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The Senate Judiciary Committee on Thursday voted to exact million dollar fines and stiff prison sentences on anyone found guilty of garnering excessive profits from war, relief efforts or reconstruction operations.

The committee swiftly approved the bill (S. 119) on a voice vote without amendment making war profiteering a crime. The bill moves to the Senate for consideration.

Under the bill, anyone who schemes to defraud the United States or "materially overvalues" any goods or services to gain excess profits could be sent to prison for up to 20 years, and be subject to fines of $1 million or twice the gross profits gained through the profiteering scheme.

The bill also makes illegal attempts to conceal profiteering schemes or false statements made to authorities regarding profiteering. Penalties include up to 10 years in prison and fines.

When introducing the bill, Leahy said that instead of seeing results from private contractors charged with security, distribution of goods, and providing food and shelter for troops, penalties were being levied for fraud and abuse. Leahy pointed to at least 10 companies that have paid more than $300 million in penalties since 2000 to resolve allegations of wrongdoing including rigging bids and delivery of faulty military parts.

"Last year, the Special Inspector General for Iraq Reconstruction found that millions of U.S. taxpayer funds appropriated for Iraq reconstruction have been lost and diverted. Yet we continue to send more taxpayer funds to Iraq, without accountability," Leahy said.

Ongoing investigations have yielded criminal and civil penalties against companies and individuals found to have engaged in improper business practices, according to Barry Sabin, deputy assistant attorney general in Justice Department's general criminal division during a committee hearing on profiteering last month.

"Department of Justice attorneys in the Commercial Litigation Branch of the Civil Division enforce the False Claims Act, other federal statutes, and common law remedies to address all types of procurement fraud, including overcharging, defective pricing, quality deficiencies and product substitution, and bribery and corruption statutes. These actions often result in the recovery of significant funds," Sabin said. Still he said, investigations that involve procurement are tough.

"Procurement fraud cases, especially those involving the wars in Iraq and Afghanistan, are usually very complex and resource intensive. The cases often involve extraterritorial conduct as well as domestic conduct, requiring coordination between appropriate law enforcement agencies," Sabin said.

COMMENTS

• And people expect the DOJ US Attorneys to not abuse their powers and prosecute the right people??? GovExec.com reader Posted April 17, 2007 1:12 PM
• Taxpayer, It isn't necessarily incompetence in the acquisition corps so much as the acquisition corps has been stripped to the bone of personnel. With the government's desire to outsource everything, there are fewer and fewer of us to provide needed oversight. And, when you have the government itself (Bush and Congress) failing to provide oversight in Iraq, its hard to get lower levels of government to take it seriously when they do have the staff to do it with. GovExec.com reader Posted April 17, 2007 1:02 AM
• Part of the problem is unethical contractors. However, most of the problem is incompetent DoD personnel and military people that just don't care or know what is expected. All the DoD had to do was enforce the existing acquisition rules and procedures to reduce the siz of the problem. Nop one is being held accountable for the mess so why would they correct it? Imcompetent managers in DoD do this and many other things and never are held accountable. What about all the military leader that cannot win a war - they all blame the political process but they have control on the front lines. What about the contracting personnel that allow money to be obligated without following the proper acquisition rules in the process? What about Congress that keeps authorizing DoD to obligate the government when they have continually failed to follow existing rules and procedures that have wasted great amounts of money? There is nothing anywhere in the system to stop this waste and abuse and many factors that foster the waste and abuse. It ani't going to change, it only goes into hidding for a short time and then resurfaces. taxpayer Posted April 16, 2007 7:12 AM