which includes Iraq and Afghanistan, and is in a partnership that has a $70 million construction contract at Al-Udeid air base in Qatar, used to support troops in Iraq.
  • Fluor Corp., paid $8.5 million to the Defense Department in 2001 to settle charges it improperly billed the government for work benefiting its commercial clients, according to published reports. Fluor and AMEC created a joint venture that has $1.7 billion in contracts to rebuild Iraq's electricity, water, sewer and trash removal infrastructure.
  • Great Lakes Dredge & Dock Co., paid a $969,000 fine in 2002 for environmental damage in the Florida Keys National Marine Sanctuary, according to published reports. Bechtel awarded the company a subcontract to clear the Iraqi port of Umm Qasr.
  • Northrop Grumman Corp., whose Vinnell Corp. subsidiary was awarded a $48 million contract to train the new Iraqi Army last year, according to published reports. Northrop Grumman has been penalized $191.7 million in the past four years, including $750,000 paid to the Pentagon in 2000 in a case involving allegations of providing faulty replacement parts for the JSTARS airborne surveillance system.
Leahy's office points out that, since 2000, "10 companies with billions of dollars in U.S. contracts for Iraq reconstruction have paid more than $300 million in penalties to resolve allegations of bid rigging, fraud, delivery of faulty military parts and environmental damage in connection with other projects."

Yet, amazingly, the do-nothing Republican Congress that was just given the boot by American voters in November never really thought there was anything worth investigating in any of this. Indeed, companies already fined for fraud against the U.S. government were then given additional deals by the Bush administration.

If you would like another excellent view of just how far the war profiteering in Iraq has gone, please check out Robert Greenwald's outstanding documentary, Iraq For Sale.