Durbin Says Companies that Cheat Taxpayers Should Not be Awarded Government Contracts to Rebuild New Orleans

DURBIN SAYS COMPANIES THAT CHEAT TAXPAYERS SHOULD NOT BE AWARDED GOVERNMENT CONTRACTS TO REBUILD NEW ORLEANS

U.S. Senator Dick Durbin (D-IL) today introduced the Reconstruction Accountability and Anti-Fraud Act to ensure that future federal reconstruction dollars to rebuild Iraq and the Katrina-ravaged Gulf Coast are not used to reward companies with histories of cheating American taxpayers.

"Rewarding contracts to companies with a record of overcharging and defrauding the government is an insult to America's taxpayers," Durbin said.

Durbin said the bill will promote accountability and prevent fraud by private corporations competing for future federal contracts to rebuild Iraq, New Orleans and areas of the Gulf Coast damaged by Hurricane Katrina. Durbin said his bill will bar from all reconstruction efforts in Iraq and the Gulf Coast firms that have cheated taxpayers by overcharging, improperly billing or defrauding the government of more than $10 million over the last five years. Firms that have been suspended from competing for federal contracts will also be barred from all reconstruction efforts in Iraq and the Gulf Coast.

"Katrina is a national tragedy and rebuilding Iraq is a national responsibility, and neither should be an opportunity for profiteering," Durbin said. "The American people will not stand for war profiteering or tragedy profiteering, nor will they tolerate the same firms that have misused Iraq construction funds being rewarded with no-bid contracts to rebuild the Gulf Coast."

"Congress must ensure that reconstruction dollars meant to help Katrina victims rebuild their lives are not diverted to irresponsible contractors seeking to pad their bottom lines. Whether the work is done in Iraq or in Louisiana, Alabama or Mississippi, there must be honesty, transparency, and accountability," Durbin added.

Durbin noted that the energy giant Halliburton and its subsidiary, Kellogg, Brown & Root, were among the first companies awarded multi-billion dollar no-bid contracts for Katrina reconstruction work, despite repeatedly overcharging the government for work in Iraq. In 2004, for example, Halliburton was found to have overcharged the Defense Department by $167 million to import gasoline into Iraq from Kuwait. A year later, a Pentagon audit revealed another $108 million in overcharges by KBR, a Halliburton subsidiary, for delivering gasoline to Iraq. In 2003, KBR overcharged the government $27.4 million over nine-months for meals at five military bases in Iraq and Kuwait, where they billed the government for an average of 42,000 meals a day but served only 14,000 meals a day.

Durbin noted that many of the contracting practices blamed for wasteful spending in Iraq, including the ‘cost-plus' provisions that guarantee profits to contractors, are being used in the Gulf Coast. Under his Reconstruction Accountability and Anti-Fraud Act, Durbin said, companies like Halliburton will pay a price for wasting taxpayer dollars and defrauding the American people.

"American taxpayers and the people of the Gulf Coast cannot afford reconstruction based on the Halliburton business model of waste, fraud and abuse. We must increase oversight and accountability in Iraq and demand the same here at home," Durbin concluded.

http://durbin.senate.gov/record.cfm?id=251397&&