Statement Of Sen. Patrick Leahy (D-Vt.),

Senate Appropriations Committee,
Oversight Hearing On Waste, Fraud, And Abuse In Defense Department

Contracts Supporting Activities In Iraq And Afghanistan

July 23, 2008

 

Today, the Appropriations Committee continues rigorous oversight of how the Defense Department has spent more than $600 billion authorized for the wars in Iraq and Afghanistan.  The stories of billions lost to fraud, waste, and abuse during these wars are now all too familiar.   This Committee, as one of the main checks on this administration’s wasteful war spending, must not only follow-up on these outrageous reports, but dig deeper and ask tougher questions to make sure that those who are responsible for this fraud, waste, and abuse are held accountable under the law.

 

I want to thank Chairman Byrd for calling this hearing, and I will continue to support his longstanding and consistent efforts to make sure this Committee carries out its oversight duties, particularly over wasteful wartime spending. 

 

Just two months ago, the Defense Department's Inspector General issued a new audit of $10.7 billion in payments on basic commercial contracts during the wars in Iraq and Afghanistan.  This audit confirmed yet again that American taxpayers have no clear picture of how billions of dollars have been spent in Iraq and Afghanistan.  This audit found that there were no documents to show how $1.4 billion was spent, and more than seven billion dollars was spent without following the law or the Defense Department’s rules.  In some cases, there was no invoice showing what services were provided; in other cases, there was no record of who received the payment or for what purpose.  These individual contracts often involved millions of taxpayer dollars, yet the Defense Department had no record of how the money was spent.  The findings were so serious that the Inspector General referred one out of every 25 contracts for criminal investigation.  This is unacceptable, this is wrong, and this is another example of this administration's mismanagement of the wars in Iraq and Afghanistan. 

 

We need to do more than ask tough questions.  We need to start holding those responsible for this fraud accountable, and I hope our witnesses today will shed new light on the steps being taken to investigate and prosecute those who improperly received money or defrauded the government.  I was particularly concerned that this audit was based on a review of only a small sample of contracts, less than 1 percent of the total.  According to the audit, there are still more than 180,000 similar contracts to review that would lead to more than 700 new criminal investigations involving hundreds of millions of dollars.  I hope that our witnesses today will explain what efforts they have taken to carefully review all these remaining contracts, particularly where there's such a high risk for fraud.

 

I expect that we will also hear today how the task for reviewing and investigating these contracts during times of war is difficult and time-consuming.  While this may be true, it is no less important that we continue these reviews.  I have introduced legislation to give the government more tools to address this problem.   In the last three Congresses, I have introduced the War Profiteering Prevention Act, which would give prosecutors and investigators the ability to pursue war profiteers overseas and those who take advantage of so-called "cost plus" contracts to defraud our Nation.

 

Along with Senator Grassley, I have also introduced the Wartime Enforcement of Fraud Act, which would extend the statute of limitation for contract fraud offenses during wartime.   In past wars, Congress has suspended the criminal statute of limitations in order to give auditors and investigators more time to complete their reviews of wartime contracts.  This bill would do the same thing for the wars in Iraq and Afghanistan. 

This bill is important to make sure that those who have taken advantage of our nation during times of war shall not escape unpunished.

 

I look forward to hearing from out witnesses today, and I encourage them to redouble their efforts to combat fraud, waste, and abuse in Iraq and Afghanistan, it continues to undermine the efforts of our troops and to squander American's hard earned money overseas. 

 

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