Stephen Barr writes of a bipartisan bill intended to clean up the contracting fraud, corruption and strengthen oversight and control.
I encourage everyone to write to their Congresspersons and Senators regarding the need for such strong legislation and enforcement of such legislation as well as existing laws and policies which were intended to stop corruption, revolving door use and have not been enforced consistently, if at all, for some time.
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New Deal for Contracting
By Stephen Barr
Friday, November 9, 2007; D01
The Senate has approved a bipartisan bill to tighten up scandal-prone contracting practices across government, spurred by the troubled cleanup after Hurricane Katrina and wasteful spending on Iraq war reconstruction.
The bill would mandate steps to strengthen the federal acquisition workforce, which was hollowed out in the 1990s by budget cuts and downsizing. It would also establish a government-wide acquisition intern program to help recruit contract specialists and create an executive position in the Office of Management and Budget to oversee and nurture the acquisition workforce.
Members of Congress are increasingly concerned about contracts that the government has been awarding with little or no competition. They believe it needs to adopt practices that promote accountability and transparency. Changes to the procurement system could be made this year and next.
Another possible avenue for these changes is a defense bill that authorizes weapons and military programs for this fiscal year. House and Senate negotiators are trying to wrap up that bill, which will probably include some government-wide provisions to curb waste and fraud in procurement. However, it faces a veto threat over provisions not related to procurement.
The Senate bill, which would cover all federal agencies, was approved late Wednesday on a voice vote with no debate. It is sponsored by Sens. Susan M. Collins (R-Maine) and Joseph I. Lieberman (I-Conn.) The House approved a bill in March that would clamp down on contract abuse across the government. Its chief sponsor is Rep. Henry A. Waxman (D-Calif.).
A number of provisions in the bills are drawn from information collected during an 18-month review by an advisory panel Congress created in 2003, and from reports issued by inspectors general and the Government Accountability Office.
The government spends about $400 billion annually on goods and services. About half of that amount is awarded through no-bid or limited-competition contracts, or ones that fall short of the goal of full and open competition, according to Collins and Lieberman.
"Whether the problem is purchases of unusable trailers for hurricane victims, shoddy construction of schools and clinics in Iraq, or abuse of purchase cards by government employees, we must do a better job of protecting taxpayer dollars," Collins said.
Lieberman said that "the problem will only worsen in the years ahead" and that the government and contractors "have a responsibility to do a better job than they are now."
The Senate bill seeks to address the growth in task-order contracts, which carry basic terms and conditions and are used by agencies to place orders for specific goods and services.
It would require agencies to run competitions for all task orders worth more than $100,000. For orders of more than $5 million, agencies would have to include more information in the contract's statement of work than is currently required. Agencies also could not award a task-order contract for more than $100 million to only one vendor without publication of justification and approval documents on federal Web sites.
Senate bill supporters think the most beneficial changes in the long term are those aimed at strengthening the acquisition workforce. Many agency contract offices are thinly staffed, and about half of the most experienced hands -- those with more than 15 years of service -- will become eligible to retire in the next four years.
The Senate bill would require agencies to develop plans for hiring and training a new generation of contract specialists and establish an intern program. The House bill would require agencies to dedicate 1 percent of their contracting budgets to workforce development and hiring.
Because the bills strike similar themes, House and Senate aides said that it should be possible to forge a compromise. But they declined to predict when an agreement might be reached, given the end-of-the-year workload facing Congress.
Stephen Barr's e-mail address isbarrs@washpost.com.

Whistleblower' s Information Deleted by Treasury Department Before Report
Went to Congress

"This case is about the Bush Administration censoring the information
available to the Congress and the American people, who are paying for these
loans" - Jeff Ruch, PEER

09.28.04

In 2002, John M. Fitzgerald was the sole environmental analyst at the U.S.
Agency for International Development (USAID), monitoring reviews and
compliance on complex overseas development projects funded by loans that
included U.S. dollars. That September, USAID eliminated his position without
warning, and Fitzgerald was forced to leave.

Suspecting that the move was retaliation for his attempts to report legal
violations and environmental mismanagement to Congress, Fitzgerald filed a
complaint with the Merit Systems Protection Board, a civil service court.

On September 1, the Board agreed with Fitzgerald, ruling that his
disclosures were protected under the Whistleblower Protection Act, and that
making them contributed to the elimination of his job. He is now entitled to
a full hearing to determine if he is to be reinstated, along with possible
financial compensation.

Andrew Natsios,
Administrator for USAID

Fitzgerald named several federal officials in his complaint, including Bush
administration appointees Andrew Natsios, Administrator for USAID, and John
Taylor, the U.S. Treasury Department Undersecretary for International
Affairs.

Fitzgerald charged that USAID gave in to pressure from the Treasury
Department, which was seeking approval to finance energy projects in South
America, Africa and Eastern Europe. Fitzgerald had been preparing reports
detailing a pervasive lack of environmental reviews, poor planning for
likely environmental problems, and a failure to consider alternatives to
highly environmentally destructive proposals. [1]

In an analysis of a proposed Chad-Cameroon oil pipeline project, Fitzgerald
wrote that the pipeline developers themselves had done the environmental
assessment, rather than the governments involved, as required by the World
Bank (which was helping to finance the project).

He noted that issues such as financial and legal responsibility for oil
spills, creation of parks and wildlife habitat to compensate for the areas
lost to the project, and the impacts on indigenous and poor peoples were not
being addressed.

Treasury officials removed this information from Fitzgerald's report before
it was delivered to Congress. [2]

“This case is about the Bush Administration censoring the information
available to the Congress and the American people, who are paying for these
loans,” stated PEER Executive director Jeff Ruch, noting that since
Fitzgerald’s departure the required bi-annual reports to Congress have
ceased. “These reviews are supposed to prevent needless environmental
catastrophes in countries desperate for investment.”

A U.S. law--the "Pelosi Amendment" to the International Development and
Finance Act of 1989-- requires U.S. representatives to international
development banks, such as the World Bank, to deny U.S. support to projects
that have not had environmental reviews.

The Pelosi Amendment requires biannual reports to Congress. Since
Fitzgerald's departure two years ago, no reports have been made. [3]

President George W. Bush created the Center for Faith Based Initiatives at
USAID by executive order on December 12, 2002 in order to work to level the
playing field so that faith-based and community-based groups could compete
for funding on a level playing field with other organizations. The Center
and its staff of five are located within the Administrator' s Bureau at USAID
in Washington DC.

(Posted originally by a Whistleblower on Whistleblower411 on Yahoo.com Groups, 11-10-07. I had not heard this before, so decided to share it here.)

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Bush Administration, DOJ Blocking Iraq Fraud Suits
By Matt Renner
t r u t h o u t | Report
Wednesday 26 September 2007
Peter Keisler, the acting US attorney general, covered up evidence of alleged widespread contracting fraud in Iraq by preventing whistleblowers' complaints from being investigated, according to a prominent fraud attorney.
Alan Grayson, an attorney who has represented scores of whistleblowers in suits against companies that were awarded hundreds of millions of dollars in government contracts related to Iraq reconstruction, blamed the Bush administration for the lack of government action on Iraq fraud.
In an interview with Truthout, Grayson said Keisler has purposely delayed investigations into Iraq contractor fraud because of Keisler's political allegiance to the Bush administration. Keisler has refused to prosecute whistleblower lawsuits because Bush "does not want more bad news coming out of Iraq," Grayson said, adding "to have an entire class of cases treated this way is truly unprecedented. I've been doing this for 20 years and I've never seen it before."
Keisler was appointed by President Bush to serve as the acting attorney general after Alberto Gonzales resigned in September. In July 2003, Keisler, became the assistant attorney general in charge of the civil division, roughly three months after the invasion of Iraq. Among its responsibilities, the civil division of the Department of Justice (DOJ) is tasked with enforcing contract fraud laws and investigating whistleblower complaints. A former law clerk for Judge Robert Bork and former Regan administration lawyer, Keisler is a co-founder of the conservative Federalist Society.
During his time at DOJ, Keisler led the Bush administration's successful legal fight to deny habeas corpus rights for prisoners held at the Guantanamo Bay detention facility. Keisler recently resigned his post as assistant attorney general, saying he planned to spend time with his family. Keisler was nominated by the Bush administration to serve as a Federal Judge on the Washington DC Court of Appeals in 2006, but the Senate has not yet taken up his confirmation. He has failed to be confirmed by the Senate in two previous appointment attempts by Bush.
At a Senate Democratic Policy Committee hearing September 21 on Iraq war contractors, Senator Byron Dorgan (D-N. Dakota) said there "has been a staggering amount of contract abuse, the worst in our history."
In a hearing last week, Congressman Ike Skelton, chairman of the House Armed Services Committee, said Iraq contractor fraud remains a serious issue. "As has been reported in the press, the Inspector General and the Army have uncovered a cluster of fraud and corruption problems arising out of a series of support contracts, many of which were let from an office in Kuwait. As of August 28, the Army reported that it had 76 cases of fraud and corruption under investigation, had obtained 20 indictments, and had uncovered over $15 million in bribes. The people involved ranged from civilians and enlisted military personnel to relatively senior officers," Skelton said.
Yet, under Keisler's leadership, the DOJ civil division has refused to join any whistleblower suits against Iraq war contractors. DOJ work on behalf of whistleblower lawsuits against companies in other sectors has continued unabated.
The DOJ did not return calls for comment.
Keisler apparently took responsibility for the lack of Iraq fraud prosecutions in a keynote speech to the Taxpayers Against Fraud watchdog organization. The speech, however, was "off the record" and a transcript has not been made publicly available.
During his appearance before the Senate Democratic Policy Committee, Grayson said "Under the False Claims Act, the Attorney General is supposed to join with whistleblowers to prosecute and punish war profiteers. The sad truth is that the Bush Administration has not even tried to do this. On the contrary, it has done all it could to prevent this." The DOJ has not joined a single Iraq contracting fraud case brought by a whistleblower to date.
Under the False Claims Act, established by President Lincoln as a result of fraud and war profiteering during the civil war, any citizen has the ability to sue a company for fraud on behalf of the US government. In what is know as a qui tam action, a whistleblower can recoup legal fees and a percentage of the money the lawsuit recovers for the government. When a qui tam action is brought by a whistleblower, it is placed under seal to allow the government to review the case and to investigate the accused company in secret.
The DOJ has refused to join 12 such cases and an estimated 50-70 cases remain under seal. By delaying their decision on whether or not to join these cases, the DOJ has kept whistleblowers and their lawyers from going public with their fraud accusations and has kept the accused companies out of court.
Despite a rejection from the government, Grayson has decided to move forward with five of his pending cases against Iraq war contractors, three against the Halliburton Company and two against Custer Battles LLC.
Beth Daley, the director of the Project on Government Oversight, described the DOJ's lack of action on Iraq fraud cases as "breathtaking," and as "a travesty of justice." According to Daley, "When you see what has happened with the Iraq fraud cases, you have to wonder if the DOJ has succumbed to political partisan interests rather than fighting corruption, which is their mission. This has huge implications for our democracy; to lose the most important corruption fighting agency to political agendas would be quite sad. It means that corruption has been allowed to fester."
According to Patrick Burns, a spokesman for Taxpayers Against Fraud, the DOJ has suffered from a lack of staff and resources. Burns says the DOJ has a huge waiting list for fraud cases filed by whistleblowers. Burns added, "the DOJ civil division is a-political. Keisler is as straight a stick as you will get. He is a good lawyer and I have never felt the slightest subterfuge from him."
Previously, Burns told the Boston Globe, "Basically, they [the US government] have done nothing, and it is hard to explain what is going on there, other than direct orders from the very top of government," Burns continued, "It can no longer be explained by incompetence alone."

Matt Renner is an assistant editor and Washington reporter for Truthout.

Defense Contract Award Protested
By Walter F. Roche Jr.
The Los Angeles Times
Friday 26 October 2007
Washington - A Defense Department medical services contract worth up to $790 million was awarded last month to a Wisconsin-based company three months after it hired a former Bush administration appointee who had supervised military health programs at the Pentagon for the last six years.
William Winkenwerder Jr., assistant secretary of Defense for health affairs from 2001 until April, joined Logistics Health Inc. as a director and consultant in June. The firm beat out two other bidders with proposals that ranged from $80 million to $100 million less, records show. Under the new contract, Logistics Health will provide immunizations and physical and dental exams for reservists and National Guard members.
Logistics Health of LaCrosse, Wis., is headed by another ex-official of the Bush administration - former Secretary of Health and Human Services Tommy Thompson.
"They stacked the deck," said Fran Lessans, president of Passport Health, one of the losing bidders. Her Baltimore-based firm lost despite a bid projected over five years to cost nearly $100 million less than Logistics Health's winning proposal.
"It was wired. There is no doubt in my mind," Lessans said of the Defense procurement process.
Two other firms involved in the bidding have filed formal protests with the Government Accountability Office. A draft copy of one protest letter, reviewed by The Times, cited Winkenwerder's role and complained that the winning bidder may have "gained unequal access to information not available to other competitors" by hiring the former Pentagon official.
"This creates an organizational conflict of interest and potentially constitutes prohibited contact," the draft letter said.
Winkenwerder called such allegations inaccurate and untruthful. In e-mail responses to The Times, he said he had nothing to do with the procurement process or the selection of Logistics Health. He also said he had not begun contacts with Logistics officials about the directorship and consulting job until after he had resigned his Defense Department post.
His role at Logistics Health is to provide advice, he said, "on a variety of issues that are of concern and priority to the company. Government rules do not prohibit such advice in any way."
The rules bar him from contacting his former Pentagon colleagues on Logistics' behalf, "and I have followed those rules scrupulously. Further I support such rules and place a high importance on strict ethical behavior in all of my conduct."
Diana Henry, a spokeswoman for Logistics Health, said in a written statement that the company "conducts all of its business activities in a highly ethical and professional manner."
The contract, awarded in September, supports the Defense Department's Reserve Health Readiness Program. In prepared remarks for a subcommittee of the House Armed Services Committee two years ago, Winkenwerder said the program's goal was "to identify and proactively assist service members in getting needed support for deployment-related concerns." Besides routine exams, the program will provide full medical assessments to reservists and Guard members returning from Iraq and Afghanistan.
Logistics Health will be paid an estimated $151 million for the first year of a contract that can be renewed annually and extended up to five years at a total cost of about $790 million.
In other letters of protest filed with the GAO, officials of rival firms also charged that Logistics won the pact despite questions raised about its performance under a previous agreement with the Department of Health and Human Services. That pact, originally awarded in 2001, only applied to the Army, while the new one includes the Navy, Air Force and Marines.
Kenneth Moskowitz, an attorney for the Pennsylvania-based United States Military Dental Corp., said in an Oct. 12 letter that Logistics' prior performance and practices under the Health and Human Services contract "put reservists and National Guardsmen at possible undue risk."
He told the GAO that "no one was assigned to specifically monitor the level of care" received by military personnel and that the company operated with "a built-in incentive to lower provider cost for added profit." The Pennsylvania company was a subcontractor for Comprehensive Health Services of Florida, one of the failed bidders.
A spokesman for the Defense Department, citing the pending protests, declined to respond to a series of detailed questions about the contract and the selection process.
Records reviewed by The Times show that the Logistics Health bid also survived a major last-minute change when partner QTC Management abruptly withdrew days before the contract was awarded.
QTC Chairman Anthony J. Principi, another former Bush appointee, was secretary of Veterans Affairs.
The GAO has until early January to act on the protests.
The Defense Department gave initial notice of its intent to put the newly expanded program out to bid in October 2006.
Winkenwerder resigned from his Pentagon post April 16, and his appointment to the Logistics board was announced May 31. It became effective the next day. In announcing Winkenwerder's appointment, Thompson said: "He brings with him a wealth of knowledge and also shares LHI's commitment of helping military members receive the healthcare and support they deserve. He is a tremendous addition to our board of directors."
The formal notice of the bidding process was issued June 12. Bids were due July 26. On Sept. 10, QTC formally withdrew from the Logistics proposal. And on Sept. 25, the contract was awarded to Logistics.
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Key Witness Testifies Cunningham Tried to Hide Transactions
By Greg Moran
The San Diego Union Tribune
Saturday 13 October 2007
A former defense contractor who has admitted bribing former Rep. Randy "Duke" Cunningham testified yesterday that Cunningham tried to concoct a plan to conceal their business dealings after news about them first broke in July 2005.
Mitchell Wade said that after a June 2005 story in The San Diego Union-Tribune detailed how he had paid Cunningham a wildly inflated price for his Del Mar-area home, the congressman said Wade should say it was nothing more than "a deal between two friends."
"I thought it was ridiculous," Wade said. Soon after, he sent his lawyer to federal prosecutors in Washington, D.C., and offered to cooperate with the burgeoning investigation.
Wade testified yesterday at the bribery trial of Wilkes, his one-time mentor, about a years-long pattern of increasingly audacious bribes and gift-giving to Cunningham.
The rise of Wade's own Washington-based company, MZM Inc., was fueled by the bribes he gave to Cunningham, he said. In return, the congressman used his influence to appropriate funds for Defense Department programs and steer contracts from those programs to Wade.
Wade testified that he learned how to do this by watching Wilkes, whom he worked for as a consultant beginning in 1998.
Wilkes lavished Cunningham with fine food, liquor and trips - and in return Wilkes's Poway-based company, ADCS Inc., reaped millions in government contracts, Wade said.
Despite the lucrative deals that Wade said he and Wilkes got from Cunningham, the two contractors did not hold the legislator and war hero in high regard. They considered him to be "of below-average intelligence," Wade said.
The expensive dinners also became a bit of a chore, he testified.
"We would dread having dinner with (Cunningham) and having to listen to him repeat the same jokes," Wade said.
But Wade insinuated himself so close to Cunningham that, he testified, he kept a stack of blank stationery with Cunningham's letterhead in his MZM office. He would use it to write letters and memos that Cunningham dutifully signed.
Wilkes, 53, is on trial on 14 charges of bribery, money laundering and conspiracy. Federal prosecutors have said Cunningham steered more than $80 million in federal contracts to ADCS over seven years. In return, Wilkes supplied the Rancho Santa Fe Republican with $625,000 in cash and tens of thousands more in gifts, prosecutors say. Wilkes has pleaded not guilty.
Under questioning from Assistant U.S. Attorney Jason Forge, Wade said he made hundreds of thousands of dollars in consulting fees each year when he worked for Wilkes.
He testified that he helped Wilkes' company secure millions in government contracts. Asked several times what was the biggest factor in Wilkes' getting that business, Wade answered flatly, "Duke Cunningham."
At the time, Cunningham was on the powerful House Appropriations Committee and could place money in the budget for specific programs through a secretive process called "earmarking."
Cunningham pleaded guilty to conspiracy and tax evasion. He is serving an eight-year and four-month sentence in federal prison.
The contracts that Wilkes landed were for converting paper records into digital form. When Pentagon officials questioned the quality of the work or balked at funding the programs, Wade testified, he and Wilkes would get Cunningham to pressure the officials to help ADCS.
When Wade decided to strike out on his own with MZM in 2001, he said he followed the same model - but on a larger scale. Wade began wining and dining Cunningham with the goal of getting contracts for his company.
During one meeting in October 2001 at a Washington marina, Cunningham asked him for $50,000, Wade said.
"Did you view that request as a burden or an opportunity?" Forge asked.
"Opportunity," Wade responded.
He paid the bribe - routing the money through a New York mortgage company run by Thomas Kontogiannis, who later pleaded guilty to money laundering. Soon Wade started getting lucrative government contracts with Cunningham's help.
His bribery escalated, as he purchased a $140,000 boat for the congressman and later bought Cunningham's Del Mar-area home for far more than it was worth. He also paid off a $500,000 mortgage that Cunningham had on a new home in Rancho Santa Fe.
It all came crashing down in June 2005 when the Union-Tribune published a story detailing the house transaction. MZM was sold in August 2005 and has closed.
Wilkes' defense attorney, Mark Geragos, zeroed in on Wade's willingness to help prosecutors during his cross-examination. Wade's cooperation with federal authorities means the government can ask to have his sentence reduced, Geragos said - and Wade agreed.
Geragos also said that as Wade's own bribery of Cunningham escalated, Wilkes' standing with Cunningham faded. Eventually, Wilkes was a subcontractor on contracts awarded to Wade, Geragos said.
Geragos also had Wade acknowledge several times that Wilkes knew nothing about the large bribes that Wade was funneling to the congressman. None of that money came from Wilkes' companies, Geragos said.
Within a few years, Wade went from a one-man operation to owning a $2 million office building stuffed with expensive furnishings and capturing an estimated $150 million in government contracts.
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