War Fraud Whistleblowers Under Wraps

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War Fraud Whistleblowers Under Wraps

Monday 30 November 2009

by: Dina Rasor, t r u t h o u t | Special Investigative Report


Recently, the Congressional Research Service released an amazing statistic – it will cost one million dollars a year to support one soldier for one year in Afghanistan.

This mind-blowing number partly includes the cost of private contractors who have moved into areas of support that have been strictly military in the past. Estimates for the numbers of contractors have been as high as one contractor for every soldier. As President Obama prepares to announce his decision on Afghanistan, the price of this war is also on his mind since he included Peter Orszag, the director of the Office of Management and Budget, in his last war council.

One of the reasons for the high costs of maintaining each soldier is the lack of oversight of private contractor billings over the course of these two wars. The Department of Defense (DOD), and especially the Army, has fought the auditors and the investigators in the military who have attempted to expose fraud, waste, overbillings and other abuses of costs in contractor contracts. The contractors, using contingency contracting, which is similar to the old cost plus contracts, knew that their profits and, more important, their future task orders and contracts would be priced based on what they spend in the beginning of the wars. So the contractor billing meter, especially in labor costs, spun vigorously in the first years of the war with little oversight. When the Defense Contract Audit Agency (DCAA) tried to withhold a small percentage of payment from KBR, the largest contractor, because it believed that the billings were excessive and they wanted to scrub the numbers, the Army pushed past the DCAA and paid KBR the excessive costs. This set the tone to let the contractor billings run wild.

These unscrubbed, uninvestigated contractor billings promise to become the base costs for all the future contracts with all the fraud, waste and fat built into the baseline of future war contractor contracts. That is partly how it can cost a million dollars to take care of each soldier in Afghanistan for a year. KBR, the largest contractor which supports most of the Army’s basic needs, has already run up a bill of over $32 billion to feed troops, do their laundry, drive trucks and maintain the buildings in Iraq and Afghanistan. It is a service industry with no big plants or permanent workforce to maintain; yet it has billed an astonishing amount of money for everyday tasks.

So where are all the whistleblowers who have witnessed this fraud? There have been some who came forward to testify to some Congressional hearing but there has been very little follow-up. A few have also talked to the news media, but the story of exorbitant contractor billings comes and goes with little progress in solving the problem. There should be many whistleblowers out there since most of these contractors, unlike regular DOD contractors who build weapons, do not have a large permanent workforce but instead have a high turnover of employees.

I know where many of the whistleblowers, with their stories and documentation, are. They have in the past five years filed qui tam False Claims Act cases on behalf of the federal government to get some of the ill-gotten support money back from the contractors. Qui tam is a provision of the Federal False Claims Act that allows private citizens to file a lawsuit in the name of the US government charging fraud by government contractors and others who receive or use government funds, and share in any money recovered. One of the provisions of this law is that these cases are filed under seal, meaning in secret, so that the companies don’t know that the Department of Justice (DOJ) and the US Attorney Offices are investigating them. This also means that the cases do not show up on the court docket, so the general public also does not know about these cases. The seal was originally envisioned to last months but usually lasts years because the DOJ doesn’t have the necessary investigative resources or internal will to move these cases quickly. Many of the cases will be rejected by the DOJ and the whistleblower (called a relator), and his or her attorneys have the right to take the case through the courts themselves on behalf of the government. Because of the prohibitive costs and recent bad court rulings, it has been very difficult for relators to do that. So the relators do everything to help the DOJ investigate and intervene in the case and it is in their best interest not to object when the DOJ asks for extensions of the seal year after year even while the companies continue to defraud the government and the troops they are serving. In other words, while these seals run on for up to five years, the contractor overbilling meter is running.

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http://www.truthout.org/1130094