[Dialogue] Justice Dept. Opts Out of Whistle-Blower Suits

[Sunny Walker]

A book about how "business is done", called (I think) Confessions of an
Economic Hit Man by an insider is very revealing and goes back LONG before
Iraq. The author graduated from college in the '60s and went into
(originally unknowingly) his "line of work" shortly thereafter.

 

Sunny Walker

Senior Facilitator

Council of Energy Resource Tribes

303-282-7576; cell: 303-587-3017

FAX: 303-282-7574

695 S. Colorado Blvd.

Denver, CO 80246

 

CERT MISSION

To support member Tribes as they develop their

management capabilities and use their energy resources

as the foundation for building stable,

balanced self-governed economies, according to each Tribe's vision and
priorities.

 

 

  _____  

From: dialogue-bounces at wedgeblade.net
[mailto:dialogue-bounces at wedgeblade.net] On Behalf Of Harry Wainwright
Sent: Wednesday, June 20, 2007 1:02 PM
To: 'Colleague Dialogue'
Subject: [Dialogue] Justice Dept. Opts Out of Whistle-Blower Suits

 



Published on Wednesday, June 20, 2007 by the Boston Globe
<http://www.boston.com/news/nation/washington/articles/2007/06/20/justice_de
pt_opts_out_of_whistle_blower_suits/>  

Justice Dept. Opts Out of Whistle-Blower Suits

by Farah Stockman

WASHINGTON - The Justice Department has opted out of at least 10
whistle-blower lawsuits alleging fraud and corruption in government
reconstruction and security contracts in Iraq, and has spent years
investigating additional fraud cases but has yet to try to recover any
money.

A congressional subcommittee heard testimony on the matter yesterday, as
lawmakers sought to determine why the federal government has not done more
to recover tens of millions of dollars that allegedly have been misused or
misspent in Iraq.

"I would expect, given the talent that the Justice Department has available
to it, . . . that they could have done more," Representative William D.
Delahunt, Democrat of Quincy, said at the hearing. "I have the uneasy
feeling like we're missing something here, a potential substantial
recovery."

The government's reluctance to join in any of the civil suits has sparked
allegations of political interference.

One witness, Alan Grayson , a lawyer who represents several whistle-blowers,
told the House subcommittee on Crime, Terrorism, and Homeland Security that
the Justice Department has been stonewalling and dragging its feet in
investigating the whistle-blowers' claims of fraud.

"In our fifth year in the war in Iraq, the Bush administration has not
litigated a single case against any war profiteer under the False Claims
Act," Grayson said.

Tens of millions of dollars - and perhaps far more - allegedly have gone
into the pockets of contractors who over billed for services, paid bribes,
and received kickbacks. Under the federal False Claims Act of 1863,
employees who say they witnessed such corruption can sue their employers for
defrauding the US government and reap a percentage of any money that's
recovered.

The federal government normally investigates such cases to determine whether
to participate in the suit and bring its investigative and legal resources
to bear against the accused company. But if the government declines,
whistle-blowers often face an uphill battle in court and often decide to
drop the matter - which has happened in at least three of the Iraq whistle -
blower cases.

"The [presiding] judge asks himself, 'If the Justice Department doesn't care
about this case, why should I?' " Grayson said.

The government has relied on private contractors in Iraq, issuing contracts
for everything from meals for troops to armed security for visiting
government officials. Since the 2003 invasion, contractors have come under
increasing scrutiny due to allegations of millions, if not billions, of
taxpayer dollars that are unaccounted for.

Historically, the False Claims Act has served as an important tool in
recovering money defrauded from the federal government. Last year, it was
used to return more than $3 billion in domestic cases, but has recovered
only about $6.1 million from Iraq since the war began.

Those recoveries, however, were the result of settlements between the
Justice Department and two contractors - not civil lawsuits or prosecutions.
EGL Inc., based in Houston, agreed to pay a $4.3 million settlement after
being accused of padding invoices on military cargo shipments, while Force
Protection Industry, based in South Carolina, paid $1.8 million after
allegedly withholding payments meant to speed the delivery of armored
vehicles in Iraq.

At yesterday's hearing, Deputy Assistant Attorney General Barry Sabin of the
Justice Department's criminal division, said the department has done its
best to investigate the cases, but has not been able to collect enough
evidence in Iraq to prove the whistle - blowers' claims. "The difficulty of
locating witnesses in an active combat zone cannot be overstated," he told
the committee.

Sabin said that the Justice Department is using other means to root out
corruption in Iraq, and pointed to the criminal prosecutions of 25
individuals accused of fraud who were also ordered to pay hundreds of
thousands of dollars in restitution.

Yet others wonder why the government has not been more aggressive in filing
civil suits against allegedly corrupt companies.

"Basically, they have done nothing , and it is hard to explain what is going
on there, other than direct orders from the very top of government," said
Patrick Burns , director of communications for Taxpayers Against Fraud, a
center that advises whistle-blowers on filing suits to recover government
funds. "It can no longer be explained by incompetence alone."

If companies are merely asked to pay settlements when they are caught
stealing or over billing, Burns said, "that isn't much of an incentive not
to steal. At this point, there is nothing more profitable than fraud."

Besides the two cases that were settled for $6.1 million, the Justice
Department has declined to join in 10 other cases. One was against Custer
Battles , a politically connected military contractor in Iraq that was
accused of supplying the military with trucks that didn't work and
overcharging the US government by as much as $50 million. When the
government chose not to participate, the whistle - blower went on with the
suit anyway , and a federal jury ordered Custer Battles to pay $10 million
in damages.

That judgment, however, was overturned. The case is currently on appeal.

A second, new whistle - blower lawsuit alleges that the company was renamed
and sold to former acting Navy secretary Hansford T. Johnson and former
acting Navy undersecretary Douglas Combs . It is unclear if it is still
doing business.

In April, the Justice Department opted out of a lawsuit against heavyweight
military contractor Kellogg Brown & Root and three of its subcontractors.
The lawsuit, launched by a former supervisor in Iraq, alleged that the
company billed the government for almost 10,000 meals per day that were
never served, adding up to more than $10 million in excess charges.

The whistle-blower in that case, Barrington T. Godfrey , alleges that he was
forced out of his job after he tried to stop the over billing.

His case, filed in 2005, had been kept secret for two years while the
government investigated it. Under the False Claims Act, cases remain secret
until the Justice Department decides whether or not to join them.

Farah Stockman can be reached at fstockman at globe.com.

C Copyright 2007 The Boston Globe

Article printed from www.CommonDreams.org 

URL to article: http://www.commondreams.org/archive/2007/06/20/1997/

 

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