Despite the warning flags, and the billions earmarked for Iraq-War contracts, the DoD Inspector General quietly withdrew auditors last year. And it wasn't news until this month.
In October 2004, the Defense Department's Inspector General
quietly withdrew auditors from Iraq, purportedly because other agencies were already monitoring
some contracts. The Defense Contract Audit Agency was one, but it reportedly doesn't root out fraud as well as the IG's office. Incidentally, IG reports are public, while most of the DCAA's are
classified.
Warning flags wildly flapped during the year before the watchdogs went home: Halliburton, alone, overcharged the taxpayers $61 million for fuel and $27 million for troops' meals. And let's not forget Bechtel and Custer Battles.
Even if contractor fraud hadn't persistently graced the headlines since the Iraq War began, history shows that contractors require intense monitoring.
Below are just three examples of companies nabbed by the Justice Department.
In 2000, Boeing settled a suit for $54 million after allegedly selling the Army defective helicopters. Five servicemen died in a defective-chopper crash.
In 1998, Justice sued Hunt Building Corp. for $45 million after Hunt allegedly built uninhabitable housing at a South Dakota Air Force Base. Years later, Hunt settled the suit for $8.8 million.
In 1997, the Pratt & Whitney Group settled a suit for $14.8 million after allegedly using false purchase orders and invoices to funnel $10 million of U.S. military aid into an Israeli officer's personal slush fund.
The examples are voluminous, and defense contractors aren't necessarily the biggest perps. Healthcare contractors paid the "lions share" of Justice Department fraud settlements from 2000-2003.
More about healthcare fraud later.