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Today's Must Read
Prepare to have your credulity tested.
Back in February, the AP broke the story that the White House had secretly modified a proposed rule to crack down on contract fraud. The rule, originally drafted by the Justice Department, was intended to force contractors to police themselves and report evidence of fraud or abuse. But the White House's version of the rule specifically exempted contractors working overseas on contracts that exceeded $5 million.
The Justice Department, which needs all the help it can get in busting corrupt contractors, was dismayed. But it made the major overseas contractors (like, say, Blackwater, KBR, CACI International, etc.), who had been opposing the rule, very happy.
When the AP asked why the White House had inserted the loophole, no answers were forthcoming. A spokeswoman from the Office of Management and Budget would only say that it was a "proposed rule," and that they were reviewing public comments.
And that was it. Over the ensuing months, members of Congress from both parties denounced the rule and vowed investigations. Even the Special Inspector General for Iraq Reconstruction publicly criticized the rule. But the White House otherwise stayed mum.
The first Congressional hearing was set for today. And the White House has let it be known that the loophole is gone -- and that it was all a big misunderstanding:
Reversing itself after months of criticism, the administration closed the loophole that was quietly slipped last year into a proposed Justice Department crackdown on government contract fraud....Government policywriters said the original rule was drawn up quickly, and chided the Justice Department for not explicitly making sure that overseas contracts should be included in the crackdown. "It was only after publication of the proposed rule ... that DoJ and other respondents expressed concern about the overseas exemption," the draft states....
A Bush administration official on Monday called the loophole "a drafting error" that happened when policywriters merely cut and pasted a 20-year-old Defense Department regulation into the contracting crackdown.
Oh well. Mistakes do happen.
Rep. Peter Welch (D-VT), who had called for the hearing, seems not to take the White House's story at face value: "This investigation proves why oversight works.... The question is why it required a congressional investigation to prevent the Bush administration from giving overseas contractors a free pass to defraud taxpayers."
Comments (26)
Has the 20 year old regulation been identified?
April 15, 2008 10:27 AM | Reply | Permalink
My gawd, is there a policy decision that was NOT guided by sheer greed and cronyism in the last 8 years?
April 15, 2008 10:48 AM | Reply | Permalink
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April 15, 2008 4:15 PM | Reply | Permalink
"specifically exempted contractors working overseas on contracts that exceeded $5 million."
Huh? I might understand not bothering with "small" contracts as it might cost more to investigate that what it's worth, but it would seem that it would be very easy to lard up larger contracts with all kinds of extraneous fees, etc.
April 15, 2008 10:51 AM | Reply | Permalink
Two of the links go to an empty document.
April 15, 2008 11:03 AM | Reply | Permalink
More proof that the Bush administration has been driven by greed and the desire to help out their contractor buddies who gave big donations to the GOP, rather than simple incompetence.
Not that Bushco didn't bring an overabundance of incompetence to the table...
April 15, 2008 11:11 AM | Reply | Permalink
Yes, Paul, my credulity was tested here! But at least the change was slipped in while the rule was still in the "proposed" stage rather than after it was made law as in the case of Coconut Rd.
April 15, 2008 11:19 AM | Reply | Permalink
Stunning news it's NOT!
7+ years of an Administration whose corruption is exceeded only by it's incompetence and this should be considered Shocking? They even branded themselves as SHOCK & AWE.
Not satisfied with the ease of skimming bucks from these giveaway contracts, they opted to use forklifts to scoop up the loot. After all, time is running out!
Now let's see if any meaningful investigations and/or charges are brought against any of them. I won't be holding my breathe waiting.
April 15, 2008 11:22 AM | Reply | Permalink
And Halliburton probably got the no-bid contract for the forklifts.
April 15, 2008 12:33 PM | Reply | Permalink
I hope our President* lives long enough to have even a partial comprehension of how poorly history will judge his tenure.
April 15, 2008 11:23 AM | Reply | Permalink
This all falls under the mistakes clause in boiler plate FAR contracts. "When we translated the contract from Arabic to English, the mistake went unnoticed; honest!" stated a unnamed White House attorney who wanted his identity withheld due to shear dishonesty.
April 15, 2008 11:27 AM | Reply | Permalink
20 years ago, hmmmm? Let me see, try out a little fuzzy math here ... 1988, right? St. Ronnie Ray-Gun, right?
What a surprise.
April 15, 2008 11:28 AM | Reply | Permalink
the level of dislike for the American taxpayer is once more shown, just like the Colombia trade pact.
good on Spkr Pelosi for all the criticism she's taken over impeachment being off the table, she somewhat rehabilitated herself when she told GWB she wouldn't bring the Columbia trade pact for a vote until we talked about fixing some of the US economic woes FIRST.
Oh he was not a happy camper.
April 15, 2008 11:34 AM | Reply | Permalink
No they don't.
People make mistakes. Some person inserted the language. Some one is responsible. I know this is anethema to the Bush/Cheney admin, but the proper and honorable thing to do is to admit your mistake, and then either accept being chided and change your ways, or resign in disgrace.
No matter what the outcome, a person, with a name, is responsible. Naming names is something the press must start doing again. That is how the press keeps the administration accountable.
April 15, 2008 11:36 AM | Reply | Permalink
BULL!
Twenty years ago, the Pentagon strictly monitored Fraud Waste and Abuse. Twenty years ago I was an Army COR and believe me, we were held accountable. Very accountable.
The hearings should continue drilling down in the investigation until someone's NAME comes out as the responsible person who inserted the text and also the name of who Approved the text. This should not stop until someone AT LEAST loses their job.
There I go again on that accountability thing...
April 15, 2008 11:43 AM | Reply | Permalink
It smeels of Dick Cheney
April 15, 2008 12:04 PM | Reply | Permalink
"A Bush administration official on Monday called the loophole "a drafting error" that happened when policywriters merely cut and pasted a 20-year-old Defense Department regulation into the contracting crackdown."
Hey, I worked in military procurement about 30 years ago. I can tell you I never, NEVER, saw any exceptions for contracts OVER a certain amount. It just does not happen.
April 15, 2008 12:51 PM | Reply | Permalink
Executive Privilege.
Can't talk about it. It will harm National Security.
If we name names, the terrorists will follow us home. Support the troops. Fight them over there so we don't fight them over here. If we leave now, it will embolden our enemies who are trying to KILL US.
... or something like that.
April 15, 2008 12:58 PM | Reply | Permalink
And trying to KILL YOUR CHILDREN!
April 15, 2008 1:25 PM | Reply | Permalink
The Bush Legacy:
Shit happens
April 15, 2008 1:21 PM | Reply | Permalink
Interesting to note that the administration is using incompetence as an excuse/cover.
Their incompetence is their only remaining credibility.
April 15, 2008 1:47 PM | Reply | Permalink
I agree with you Jim but we still don't know who drafted the list of fired US Attorneys I seriously doubt will find out who put the honest mistake (loophole) in the bill.
By the time the names are read the offenses will have been forgotten.
April 15, 2008 2:00 PM | Reply | Permalink
Let me see if I have this right. As long as your company was defrauding the American people out of a very large amount of money, the Bush Administration not only didn't care, their policies encouraged it. Very nice. Can we trust them at their word this loophole has been closed? No sirree bob.
It occurs to me that this is yet another staggering example of a fundamental truth about warfare (or anything else for that matter) that Bush and his pals have warped beyond recognition. Since time immemorial invading armies have pillaged those countries they invade. In Iraq, the Iraqis continue to loot their country and ours while our military contractors also plunder the US treasury.* It's inconceivable how any of this shit like this was allowed to happen. We don't even know the half of it yet.
The ugly truth is even if the fraud loophole is now closed the damage has been done and done and done. The US Treasury has been looted by Republicans and their favorite campaign contributors. The lion's share will be applied to Halliburton, Bechtel, Blackwater, McDonnell Douglas et al's bottom line and to provide post-Bush positions for their soon to be unemployed benefactors. Be aware that a significant tithe of these ill-gotten gains will be plowed back into future Republican campaigns and/or decidedly un-American causes (i.e. Focus On The Family, Freedom's Watch, blah blah blah).
Yes, these looters and fraudsters will hedge their bets and contribute serious money to Democrats this election cycle. They are not fucking stupid. They may even give a little more this time around to Dems than Repubs. But I will guarantee this cash won't come close to matching their total Republican campaign contributions during any election cycle in the last ten years.
Ugh. I could really use an adult beverage about now.
-AF
Andrew Sullivan Is A Fraud
*Believe you me all these crooks started turning their billions of dollars into euros well over a year ago.
April 15, 2008 2:34 PM | Reply | Permalink
AF beat me to it, but I had the same reaction...FORCING BIG CONTRACTORS TO POLICE THEMSELVES seems like a polite way of saying, "See, now we have rules here (hee hee), and you best follow them (hee hee) or else! (guffaws all around)."
Even without that loophole in place, what exactly has changed? Is there a mechanism for oversight, or REAL penalties for non-compliance in the new measure. And even if there were, any chance the US Government has the cojones to actually follow through and collect?
Massive rule-breaking hasn't exactly been met with much more than sternly worded letters the last 7.5 years.
April 15, 2008 4:22 PM | Reply | Permalink
Suggestion: the same names keep coming up year after year on the fraud, cost overruns, crime- committed-in-a-foreign-country news stories. I have trouble keeping things straight. How 'bout it TPM, why not a running top ten list of these slugs with a running total of incidents and amounts since, say, the last quarter or year-over-year. You've already got one annual award going, why not a Corporate Turkey Award every Thanksgiving?
April 15, 2008 4:51 PM | Reply | Permalink
Please, stop supporting the incompetence excuse. This is entirely deliberate and has been a very successful method of ripping off the American taxpayer.
April 15, 2008 8:38 PM | Reply | Permalink