Florida Congressional Candidate Fights Contractor Fraud

by D. Cupples |  Hiring private contractors to provide recurring government services makes no sense to us fiscal conservatives who grasp basic math. Contractors tend to cost more than government employees, if only because profits add to the costs.  Adding waste, fraud and abuse to the mix only further drives up taxpayers' costs. Making matters worse, Bush Administration officials have fertilized the ground for fraud by cutting government staff that oversees and holds contractors accountable.

Especially since the Iraq war, many contractors have provided shoddy service while gorging on us taxpayers like tics on a dog.

Blackwater, for example, had less than $1 million in government contracts in 2000.  After CEO Erik Prince gave heavy campaign donations, Blackwater ended up getting about $1 billion in federal contracts -- roughly 10% (or $100 million) was profit. 

We taxpayers funded Blackwater's phenomenal growth spurt and got questionable service in return.  Blackwater is came under investigation after its contractors allegedly smuggled arms, stole an Iraqi military plane, and shot Iraqi civilians). 

Blackwater is not the only questionable defense contractor. (Examples are here).  Former Halliburton subsidiary KBR received billions in federal contracts since we invaded Iraq.  According to a legal complaint, KBR also systematically overcharged us taxpayers (Vanity Fair.)

Defense contractors aren't the only ones.  Hospitals, labs, insurance companies, drug companies, and even doctors have found creative ways to gorge on us taxpayers. (Examples are here.)

In September, we learned from attorney Alan Grayson that the Justice Department diligently handled some types of cases while delaying cases against Iraq war contractors -- cases that would cause bad press for President Bush. (C-SPAN video above)

Contractor fraud is one of the roots of our nation's political corruption. When corporate players "invest" in politicians, they usually do it  to get favorable legislation or money. How does the federal government give money to corporate players?  Tax breaks, subsidies, or government contracts.

With accountability at an all-time low, government contracts have become opportunites for contractors to take more than their legitimate share by committing fraud.

I'm writing about this, because yesterday I learned that Alan Grayson (from the video), a man who battles contractor fraud, is running for Congress in Florida (District 8).  That alone would make me vote for him if I lived in his district. 

It gets better: Grayson is challenging incumbent Ric Keller -- a man I watched trample on accountability during a House Judiciary Committee hearing about Justice Department politicization. 

Keller knee-jerk defended our broken Justice Department and seemed averse to any investigations of it.  At one point, former Republican Attorney General Richard Thornborough said that political agendas might have played a part in Justice Department prosecutions under former AG Alberto Gonzales.

Keller's response: "Your testimony to be blunt is the most pathetic example of hearsay and innuendo. It is totally ridiculous." (CNN)  How could Keller know it was "ridiculous" before the investigation was complete?

Given how many parts of our federal government are in disrepair, we taxpayers are not well served by congressmen who don't diligently perform their constitutional duty of executive oversight.

Perhaps the good people of Central Florida will do the entire nation a favor by booting Keller out and electing Grayson in 2008.  The Wall Street Journal and Vanity Fair have details about Grayson and his "one-man war" against contractor fraud.

Related BN-Politics Posts:

* Contractor Fraud: Driving up Healthcare Costs

* Govt. Contractors: Driving up War's Costs?

* Whatever happened to the 190,000 Missing Weapons?

* $1 Billion (More) in Military Hardware Missing in Iraq

* "Billions over Baghdad": Poor Accounting Enabled Waste & Fraud

* Blackwater Took Iraqi Airplanes, CEO Misled Congress?

* DoD Rewarding Bad Contractor Performance?

* Taxpayers Losing Money to Engorged Contractors

* Justice Dept. Official Turned Blind Eye to Contractor Fraud?

* Inspector General Blocked Investigations re: Waste and Fraud?

* Embassy in Iraq: Waste, Bad Planning & Contractor Fraud?

* Oversight Hearing: Rice Evasive, Republicans Don't Want Probe

* Private Insurers Milking Medicare

* Drug Companies Scammed Taxpayers & Cancer Patients

* FEMA and Katrina: Incompetence or Corruption?

* Privatizing Defense Dept.'s Pathology Services: Will it Cost More?

* White House Whines About Congressional Oversight

Comments

[PharmaFraud]

When Congress passed the 1986 amendments to the FCA, they intended that U.S. citizens would act in an oversight capacity to ensure the DOJ does not ignore fraud, waste, and abuse. It's become painfully clear that the current administration has effectively castrated the ability of taxpayers to demand integrity and sound business practices from companies that rely on taxpayer dollars for the bulk of their revenues.

In it's report to Congress regarding the 1986 amendments to the FCA, the Senate Judiciary Committee expressly stated that "Congress did not intend the seal provisions in the FCA to function as a tool permitting the government to unreasonably delay qui tam suits brought by private citizens." In addition, the committe said that "good cause" would not be established merely upon a showing that the Government was overburdened and had not had a chance to address the complaint.

The Senate Report further explained that, the qui tam plaintiff was to act "as a check that the government does not neglect evidence, cause undue delay, or drop the false claims case without legitimate reason."

[Rick Monahan]

I had to laugh when I read your opening sentence about hiring contractors to provide recurring services "makes no sense to us fiscal conservatives who grap basic math." Are you actually serious? The only reason government contractors exist is to provide recurring services to the government, for as anyone with any knowledge of government service, contractors are MUCH, MUCH cheaper than direct government/military labor. It's why every army post outsources it's fuel, dining halls, etc.

While you may have basic math skills, you might want to refresh your basic economic skills. The entire reason for government contracting is that it is less money to the government...hence the term "free market." While multi-millionaire quacks like Grayson would have you believe profit is evil, the concept of profit leads to competition which actually brings the price down considerably. I would encourage you to do a study on the cost of security contractors in Iraq versus the cost of an American infantryman...it is considerably cheaper to employ the contractor than to maintain the Infantryman in his unit. This does not even touch on the point that who should be getting killed delivering needless supplies...a contractor who knows the risks and is getting paid for them, or a 20-yr old mail clerk who signed up for the college money and has been trained to sort mail, not defeat hi-tech IEDs.

Your point on corruption is well-taken...but is it really there, or is it something that people like Grayson are using to get elected. The non-partisan Inspector General for Iraq Reconstruction has said, after 4 years of audits, that the fraud in Iraq is only "tens of millions", and not the "hundreds of millions" that people like Grayson would have you believe.

I encourage you to do some research and get your facts straight, not be a political voice for a hack like Grayson who has no chance of getting elected. The guy only raised $10k to the $700k he contributed to his own campaign...less then 20 people gave him money!

[D. Cupples]

Hi Rick,

Privatization supporters CLAIM that contractors are cheaper, but many studies and court cases show otherwise. Contractor profits, alone, are an additional cost on top of what the taxpayers would pay (non-profit) government employees.

That and cost-plus contracts (common for the DoD -- e.g., KBR's recent contracts) actually create a FINANCIAL INCENTIVE for contractors to inflate costs, because the Govt. pays them their reported costs PLUS a percentage on top of that.

I've been blogging only 6 months, but I've researched contractor fraud for more than 5 years (Florida and federal).

For a few examples, check out our "Government Contractors & Waste" section (right sidebar under "topics").

Also, you can do a search on GAO's website. That site has contractor studies going back to the 90s (maybe even the '80s).

[Damozel]

Yes, I think anyone who looks into the facts will conclude that the notion that using private contractors---who are in it to make a profit---saves money is a joke. A bad one.