GovernmentExecutive.com

Legislation to close a loophole that exempts overseas contracts from federal oversight was introduced Monday by Democrats on the House Oversight and Government Reform Committee, which announced an April 15 hearing on the issue.

"No contractor should be given a free pass to defraud taxpayers, at home or abroad," said Rep. Peter Welch, D-Vt., co-sponsor of the bill along with Oversight and Government Reform Chairman Henry Waxman, D-Calif., and Rep. Edolphus Towns, D-N.Y., who chairs the panel's Government Management Subcommittee.

The bill would require all contractors to report fraud and over-billing to inspectors general and contracting officers.

Waxman's committee is investigating how the loophole exempting overseas projects from oversight was slipped into plans to crack down on fraud by government contractors. More than $100 billion has been spent to help rebuild Iraq and Afghanistan over the last five years, but in that time, the Justice Department has uncovered at least $14 million in contract bribes in those two nations.

Welch also said Monday that the Bush administration has delayed providing documents explaining the origins of the loophole. Documents from the OMB, the departments of Justice and Defense, the General Services Administration and NASA were due Friday.

"If this loophole was a bureaucratic mistake as some in the administration have claimed, then our requests should be easy to meet," Welch said. "This should be simple. Someone in the administration made this change and it should be easy to explain why. A delay only raises more questions."

COMMENTS

• Credentialing suppliers/licensors such as Lockheed Martin, Saflink, HID, Gemplus, Digimarc, etc.--biometric smart card suppliers all committed fraud in Russia. After securing US contracts every single one of these companies within a year and sometimes as soon as 2 weeks was paid by the Putin-run Kremlin for a phony contract. The contracts were phony because none of our credentialing suppliers supplied Russia with their products, yet, they were paid! This made the payments payoffs for instead providing source code that allows Russia to move spies, contraband, etc. through our land, sea and air borders (CBP/WHTI/ICE initiatives), throughout the U.S. (TWIC--transportation worker ID, Registered Traveler, Maritime ID, RR ID, etc.) and right into the Pentagon (military ID). This has happened across the board in other industries, too. By removing the provision that permits contractors engaging in fraud overseas to benefit in the U.S., every company with business in Russia will become disqualified to do business with Uncle Sam. This is the lion's share of our Goliath defense contractors! Good riddance! It's time for the goliaths w/rudimentary ideas that bribe their way to US contracts while companies with good ideas go out of business, to pay the piper for being Russian spies! Dawn Posted April 18, 2008 10:36 AM
• Democrats beat Republicans with the highest amount of personal investment in the contractors presently working in Iraq. Democrats have the most money to lose from contractor fraud. I do not mind them making money on this necessary war, a war that they supposedly do not support? But they need to stop under-funding the VA, the fiscal year 2009 begins this Oct 1st 2008, and once again the VA is grossly under-funded. Our troops must know now that when this mission is accomplished, as our new generation of Veterans, their GI Bill will be no less than that of WWII. Pat Smith Posted April 9, 2008 7:55 AM
• Maybe I am cynical but when you are dealing with $100 billion dollars, I think it is safe to assume that some fraud is going to exist. I am not sure that $14 million in fraud has been detected is a newsworthy event. Discovering 0.014% of fraud is ridiculous. I am sure the inspectors travel and salaries was in excess of $14 million to detect this fraud. Here is an idea, force contractors to pay US taxes if fraud is discovered overseas on the amount of the contract and don’t make the fine a deduction. Fraud is also all of the us companies that owe the government money and taxes that don’t currently pay them anyway. TruthFighter Posted April 8, 2008 4:37 PM