The Follow the Money Project is investigating where the money appropriated for the Iraq and
Afghanistan wars is going -- especially money that should be going to the Troops.
Besides posting new developments in oversight and our investigative releases, check out our
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What's New
Bauman & Rasor Testify to the Senate
Dina Rasor and Robert Bauman of the Follow the Money Project and co-authors of
Betraying Our Troops: The Destructive Results of Privatizing War testified to the joint Subcommittees on Federal
Financial Management, Government Information, Federal Services, and International Security and the Oversight of Government
Management, the Federal Workforce, and the District of Columbia on Thursday, January 24. The hearing was titled “Management
and Oversight of Contingency Contracting in Hostile Zones.
Bauman and Rasor appeared on a panel that includes a representative
from the GAO and the Special Inspector General for Iraq Reconstruction. Perry Jefferies, a soldier that is profiled in Bauman
and Rasor's book, also testified. The hearing can be viewed at http://hsgac.senate.gov/index.cfm?Fuseaction=Hearings.Detail&HearingID=519.
Also, see Dina Rasor interviewed on ABC News online with John Cochran titled "Contractors Gone Wild." Click below
to view.
LOGCAP Oversight Team issues Stunning After-Action Report
A startling example of dysfunctional and ineffective oversight was revealed at the Senate Subcommitte hearing
on "Management and Oversight of Contingency Contracting in Hostile Zones" Thursday, January 24, 2008. A 2005 LOGCAP
Support Unit Team Detachment after-action report, written by team members who were on duty in Iraq between June 2004 and June
2005, was submitted to their chain of command that documented a lack of support and such issues as LOGCAP Program Managers
"leading the charge" for KBR and supporting their "boondoggles."
There was no doubt that LOGCAP program officials were upset with the report and its unknown if it was eventually
edited and trashed so that it would never see the light of day. Click on the After-Action Report at the left side
of this site to read the full report.
Check out our blog to see what is new in oversight of the money for our soldiers.
Saturday, April 5, 2008
Contractor Self Arrest: How realistic is this?
Apparently, politicians and the media have been almost hysterical over the fact that a contractor self-reporting provision was exempted for DOD contractors operating overseas. I agree that such a provision, like any contract provision affecting
government contractors, should be applied across the board. That said, please politicians and media, get a grip. The real
problem, even if the provision were eventually applied to contractors overseas, is the self-reporting process itself. It does
not, and never has, worked as advertised. Originally instituted as strictly a voluntary process in the 1980s, it is now federally
mandated. As a former DOD investigator who worked on "voluntary disclosure" cases in the 1980s and early 1990s, I can attest
to my statement from personal experience. How does it work you ask? A major DOD contractor with a $1 billion contract gets
wind of an impending federal investigation of fraud and decides to head it off by self-reporting the problem. The contractor
CEO rushes, like a speeding bullet, to the nearest DOD confessional to report its sins. Once in the DOD sin bin, the CEO confesses
its sins against the government to the Father DOD official that it took $1,000 from the DOD feed trough. The official tells
the CEO that, yes, his company has sinned, but blesses the contractor, tells the CEO the company is forgiven, and awards the
contractor another $1 billion contract with the provision the $1,000 is verified. But not to worry the official says. The
verification process will only be limited to the $1,000. The CEO then gives the official its $1,000 in pennies and the official
gets a gold star from his (or her) superiors.
Am I exaggerating? Not really. The whole notion of DOD contractor self policing and disclosure is absurd at best. Although
some small and medium size contractors have legitimately disclosed fraud, waste, and abuse under the program, it is my experience
that most large contractors would not risk such disclosures unless forced to as a damage control move to head off a full scale
federal investigation. These are the contractors that have the most to lose in terms of cost impact that could result in large
recoveries on the part of the DOD. The self-reporting process is a useful mechanism for major contractors to limit their liability
by settling with the government for pennies on the dollar.
Once a contractor self-reports fraud, waste, or abuse on a DOD contract, the investigation, or "verification," as it was
called when I was a DOD investigator, was more of a rubber stamping process than an actual investigation with the effort limited
in scope to what was reported. Systemic problems are never looked at. Contractor executives were immune from liability under
this process, but individual lower level employees were not, often resulting in some poor employee being canned as a sacrifice.
Despite its intended purpose, the self-reporting process, in practice, has been a tool easily manipulated by savvy contractors
to thwart large scale fraud and limit potential recoveries by DOD. Thus, a call by Congress for hearings on the problem of
the missing provision for contractors operating overseas is somewhat missing the mark. Hearings would be better served on
exploring how the self-reporting process actually works.
Comments are encouraged. Contact us at admin@followthemoneyproject.org
Troops! We need to hear from you about what you saw in Iraq or Afghanistan on supplies and
equipment. We also want to hear from contractor employees who have returned and troubled by what they saw in Iraq or Afghanstan.
We will keep all letters confidential. Email us at admin@followthemoneyproject.org .
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