April 2009

 

A Watch Dog for your Dollars

 

Dear Friends,

Anytime the government spends a lot of money in a short period of time, there are always a few unscrupulous operators willing to commit fraud or outright theft. That is why President Obama has created a special Inspector General to root out fraud and abuse of the Stimulus funding and why I have reintroduced, the War Profiteering Prevention Act.

Wars have always been a profitable business, and never more so than in Iraq and Afghanistan. The U.S. has already spent more than $50 billion to hire U.S. businesses in Iraq to deliver food, water, gasoline and other supplies, build and guard bases, drive trucks and many other activities in support of our troops and the reconstruction effort. In Afghanistan, billions of dollars have also been appropriated for these purposes.

So far, ten private contractors in Iraq have paid more than $300 million in penalties for bid rigging, fraud, gross overcharging, delivery of faulty military parts and environmental damage. More cases have been audited and investigated, but prosecution is complicated because anti-fraud laws to protect against the waste or theft of tax dollars in the United States are not as clearly applicable overseas. American companies have been exempt from Iraq law, but weren’t subject to U.S. law either because they were operating overseas.

This large number of well-documented cases of contract fraud and abuse led me to introduce the War Profiteering Prevention Act in 2007, which was approved by a vote of 375-3. However, the Bush Administration opposed it and, as a result, it was blocked in the Senate.

With the new focus on transparency in the Obama Administration, the War Profiteering Prevention Act has the momentum to be signed into law. The bill simply defines contract fraud, specifies who’s covered by the law and where, establishes jurisdiction for the enforcement and prosecution, and specifies fines and possible imprisonment for violation. It’s already had a hearing before the House Judiciary Committee and may be scheduled for a House vote before the end of the April.

President Obama and Congress are working together to crack down on contract fraud and corporate greed. We think companies that receive public funds ought to be accountable to the public.

Aloha,

Neil Abercrombie

Member of Congress