The Leahy/Daschle amendment to the fiscal 2005 defense authorization bill would have created new penalties -- including up to 20 years in jail -- for government contractors convicted of inflating the cost of goods or services. It was defeated 52-46.
Senate Majority Leader Bill Frist, R-Tenn., later filed a motion to invoke cloture on the defense authorization bill, setting a deadline of 1 p.m. Thursday for any further amendments to be filed. The cloture vote could be held as early as Friday.
Daschle and Leahy introduced the war-profiteering amendment in response to growing accusations by Defense Department whistleblowers and House and Senate Democrats that Halliburton, Vice President Dick Cheney's former company, has overcharged the government for a host of services provided to the military in Iraq and Afghanistan.
A clearly uncomfortable Armed Services Committee Chairman John Warner, R-Va., rallied Republicans against the amendment, warning the provisions were simply too vague to be placed into federal law.
Democrats appear to have renewed their interest in controversies around Halliburton's activities in Iraq and Afghanistan in the last several weeks. Sen. Frank Lautenberg, D-N.J., and Rep. Henry Waxman, D-Calif., have led the growing chorus of Democratic voices in Congress seeking investigations into whether Cheney played a role in granting a $2.5 billion contract to Halliburton, as well as into the accusations that the company bilked the government out of millions of dollars in their contracts.
Sen. Zell Miller, D-Ga., was the sole Democrat to vote with Republicans. Sens. Lincoln Chafee, R-R.I., and Olympia Snowe, R-Maine, reluctantly voted against the amendment after being lobbied by GOP colleagues on the Senate floor.
Although presidential hopeful Sen. John Kerry of Massachusetts was making a rare appearance in the Capitol during the vote, he did not vote on the amendment, saying he "had some meetings."