Bill would target wartime contracting fraud

Current law makes it hard to build criminal cases against firms abusing taxpayers’ money on projects in Iraq, measure’s sponsor says.

Dusting off a page from President Truman's playbook, Senate Democrats unveiled legislation Thursday that would create criminal penalties for profiteering in Iraq and other battlefields.

Senate Judiciary Chairman Patrick Leahy, D-Vt., said his bill would help safeguard against abuse, noting that the special inspector general for Iraq reconstruction has found that millions of dollars have been lost or diverted from the war. At least 10 companies have paid more than $300 million in fines to settle allegations of bid-rigging, fraud, delivery of faulty military parts and environmental damage, he noted.

"There is growing evidence of widespread contractor fraud in Iraq, yet prosecuting criminal cases against these war profiteers is difficult under current law. We must crack down on this rampant fraud and abuse that squanders American taxpayers' dollars and jeopardizes the safety of our troops abroad," Leahy said in a statement.

Leahy's measure follows the path set by Truman, who as a Missouri senator gained prominence chairing a special committee that investigated waste and fraud by World War II contractors, a role that helped lead to his selection as vice president by President Roosevelt.

The bill is similar to a 2003 measure that Leahy sponsored, which was passed by the Senate as part of an appropriations bill, but later stripped by GOP leaders at the behest of the White House.

The legislation would criminalize war profiteering, which would be defined "as materially overvaluing any good or service with the specific intent to excessively profit from the war and relief or reconstruction activities." Those convicted could face up to 20 years in prison and be fined up to $1 million or twice the amount of any illegal profits.

The measure would contain penalties for making a false statement in any matter involving a contract to provide services or goods in connection with a war, military action or reconstruction activities. It also would create extraterritorial jurisdiction for offenses committed in foreign countries.

Together with Sen. Mark Pryor, D-Ark., Leahy sponsored another measure to help federal investigators prosecute public corruption cases. The measure would extend the statute of limitations for the most serious public offenses, such as bribery and extortion, from five years to eight years. It also would allow federal prosecutors to request authority for wiretaps in bribery cases involving state and local officials and officials of groups that receive federal funds.

"If we are serious about addressing the egregious misconduct that we have recently witnessed, Congress must enact meaningful legislation to give investigators and prosecutors the resources they need to enforce our public corruption laws," Leahy said.