By LOLITA C. BALDOR, Associated Press Writer
March 20, 2007
WASHINGTON - Defense Department investigators said Tuesday
they are going to be more aggressive suspending or barring
companies from doing U.S. contract work in Iraq if they are
involved in war profiteering there.
Stuart Bowen, special inspector general for Iraq reconstruction,
said taking such action is an effective tool, particularly
when auditors are struggling to come up with enough detailed
evidence for criminal prosecutions.
Bowen's comments came in testimony before the Senate Judiciary
Committee, as lawmakers complained that assessing fines is
not enough to stop the billions of dollars in waste, fraud
and abuse plaguing Iraq reconstruction projects. Auditors last
month told Congress that about $10 billion has been squandered
by the U.S. government on Iraq reconstruction aid because of
contractor overcharges and unsupported expenses.
The U.S. has appropriated more than $38 billion for Iraq relief
and reconstruction, including some money for security forces
and economic programs, according to the latest quarterly report
from the special inspector general, released in January.
Fining companies a million dollars, said Sen. Arlen Specter
(news, bio, voting record), R-Pa., can simply amount to "an
inexpensive license to cheat the taxpayers."
"This really is the cost of doing business," said
Specter, noting that the fraud can often be in the hundreds
of millions of dollars.
According to Army spokesman Dave Foster, eight individuals
or companies have been barred from doing business with the
Army, and another eight have been proposed for debarment. Foster
also said that as of Jan. 30, 16 companies or individuals have
been suspended from doing business, based on allegations of
fraud and misconduct connected to Iraq reconstruction contracts.
Bowen said that such administrative action against those who
commit misconduct can strip them of security clearances.
Iraqi officials are also investigating as many as 2,000 cases
of fraud, amounting to about $8 billion in unaccounted for
Iraqi construction funds, he said.
Committee Chairman Patrick Leahy (news, bio, voting record),
D-Vt., said more controls are needed over how billions of dollars
for Iraq reconstruction is spent and that the Justice Department
needs to move more aggressively in prosecuting fraud in Iraq.
Deputy Assistant Attorney General Barry Sabin said his agency
is devoting significant resources to the effort, but he would
not say how many investigators are working full time on the
Iraq fraud cases. He said the prosecutions are complicated,
and he would not say how many more people will be charged this
year.
So far, he said, 16 people have been convicted in connection
with fraud, kickbacks or other contracting violations.
Leahy is pushing legislation that would make war profiteering
a specific crime and would apply to all contract fraud, whether
it occurs in the United States or overseas.
___
On the Net:
Special Inspector General for Iraq Reconstruction: http://www.sigir.mil/
Defense Department Inspector General: http://www.dodig.osd.mil/Audit/reports/index.html
Justice Department Inspector General: http://www.usdoj.gov/oig/index.html
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