The Pentagon Fraud Papers: Contractors That Defrauded DOD Were Rewarded With $285 Billion in New Contracts

The Pentagon Fraud Papers: Contractors That Defrauded DOD Were Rewarded With $285 Billion in New Contracts

The Pentagon Fraud Papers: Contractors That Defrauded DOD Were Rewarded With $285 Billion in New Contracts

Vermont Senator Sanders wanted to know how the Pentagon deals with companies that defraud it. He demanded an accounting. Over a three-year period, contractors convicted of committing civil and criminal fraud were given new contracts worth $285 billion. Yes, that’s billion with a “B.”

Facebook
Twitter
Email
Flipboard
Pocket

Defense contractors that were convicted of defrauding the Pentagon received new contracts from the Department of Defense in the amount of $285 billion.

That’s a shocking number.

Even more shocking is the determination of the Department of Defense to continue the practice of steering taxpayer dollars into the bank accounts of contractors that the courts say intentionally stole money from the federal government.

Now, the question is whether Congress will be as tough on multinational corporations with long-term patterns of wrongdoing as it was on a community group that made a few mistakes.

In the fall of 2009, after some embarrassing revelations about misdeeds committed by low-level employees of Association of Community Organizations for Reform Now, Republicans forced Democrats in Congress to move with rare speed and dramatic reach to prevent the allocation of federal money to the advocates for low- and moderate-income families.

In so doing, they established an “ACORN Standard” for policing federal expenditures, which holds that if even a few employees of an organization that feeds at the public trough stand accused of engaging in activities that appear to be inappropriate, then federal funding must be yanked. (And now some of the same players are trying to apply a variation on the standard to Planned Parenthood.)

Vermont Senator Bernie Sanders was interested in whether the “ACORN Standard” was being applied uniformly, or just to community groups with which President Obama was once associated.

Sanders decided to look at where the real money is spent by the federal government: the Department of Defense.

“The sad truth of the matter is that virtually every major defense contractor in this country has, for a period of many years, been engaged in systemic, illegal, and fraudulent behavior, while receiving hundreds and hundreds of billions of dollars of taxpayer money,” the independent senator explained in a statement delivered on the Senate floor in the fall of 2009. “We’re not talking here about the $53 million that ACORN received over 15 years. We’re in fact talking about defense contractors who have received many, many billions in defense contracts and year after year, time after time, violated the law, ripping off the taxpayers of this country big time. And in some instances, these contractors have done more than ripping off the taxpayers. In some instances, they have endangered the lives and well being of the men and women who serve our country in the armed forces.”

To prove his point, Sanders attached a provision to a defense spending bill, which required the the Pentagon produce a report detailing instances of contract fraud and how they were dealt with. A preliminary report was made available Wednesday and it revealed that there’s a lot of fraud—involving more than 100 contractors during just the brief period that was studied.

But the real revelation involved how the Pentagon deals with convicted contractors. It gave them new contracts and lots more money. How much? A remarkable $285 billion during just the three-year period in thr latw 2000s that was covered by the report.

That’s $285 billion with a”b.”

The preliminary report concluded that:

1. The Pentagon distributed $270 billion from 2007 to 2009 to ninety-one contractors involved in civil fraud cases that resulted in judgments of more than $1 million.

2. The Pentagon spent another $682 million during the same period on thirty contractors convicted of hard-core criminal fraud in the same three-year period. Billions more went to firms that had been suspended or debarred by the Pentagon for misusing taxpayer dollars.

“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,” says Sanders.

But transparency is different from accountability.

The provision Sanders attached to the defense spending bill also required the Pentagon to detail how it was moving to address fraud. In particular, the provision directed the Department of Defense to recommend ways to punish fraudulent contractors.

The Pentagon saw no need to act. “The department believes that existing remedies with respect to contractor wrongdoing are sufficient,” concluded the Report to Congress on Contractor Fraud.

Sanders, who has emerged as the Senate’s chief watchdog when it comes to the frivilous and fraudulent financial dealings of major federal agencies, is of a different view.

“It is clear that DOD’s current approach is not working,” says the senator, who adds that “we need far more vigorous enforcement to protect taxpayers from massive fraud.”

Like this Blog Post? Read it on the Nation’s free iPhone App, NationNow.

Thank you for reading The Nation!

We hope you enjoyed the story you just read. It’s just one of many examples of incisive, deeply-reported journalism we publish—journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media. For nearly 160 years, The Nation has spoken truth to power and shone a light on issues that would otherwise be swept under the rug.

In a critical election year as well as a time of media austerity, independent journalism needs your continued support. The best way to do this is with a recurring donation. This month, we are asking readers like you who value truth and democracy to step up and support The Nation with a monthly contribution. We call these monthly donors Sustainers, a small but mighty group of supporters who ensure our team of writers, editors, and fact-checkers have the resources they need to report on breaking news, investigative feature stories that often take weeks or months to report, and much more.

There’s a lot to talk about in the coming months, from the presidential election and Supreme Court battles to the fight for bodily autonomy. We’ll cover all these issues and more, but this is only made possible with support from sustaining donors. Donate today—any amount you can spare each month is appreciated, even just the price of a cup of coffee.

The Nation does not bow to the interests of a corporate owner or advertisers—we answer only to readers like you who make our work possible. Set up a recurring donation today and ensure we can continue to hold the powerful accountable.

Thank you for your generosity.

Ad Policy
x