Close the Contractor Fraud Loophole Act

CLOSE THE CONTRACTOR FRAUD LOOPHOLE ACT -- (House of Representatives - April 23, 2008)

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Mr. WELCH of Vermont. Mr. Speaker, one of the fundamental responsibilities that this Congress has is to protect taxpayer dollars. That has become an enormous challenge, as many of the taxpayer dollars that are appropriated are paid to private contractors.

The growth in contracting in the past 6 or 7 years has exploded. Procurement spending in 2000 was $213 billion. Procurement spending is when we enter into a contract with a private company to deliver goods or services. That amount exploded last year to $412 billion. Much of that is going to Iraq and Afghanistan. Much of this is being subject to waste, fraud and abuse.

The Oversight Committee under Mr. Waxman and Mr. Davis has done vigorous oversight and identified in 2006 that there were 118 contracts valued at $745 billion that were found by government auditors to include a significant component of fraud, abuse and mismanagement. And, in fact, it got worse.

In 2008, that report identified 187 contracts valued at $1.1 trillion, where they were plagued by waste, fraud and abuse.

The bottom line is, will we, as a Congress, Republicans and Democrats, be vigilant in protecting taxpayer dollars? We have to do that, especially when there is documented evidence of rip-offs, wicked rip-offs that have occurred with taxpayer dollars in Afghanistan and in Iraq.

There's two goals that we have. The first that we widely share is that every taxpayer dollar will be accounted for, and that the taxpayers who were working hard to support this government and our troops will see that their money is spent on proper things that are in the contract. We have to protect the taxpayer.

The second is we've got to protect the troops. If we are spending money in Iraq and Afghanistan for the intended purpose of bringing our troops home and improving our national security, any dollar that's wasted that results in any additional injury, or one day prolonged in the conflicts, is a dollar that is improperly wasted. We cannot do that.

So I believe that this loophole, however it got there, by mistake or by sleight of hand, however it got there, it's got to be closed. Obviously, if you have a regulation, as it was written, that says we will report fraud when it is a rip-off on a domestic contract, but we won't when it's on a foreign contract, we're sending a very unambiguous message. There's a green light to rip off taxpayers if the money is being spent abroad. That's not a defensible position. And that's why we're closing this loophole to make it absolutely clear that's unacceptable.

Now I think it does make sense. What Congressman Davis proposed as a new way of proceeding is fine with me. And here's why. The bottom line is protecting the taxpayers and protecting our troops. And if we can accomplish that better by finding a way that has bipartisan support, we can all have more confidence that we'll be successful.

So I'm glad to work with Chairman Davis in order to have this get done in a bipartisan way. I want to thank very much Chairman Waxman and the great work of my chairman of the subcommittee, Mr. Towns, for bringing this forward so quickly and so effectively.

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