More Contracts, More Fraud, Less Scrutiny

| Wed Apr. 1, 2009 8:20 AM PDT
The Bush administration presided over explosive growth in defense-related contracting. Part of it was the natural result of the wars in Iraq and Afghanistan; part of it was ideology and a deeply held belief that anything government can do the private sector can do better and cheaper. And maybe so. I won't argue it here. But whatever your views on the role of private companies in military operations, there's little question that the flurry of Pentagon contracts issued since 9/11 has, in numerous instances, led to gross abuse and corruption by companies that took advantage of weak regulation and a Congress that, despite much breathless posturing, has still failed to do much to bring things under control. The numbers speak for themselves. As the Pentagon doubled its contracting budget, the number of criminal investigations for contract fraud declined dramatically. According to a report released today by the Center for Public Integrity:
Defense contracting grew from about $200 billion in fiscal year 1993 at the start of the Clinton presidency to nearly $400 billion in FY 2008 at the end of President George W. Bush’s administration (1993 dollars adjusted for inflation to 2008 dollars). But Defense Department investigators during the Bush administration sent 76 percent fewer contracting fraud and corruption cases to the Justice Department for potential criminal prosecution than were referred under Clinton, according to Justice Department data analyzed by the Center for Public Integrity.
“No one is minding the store,” said William G. Dupree, a former director of the Defense Criminal Investigative Service (DCIS), which investigates contracting fraud. “Someone needs to address that.”
The FBI, which is also involved in such probes, sent 55 percent fewer government-wide contracting fraud and corruption cases to prosecutors for the same time periods reviewed. These cases cut across all agencies, but the Defense Department was responsible for more than 65 percent of federal contracting during the Bush administration. And FBI statistics requested by the Center focusing just on the Pentagon document a similar trend. In 2001, the Bureau referred 213 Defense Department procurement fraud cases to Justice Department prosecutors; by 2008, the total had fallen to 86.
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