By Kenneth J. Theisen (February 14, 2002)
The Bush regime intends to stop waste of taxpayer’s money in contract fraud cases by forcing companies that do business with the federal government to notify the feds if they discover evidence of contract abuse of more than $5 million. If a company does not do so, it could become ineligible for future government work. But apparently some of the Bush regime’s big donors got wind of this new law and got the regime to exempt them from the new law. The law will not apply to contract work done overseas, including projects in Iraq and Afghanistan.
The proposed rules published in the Federal Register in January by the
Department of Justice (DOJ), specifically exempt “contracts to be
performed outside the United States.” Dick Cheney’s former business
associates must have breathed a sigh of relief when they read that.
But since the media is now reporting on the giant loophole, the DOJ is
calling the exemption a “mistake.” Given the billions of dollars of
overseas government contract fraud this is certainly an understatement.
DOJ has charged 44 people with bribery, conspiracy, money laundering,
and other contract fraud crimes related to the wars in Iraq and
Afghanistan alone. And those charged are just the tip of the iceberg.
The Office of the Special Inspector General for Iraq Reconstruction,
(the Bush regime tried to eliminate this Inspector General last year)
currently has 52 investigations opened. It is investigating bribes,
false billing, contract fraud, kickbacks, and out-and-out theft. The
Pentagon is active too, with the Army Criminal Investigation Command
currently conducting 90 criminal investigations related to possible
contract fraud in Iraq, Afghanistan, and Kuwait.
According to the Associated Press, the White House Office of Management
and Budget, which oversees federal procurement policy, refused to
explain the proposed exemption. OMB spokesperson Jane Lee stated, “This
is a proposed rule. We are currently reviewing the public comments that
were submitted.”
Current law relies on companies that commit fraud to voluntarily report
that fraud to the government. As you can probably imagine such a
voluntary program is a vast success. In 2002, despite the fact that
hundreds of billions of dollars are paid out to private companies by
the federal government each year, there were only 8 cases of fraud
voluntarily reported. In 2007 only 3 cases of contractor fraud were
reported to DOJ voluntarily. I guess this proves that most of these
companies are completely honest. Of course when it comes to regulating
private companies the Bush regime is always in favor of voluntary
compliance whether it is to deal with environmental damage,
occupational hazards, etc. Apparently until the mistake was discovered
recently it had hoped that companies would voluntarily report fraud in
their overseas contracts with the Bush regime too.
In addition to the “mistake” of not applying the law overseas, I wonder
why the limit of reporting fraud is $5 million. Is that the threshold
before we should care about how much taxpayer money is wasted? Is it
okay to steal $4,999,999?