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article imageReport: Pentagon pays billions to fraudulent defense contractors

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By Lynn Herrmann     Feb 4, 2011 in Politics
Washington - A new report shows the US military paid out $285 billion in taxpayer dollars between '07 and '09 to over 100 defense contractors identified either as "criminally convicted of fraud" or involved in judgments, settlements, debarments and suspensions.
The report, Report to Congress on Contracting Fraud (pdf) was the result of a provision that Sen. Bernie Sanders (I-VT) added to the defense bill last year and gives a clearer picture of why the US military continues demanding an ever-increasing budget.
For instance, according to the Criminal Convictions chart in the report, Herley Industries date of action in its criminal conviction was May 5, 2008 and of its obligated funds totaling $29,666,729 for FY07-09, received $12,033,070 after the date of action. Its conviction resulted in a $3.5M fine.
Another contractor in the Criminal Convictions chart is Weston Solutions Inc whose date of action was September 21, 2007. Funds obligated to it for FY07-09 were $547,842,972. The company received $333,037,574 after the date of its conviction, while having a $30,000 fine levied against it.
The report is full of such misappropriation of funds and begs the question of oversight.
Huffington Post reports that the Pentagon paid out $285 billion to over 100 contractors in FY07-09 even as those companies were “defrauding taxpayers.” An addition $270 billion went to 91 contractors involved in civil fraud cases.
But the report is not filled with names like Weston Solutions or Herley Industries, names the average American taxpayer may never have heard of. Heavyweights such as the Boeing Company, Canadian Commercial Corporation, Computer Sciences Corporation, Bell Helicopter Textron, Inc, Hawker Beechcraft, Raytheon Company-Integrated Defense Systems and Honeywell International, among others, dot the charts.
In a disturbing note of business-as-usual, the report states:
“The Joint Explanatory Statement also required the Department to include recommendations for penalties for contractors who are repeatedly involved in contract fraud allegations. The Department believes that existing remedies with respect to contractor wrongdoing are sufficient.”
In addressing the issue of defense contractor waste, fraud and abuse, Sanders said America’s deficit cannot be properly addressed without giving close scrutiny to the Pentagon’s budget.
“With the country running a $14 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money. The sad truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money,” Sanders said, according to Huffington Post.
The report comes after a SIGIR report released earlier this week stating Iraq's conditions remain dire, thanks to a US-led occupation, and calls for more funding in order for the country to take over operations as the US military plans scale-back operations.
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