July 18, 2007

Freshman Senators Call For Commission To Investigate Wartime Contracting

Greater Transparency, Accountability Demanded

Washington, DC – Senate Democratic freshmen today introduced a bill to establish an independent, bipartisan Commission on Wartime Contracting to investigate U.S. wartime contracting in Iraq and Afghanistan. The Commission would significantly increase transparency and accountability and generate important solutions for systematic contracting problems, potentially saving taxpayers billions of dollars.

The Commission will study and investigate the impact of the government’s growing reliance on civilian contractors to perform wartime functions. It will assess the extent of waste, fraud, abuse, and mismanagement of wartime contracts, and the extent to which those responsible have been held accountable.

The Commission will work in consultation with a newly-expanded Special Inspector General for Iraq Reconstruction (SIGIR) that will be authorized to audit defense wartime contracts for logistics support, as well as other federal agency contracts for security and intelligence functions in Operation Iraqi Freedom and Operation Enduring Freedom. This collaborative effort will result in specific findings and recommendations to improve inter-agency wartime contracting.

“Hundreds of billions of dollars have been allocated for reconstruction and stabilization efforts in Iraq alone, creating a strong potential for waste, fraud and abuse. The Commission will be retroactive in terms of accountability and proactive in terms of providing recommendations on wartime contracting. It will also address the widespread use of government contractors instead of American combat troops,” said Senator Webb.

“We are outsourcing this war in ways we’ve never seen,” continued Webb. “Defrauding the government of millions of taxpayer dollars should not be considered ‘the cost of doing business.’ It’s time for Congress to stand up on behalf of the American people and say: ‘We want our money back.’”

“During World War II, President Franklin Roosevelt said, ‘I don’t want to see a single war millionaire created in the United States as a result of this world disaster’. And so Missouri’s own Senator Harry Truman created a committee that investigated and uncovered millions of dollars in wasteful, wartime spending,” Senator McCaskill said.

“We know that the cost plus contracts used in Iraq and Afghanistan are nearly blank checks to private defense contractors, primed for waste, fraud and abuse. We need a new investigatory body, inspired by the Truman Committee, to protect our tax dollars and bring better accountability to the way we do business while at war,” continued McCaskill.

The bill, filed by Senators Jim Webb (D-VA) and Claire McCaskill (D-MO), is inspired by the work of the “Truman Committee” which conducted hundreds of hearings and investigations into government waste during WWII at an estimated savings of more than $178 billion (in today’s dollars) to the American taxpayer.

This is the first joint initiative of freshman Senators, including Webb, McCaskill, Amy Klobuchar (D-MN), Bernie Sanders (I-VT), Jon Tester (D-MT), Sherrod Brown (D-OH), Sheldon Whitehouse (D-RI), Ben Cardin (D-MD), and Bob Casey (PA).

Majority Whip Dick Durbin, Armed Services Committee Chairman Carl Levin and Senators Tom Carper, John Kerry, Diane Feinstein, Barbara Boxer, Barack Obama and Tim Johnson also serve as co-sponsors of the original amendment, filed as no. 2206, to the National Defense Authorization Act.

Waste, Fraud, Abuse and Mismanagement of Wartime Contracts

In Tuesday’s USA Today story entitled “Largest Iraq Contract Rife with Errors,” government auditors reviewing contractor KBR Inc.’s annual cost estimate for services in Iraq discovered that the company proposed $110 million in charges for housing, food, water, laundry and other services on bases that had been shut down. (http://www.usatoday.com/news/world/iraq/2007-07-16-iraq-auditors_N.htm)

An audit conducted by the Special Inspector General for Iraq Reconstruction found that the Parsons Company received $186 million over the past three years to construct 142 health-care centers in Iraq. As of May 10, only 15 centers had been completed—and only eight were open to the public

Outsourcing the War, Lack of Accountability

There are now more contractors (180,000) than military personnel (156, 247) in Iraq. A list of companies contracted in support of Operations Iraqi and Enduring Freedom does not exist. Figures on how much the government is paying contractors does not exist.

The Government Accountability Office reported that between fiscal years 2003 and 2006, the U.S. government has allocated more than $300 billion to support stabilization and reconstruction efforts in Iraq alone. This increasing reliance on contractors exposes billions of taxpayer dollars to potential misuse and waste.

“As a former Pennsylvania Auditor General, I know firsthand the need to aggressively root out waste in government,” said Senator Casey. “But it is especially egregious for companies doing business in Iraq to profit from fraud and abuse for taxpayer dollars to be lost as our troops are in harm’s way.”

“For too long we’ve heard horror stories of waste, fraud and abuse by government contractors. Montana taxpayers work too hard to subsidize this kind of greed,” said Senator Tester. “The wars we fight and shed blood for are not for profit. This legislation brings long overdue accountability and real change to the way American contractors do business in Iraq and Afghanistan.”

“This proposal is long overdue,” said Senator Klobuchar. “Again and again we have seen contractors wastefully spend hard-working American taxpayer dollars while this Administration sat idly by – enough is enough. When I was a county attorney, we always said, ‘follow the money and you’ll find the bad guys.’ This Commission will follow the money and it will make sure people are held accountable for waste, fraud, and abuse.”

“Iraq is a target rich-environment for corruption, and monitoring the expenditure of U.S. resources requires vigilance,” said Senator Whitehouse. “This Commission will ensure that the billions of dollars provided for reconstruction in Iraq are accounted for – so the hard-earned money U.S. taxpayers provide will serve the purposes we intend, for the benefit of both the American and the Iraqi people.”

“This administration has unapologetically attempted to privatize virtually every government function they can get their hands on,” said Senator Brown. “The rampant private contracting in Iraq is the most egregious example to date – but it’s certainly not the only one.”


Press Contact

Meaghan McCabe, (202) 224-2921