War Profiteering Prevention Act of 2007

Press Release

WAR PROFITEERING PREVENTION ACT OF 2007 -- (House of Representatives - October 09, 2007)

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Ms. HIRONO. Mr. Speaker, I rise in support of H.R. 400, the War Profiteering Prevention Act of 2007. I am a proud cosponsor of this legislation, introduced by my colleague from Hawaii Neil Abercrombie. This bill would prohibit profiteering and fraud relating to contracts executed by the United States Government or a provisional authority for the provision of goods and services in support of U.S. missions overseas. This long overdue legislation will help correct the unconscionable and unpatriotic defrauding of the United States government, our armed services, and American taxpayers. Unfortunately, the problem of contractor fraud has proliferated in the past 4 years.

The United States has spent over $50 billion on contracts thus far in Iraq to provide for support services, security, infrastructure construction, and reconstruction work. Much of this spending has been under no-bid or cost-plus contracts. As a result of inadequate planning, control, enforcement, and prosecution, the free-spending, former Coalition Provisional Authority could not account for $8.8 billion of that money. Allegations about rampant waste, over-billing, and outright fraud have been reported time and time again, but no action has been taken to correct this waste of taxpayer dollars.

Unfortunately, current law does not explicitly extend extraterritorial jurisdiction for contract fraud on contracts executed by the U.S. Government or any provisional authority supporting a U.S. mission abroad. As a result, numerous instances of fraud have been committed and inspectors general have initiated hundreds of investigations of alleged fraudulent practices, including illegal kickbacks, bid-rigging, embezzlement, faulty construction, and fraudulent over-billing.

We need to toughen the laws which apply to individuals and corporations who have placed personal profit and greed over the interests of American taxpayers and our men and women serving in the armed services. While most private contractors are not overcharging the government and are providing good value with their goods and services, others are engaged in fraud and waste, costing the American taxpayers billions of dollars that could be spent on domestic needs, including funds that could have gone to our underfunded schools, health clinics, infrastructure, and environmental programs.

Even when the government does act to enforce fraud statutes on the books, it has been stymied by the inadequacy of current law. The infamous case against Custer Battles, an American contractor in Iraq found to have committed 37 acts of fraud, is a case in point. Custer Battles was one of a few contractors that was actually prosecuted and was ordered to pay $10 million in damages. However, it was allowed to walk away scot-free when a federal judge overturned the verdict on a technicality. The court found that United States fraud law did not apply to this contractor since the contract went through the Coalition Provisional Authority which the court held was not part of the United States government. The incompetence of this administration not only permitted fraud against the U.S. but allowed the perpetrator to escape punishment.

To successfully prosecute these individuals and corporations, H.R. 400 provides clear and unambiguous legal authority to criminalize this unconscionable behavior on the part of greedy, corrupt contractors and provides a mechanism for successful prosecution. We are talking about prosecuting contractors who willfully and intentionally defraud the government, not those who merely make a business mistake. We should have no sympathy or leniency for those who purposely defraud taxpayers.

This is not a partisan issue. As Americans, we should all stand together to put an end to greed and corruption in our government programs, which hurts the troops on the ground, undermines the efforts of our armed forces, enriches the greedy and corrupt, and steals from the American taxpayer. This must end, H.R. 400 is a major step to bring accountability to the contracting process.

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