Bush administration pays lip service to cracking down on fraud.

Every now and then the Bush Administration tries to pretend that it actually gives a shit about the common taxpayer and goes through the motions of doing something to clean up the government corruption which it is largely responsible for in the first place. We have just such a situation with the recent announcement that the Justice Department is going to crack down on contract fraud:

For decades, contractors have been asked to report internal fraud or overpayment on government-funded projects. Compliance has been voluntary, and over the past 15 years the number of company-reported fraud cases has declined steadily.

Imagine that. Make reporting of fraud a voluntary thing and suddenly fraud is very hard to find. The idea that our government thought they could get companies to report fraud out of the goodness of their hearts is laughable to begin with, but they’re going to fix that problem!

Now, the Justice Department wants to force companies to notify the government if they find evidence of contract abuse of more than $5 million. Failure to comply could make a company ineligible for future government work.

OK, that’s a start. Though I’d think that fraud of any scale should be reported. Why the arbitrary $5 million minimum? I can only guess that it has something to do with anything less than that costing more to prosecute than what they’d gain from doing so. Still $4.9 million is a tidy sum to be able to get away with.

There’s a problem with this new-found enthusiasm for cleaning up corruption, though. A loop-hole if you will:

The proposed rules, which are in the final approval stages, specifically exempt “contracts to be performed outside the United States,” according to a notice published last month in the Federal Register.

What the fuck?! The no-bid contracts awarded to various companies, most notably Halliburton, in Iraq and Afghanistan are rife with some of the worst cases of fraud and over-payments to be found and the Justice Department says they don’t count? How the hell does that make any damned sense at all?

For its part the Justice Department is saying that loophole is a “mistake” that it’ll fix real soon now. Really. They promise.

The Justice Department, which pushed for the self-reporting requirement, called the overseas exemption a mistake that should be fixed before the plan becomes final.

“We do not agree with also excluding contracts performed entirely outside the United States,” Assistant Attorney General Alice Fisher wrote Jan. 14 in a letter otherwise supporting the new rules.

“These types of contracts, which in many cases support our efforts to fight the global war on terror, need greater contractor vigilance because they are performed overseas where U.S. government resources and remedies are more limited,” Fisher wrote.

A spokeswoman for the White House Office of Management and Budget, which oversees federal procurement policy, declined to answer questions about the planned exemption of overseas contractors from the beefed-up requirements for reporting fraud.

“This is a proposed rule,” OMB spokeswoman Jane Lee said. “We are currently reviewing the public comments that were submitted.”

Here’s a public comment for you: No fucking way in hell does that loophole stay in.

The article goes on to point out some of the more notorious cases of fraud that have come to light providing ample reason for the change from a voluntary reporting system to a mandatory one.

3 thoughts on “Bush administration pays lip service to cracking down on fraud.

  1. Just wondering: was that loophole for foreign contracts thought up by a Republican?  Inquiring minds want to know.

  2. The problem with auditing and compliance is that they’re not normally actual military people. In fact, the military guys usually suck at contracts in a big way. They’re not supposed to be expert at contracting, so they make mistakes (sometimes big fat, kick you out of the military and into prison mistakes) even in the best of circumstances.

    Normally the people who are doing the buying are civil servants and the soldiers (and program managers) hate to run through the proper compliance and auditing hoops in the best of circumstances. They’re the reason there’s always a certain amount of procedural overhead in costs and time with military contracting, except when a person with enough authority has the bad judgment to toss the rules in pursuit of expediency and ease. This is what you get.

    The contractors have a bit of a reason to be pissed. They’re really not at fault here. The blame is on giving people spending authority that they shouldn’t have. There are already plenty of rules on compliance and auditing, despite what it implies in the article, if the people with the spending warrants knew enough to require them. It’s already expensive to do business with the government in terms of handing over reams and reams of paperwork, and this just sounds like the government gearing up to fire their own understaffed external contracting civil servants to afford more bullets.

  3. Did anybody else notice how a story of cleaning up came out in the last year of Bush… hmmmm… Yes I realize this isn’t a case of cleanup, but it’s a story of an attempt nonetheless.

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