FACT SHEET
On The Anti-War Profiteering Amendment
To The Defense Authorization Bill

[The Leahy Amendment, now pending to the Defense Authorization bill on the Senate Floor, is similar to the Leahy anti-war profiteering legislation approved last year by the Senate as a provision of the $87 billion Iraq war supplemental appropriations bill.  The White House prevailed on House conferees to strip the Leahy amendment from the final version of the Iraq spending bill.  The Leahy Amendment may come to a vote on Wednesday, June 16.  Contact: David Carle, 202-224-3693.]

LEAHY AMENDMENT
ON WAR PROFITEERING PREVENTION
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·        The Leahy amendment creates a new criminal penalty for war profiteering.

·        The amendment also prohibits any fraud, or false statement, in matters involving a contract or the provision of any goods or services in connection with war, military activities, or relief or reconstruction activities overseas.

·        Similar to recently enacted anti-terrorism laws, the Leahy amendment creates extraterritorial jurisdiction over offenses committed overseas.  It also covers anyone in the U.S. or abroad.

·        If convicted, violators of this statute face up to twenty years in prison and a fine not to exceed the greater of $1,000,000 or twice the amount of any illegal gross profits.

·        The Leahy Amendment is carefully constructed and is warranted by the lack of adequate taxpayer protections for the expenditure of federal funds in Iraq, and beyond. 

·        Under the Leahy amendment, war profiteering is defined as “materially overvaluing” any good or service with the specific intent to “excessively profit” from the war and relief or reconstruction activities.

T         Both “materiality” and “overvaluation” are common terms in the criminal code and have been appropriately interpreted and applied by the courts and juries for years.

T         War profiteering is defined as materially overvaluing any good or service with the specific intent to “excessively profit” from the war and relief or reconstruction activities.

T         The term "excessively profit", is taken directly from the Renegotiation Act, a World War II era statute, repealed at the end of the war, designed to prevent profiteering.  

T         The constitutionality of Renegotiation Act was upheld in by the Supreme Court in Lichter v. United States, 68 U.S. 1294 (1948). 

T         The Court later found that the term “excessive profits” provides sufficient guidance to the fact-finder (e.g. a jury).  Touby v. United States, 500 U.S. 160 (1991).

T         There is ample case law that establishes specific guidelines for making this determination.   

·        With respect to the elements of the amendment concerning fraud, the first three items in the Leahy amendment largely track existing fraud statutes.  The amendment simply makes it easier to assert U.S. jurisdiction and removes unnecessary obstacles to prosecution.

·        The amendment is similar to legislation that passed the Senate during consideration of the Iraq Supplemental Appropriations bill in 2003, but which was stripped by House Republican leaders at conference, at the White House’s insistence.  The amendment is also similar to the Leahy bill S.1813, which has 20 cosponsors.   

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