Democrats increase pressure on overseas contract fraud

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."