Tag Archives: waste fraud and abuse

U.S. A Haven for Global Corruption Profits, Panelists Say

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POGO Anti-Corruption

Danielle Brian, POGO Executive Director, speaks at a panel, “Democracy Defenders in Dialogue: Sharing Lessons from Investigative Journalism and Anti-Corruption Advocacy Partnerships Around the World,” December 14, 2017.

 

 

 

 

 

 

 

 

 

 

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“Global Witness, an anti-corruption nonprofit that focuses on how corporate secrecy in developed countries facilitates corruption in developing ones, regularly highlights how criminals make use of anonymous American companies.

In one such example, Mexico’s largest drug cartel “used an anonymous Oklahoma company in a scheme to launder millions of dollars of drug money into the United States.” In another, a Russian mobster “allegedly set up a network of anonymous companies stretching from Eastern Pennsylvania to the United Kingdom to cheat the stock market and steal over $150 million from investors.”


“Last fall, the Miami Herald and a freelance journalist who works for Transparency International’s Russian chapter worked together to reveal how a Russian bureaucrat, ostensibly making the equivalent of $75,000 a year, was secretly buying multi-million dollar condos in South Florida. While Transparency International brought the individual’s corruption to the attention of the Russian government, the Miami Herald was able to focus its stories on the systemic problem of corrupt Russians (and others) using American real estate to hide and launder money.

The case is a prime example of how American journalists and advocates can work with their peers overseas to highlight the systemic problems that allow corruption to flourish and to help bring the individuals to justice in their own country. By working together and sharing information with international civil society groups, journalists can significantly amplify the impact of their stories. American regulatory, law enforcement, and intelligence agencies are better at their jobs because they regularly work with other countries. Journalists and advocates should do the same.

Danielle Brian, the Project On Government Oversight’s executive director, participated in a panel discussion in December examining how American journalists and anti-corruption nonprofits can partner with other groups around the world to more effectively address international corruption.

Panelists shared numerous instances when the impact of a story was amplified around the world as a direct result of organizations working together. The competitive media environment in the United States, however, means that such cooperation is rare here despite the potential benefits. With everybody looking to distinguish themselves, journalists are unlikely to share valuable records and risk having someone else publish the story first. International cooperation has also been hampered by technological barriers, although new platforms and tools are making it far easier to manage those partnerships. Despite the barriers, American journalists are beginning to take advantage of opportunities for cooperation.

Panelist Marina Walker Guevara, deputy director of DC-based International Consortium of Investigative Journalists, pointed to the Panama Papers and the more recent Paradise Papers projects to highlight the benefits of cooperation. The projects were based on massive leaks of information from firms that facilitate tax evasion and avoidance by the rich and powerful. The original recipient of the leaks, a German newspaper, decided that the sheer volume of records and the global scope required a global investigation. By partnering with a global consortium of trusted journalists, investigators were able to share access to records and help each other put various pieces of the puzzle together. All of the participating organizations had time to make sense of the records, and they then broke the news on the same day, creating a massive media wave that grabbed the world’s attention. As a result, approximately 80 countries have launched a total of nearly 150 audits, investigations, prosecutions, and arrests. One such investigation in India encompasses over four hundred entities. Iceland’s Prime Minister resigned, Pakistan’s former Prime Minister has been indicted, and the founders of the law firm whose records were leaked have been arrested.

Another organization that was featured on the panel is the Organized Crime and Corruption Reporting Program, led by Drew Sullivan and Paul Radu. Organized crime, they say, can only be defeated by an organized opposition. When that crime crosses national borders, the opposition must do so as well. Their organization is dedicated to conducting cross-border investigations, and they help teach other organizations how to maximize their impact through international reporting.

As international corruption increasingly crosses America’s borders, the oversight community needs to play catch-up.

“While the rest of the world provides the transparency that the U.S. demanded, the U.S. is rapidly becoming the new Switzerland,” the Bloomberg Editorial Board wrote in December. Despite requests from the previous administration, Congressional inaction on the issue has prevented the reporting of information like account balances and the names of beneficial owners—the same information that other countries provide to us. “A Russian billionaire, for example, can put real-estate assets in a U.S. trust and rest assured that neither the U.S. tax authorities nor his home-country government will will know anything about it.”

Corporation secrecy laws in Delaware, Nevada, Wyoming, and other states facilitate transnational crime, according to a Transparency International report from January 2016. Complex webs of anonymous shell companies can make law enforcement’s job much more difficult and allow foreign organizations to get away with defrauding Americans and committing crimes.

The bad news is that too many investigations into international corruption lead to American companies. The good news is that while corruption can transcend borders, the work of watchdogs can too. POGO is looking forward to working more closely with international groups in the months and years to come.”

http://www.pogo.org/blog/2018/01/us-a-haven-for-global-corruption-profits-panelists-say.html

 

 

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Big Data At Its Best – POGO Federal Contractor Misconduct Data Base

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POGO Misconduct

THE PROJECT ON GOVERNMENT OVERSIGHT – POGO”

“We encourage you to visit our Federal Contractor Misconduct Database, which currently contains 412 resolved and 121 pending instances of workplace-related misconduct by the federal government’s largest contractors.

The government’s top vendors have paid a collective total of $2.7 billion in fines, judgments, and settlements since 1996 for a wide variety of labor violations, including discrimination, health and safety hazards, unpaid wages, and whistleblower retaliation.

The vast majority of the labor misconduct instances in our database did not involve the federal government. About 54 percent were lawsuits filed by private parties, while another 7 percent were enforcement actions by local, state, and foreign governments. One instance we recently added is KBR’s $3.75 million settlement of a lawsuit brought by construction workers who alleged the company stiffed them on wages and meal breaks at a California mining facility.

The Trump administration’s efforts to roll back worker protections and oversight of contractors’ business practices could further shrink the percentage of labor instances involving Uncle Sam in our database. Nonetheless, at least for now, federal enforcers are still on the job. A few weeks ago, the National Nuclear Security Administration hit National Security Technologies, the managing contractor of the Nevada Test Site, with a proposed $112,500 fine for violations of worker safety and health requirements. In May, the Occupational Safety and Health Administration fined Exxon Mobil $164,775 for violations related to a November 2016 Baton Rouge refinery explosion that injured four workers.

A list of all resolved and pending labor misconduct instances in our database can be found at this link.”

http://www.pogo.org/blog/2017/09/celebrate-labor-day-by-diving-into-contractor-misconduct-data.html

 

 

Corporate Crime Crackdown

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Photo Credit: Derek Key / Flickr

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“In the 72 days between Election Day last year and the inauguration, federal agencies obtained more than $20 billion in penalties and settlements from dozens of companies accused of defrauding consumers or risking public health and safety.

That’s the key finding of the nonprofit watchdog Good Jobs First, which expanded its Violation Tracker database of corporate misconduct this week. Among the new cases added to Violation Tracker are the flurry of high-dollar settlements announced in the final days of the Obama administration:

  • Deutsche Bank ($7.2 billion): misleading investors in its sale of residential mortgage-backed securities
  • Credit Suisse ($5.3 billion): making false and irresponsible representations about residential mortgage-backed securities
  • Volkswagen ($4.3 billion): conspiracy to cheat US emissions tests
  • Takata Corporation ($1 billion): fraudulent conduct relating to the sale of defective airbag inflators
  • Moody’s ($864 million): providing flawed credit ratings for residential mortgage-backed securities and collateralized debt obligations
  • Western Union ($586 million): failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud

“Given the Trump administration’s focus on deregulation rather than enforcement, the Obama administration’s wave of case resolutions may represent Uncle Sam’s last hurrah against business misconduct for some time,” Good Jobs First Research Director Philip Mattera said in a press release.

Violation Tracker, launched in 2015, now contains 120,000 enforcement actions by 39 federal agencies in cases ranging from accounting fraud, consumer scams, and public health and safety hazards, to false claims, price fixing, and bribery. The database also added whistleblower retaliation cases handled by the Occupational Safety and Health Administration.

Violation Tracker is a good complement to POGO’s Federal Contractor Misconduct Database, which tracks fewer companies but covers a longer time period and isn’t limited to cases initiated by the federal government.

Good Jobs First maintains other useful corporate and government accountability resources. Its Subsidy Tracker database, about which we’ve blogged before, collects information on local, state, and federal economic development subsidies and other financial assistance to businesses. The organization also compiles corporate “rap sheets” on dozens of the world’s largest and most controversial companies.”

http://www.pogo.org/blog/2017/02/tracking-corporate-crime-crackdown-obama-database-violation-tracker.html

Government Fraud Recovery Bounces Back in 2016

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“THE PROJECT ON GOVERNMENT OVERSIGHT”

“It is  a substantial increase over last year’s total.

A large number of recoveries came from contract fraud cases involving some of Uncle Sam’s most prominent suppliers of goods and services.

The Justice Department announced on Wednesday it had recovered for taxpayers more than $4.7 billion through settlements and judgments from False Claims Act cases in fiscal year 2016. According to the announcement, it is the third highest annual recovery in False Claims Act history. It is also a substantial increase over last year’s total.

Of the $4.7 billion recovered, $2.5 billion came from health care fraud cases. An additional $1.7 billion came from settlements and judgments in cases alleging false claims in connection with federally insured residential mortgages.

  • Boeing: $18 million to settle allegations that it overcharged the US Air Force for aircraft maintenance services at Boeing’s Long Beach, California, depot. (In 2014, Boeing paid $23 million for allegedly overcharging maintenance work at its depot in San Antonio, Texas.)
  • Centerra Services International: $7.4 million to resolve a lawsuit accusing the company of overbilling the Army for firefighting services in the Middle East
  • Computer Sciences Corporation: $1.35 million for billing the Defense Information Systems Agency for subcontract workers who lacked the required security clearances
  • Deloitte Consulting LLP: $11.38 million to resolve overbilling claims on a General Services Administration contract
  • DRS Technical Services: $1 million to settle charges that employees billed the Army for hours they did not work
  • L-3 Communications: $25.6 million to settle claims of selling the government defective weapon sights
  • Lockheed Martin: $5 million for allegedly misleading federal and state regulators about noncompliance with environmental regulations at the Paducah Gaseous Diffusion Plant in Kentucky
  • SRA International: $1.1 million for alleged false billing on military contracts
  • United Technologies: $11 million in penalties, interest, and disgorgement of profits for overcharging the Air Force for jet engines in the 1980s
  • URS Corporation: $9 million to settle allegations that a subsidiary defrauded the government into awarding it construction contracts that it was not eligible to receive. In a different case, URS paid $580,000 for allegedly overbilling labor rates on a bridge reconstruction project.

The False Claims Act is the government’s primary tool to redress fraud in the areas of health care, defense and national security, food safety and inspection, federally insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, disaster assistance, and import tariffs. In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to come forward with allegations of fraud. Most false claims actions are filed by whistleblowers in qui tam lawsuits. Since 1986, the government has recovered slightly over $53 billion, awarding more than $6.3 billion of that to the whistleblowers who filed the lawsuits—often at great risk to their careers.

On the same day the Justice Department announced its annual fraud recoveries, it also announced it had collected nearly $15.4 billion in civil and criminal cases in FY 2016, one-third less than last year’s total. This amount includes recoveries in all civil and criminal enforcement cases (including those involving the False Claims Act), fines imposed on individuals and corporations for violations of federal financial, health, safety, civil rights, and environmental laws, and collected debts owed to the federal government.

How will the False Claims Act fare under the Trump administration? At least one expert foresees very little change.

Taxpayers Against Fraud acting president Patrick Burns recently observed that Senator Jeff Sessions (R-AL), President-elect Trump’s choice for Attorney General, “has never winked at companies that harm American workers and consumers” and “understand[s] the value of whistleblowers and whistleblower laws when it comes to fighting corporate theft and crony capitalism.” He noted that Sessions has supported strengthening the False Claims Act and has a good relationship with Senator Chuck Grassley (R-IA), the law’s key champion in the Senate.

Burns’ prediction gives us hope that active enforcement of the False Claims Act—and billions of dollars in annual recoveries—will continue for years to come.”

http://www.pogo.org/blog/2016/12/federal-fraud-recoveries-fy-2016.html

Intelligence Watchdog Finds Contractor Abuses

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“POGO”

“Dozens of instances when contractor employees fudged their timesheets, billing the government for time they were not at work or when they engaged in activities either personal in nature or outside the scope of the contract.

38 substantiated cases  – loss to the government of more than $2.5 million.

Last week brought news that another Booz Allen Hamilton employee was accused of improperly removing sensitive material from the National Security Agency (NSA). Harold Thomas Martin III was charged with theft of government property and unauthorized removal and retention of classified materials. The government alleges Martin took documents and digital files containing information that, if disclosed, “reasonably could be expected to cause exceptionally grave damage to the national security of the United States.”

It was another black eye for Booz Allen, which was NSA surveillance program whistleblower Edward Snowden’s employer. It was equally embarrassing for the U.S. intelligence community, which pays contractors like Booz Allen billions of dollars each year to help run its global operations and keep a tight lid on our country’s more sensitive secrets.

Just days after the Harold Martin story broke, U.S. intelligence contractors were again in the spotlight. On Sunday, VICE News reporter Jason Leopold posted hundreds of pages of Intelligence Community Inspector General (ICIG) investigative reports. The documents contain the juicy—and occasionally disturbing—details of misconduct investigations conducted by the ICIG, the watchdog office that oversees the federal intelligence agencies. Most of the cases involved employees of Booz Allen and other prominent contractors.

Specifically, the documents contain dozens of instances when contractor employees fudged their timesheets, billing the government for time they were not at work or when they engaged in activities either personal in nature or outside the scope of the contract.

The ICIG also found that some contractor employees, while working on extremely sensitive intelligence programs and operations, risked exposing classified information by using non-secure networks and computers. They did so while working for some of the government’s most trusted private sector partners: Booz Allen and SAIC are among only a handful of private firms that collectively employ nearly all of the intelligence community’s contractor workforce.

The implications of the VICE News revelations are enormous. Not only did the contractor employees rip off taxpayers, they also compromised national security. The ICIG reports bolster POGO’s concern that contractor timesheet fraud is especially rampant among intelligence programs due to a lack of transparency and insufficient contract oversight. However, they also give us a reason to be optimistic: they show that the intelligence watchdog takes its role seriously and doggedly pursues allegations of wrongdoing.”

http://www.pogo.org/blog/2016/10/intelligence-watchdog-finds-contractor-abuses.html

 

 

Air Force Contractors Reap Taxpayer-Funded False Profits Windfall

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“POGO”

“The U.S. Air Force might have paid contractors tens of millions of dollars in unwarranted profits, according to a new report by the Inspector General.

Boeing, Northrop Grumman, and Honeywell were paid between $9.6 million and $24.9 million in questionable profits and fees.

The report concluded that the Air Force did not effectively negotiate labor profit and fees with contractors providing depot maintenance services on F-15, C-5, C-130, and C-17 aircraft at Robins Air Force Base.

The IG reviewed only a small subset of Robins depot maintenance contracts—3 out of 33—so the overall amount of questionable or excessive contractor profit payments could be much higher. The three reviewed contracts are sole-source, public-private partnership (PPP) awards with an estimated value of more than $590 million through fiscal year 2019.

The IG found that Air Force contracting officials did not properly assess the relative difficulty of the work. It determined that the contracts entailed a relatively low performance risk to the contractors, which would have justified a reduced profit.

Contracting officials also did not eliminate profit and fees for “non-repair costs” (costs that did not directly support maintenance work, such as office supplies, depreciation of buildings, and salaries). Doing so would have netted the largest savings, since non-repair costs accounted for 69 to 78 percent of the profit and fees paid to the three contractors, according to the report.

“We believe that the contractor should earn a reasonable profit or fee on the depot’s work if they are responsible for a depot’s performance,” the IG reported. “However, contracting officials missed an opportunity to reduce or eliminate profit and fees for work performed by the WR-ALC [Warner Robins Air Logistics Complex] depot.”

The IG recommended ways the Air Force could improve management of the program. It did not recommend recovering any of the questionable payments.

This is not the first time the Pentagon’s watchdog has highlighted waste and mismanagement in Air Force depot maintenance PPPs. In 2010, the IG discovered serious problems in this program at several bases. For example, at Robins it found that lax Air Force oversight left Boeing owing the government $3.1 million in C-17 maintenance expenses.

We hope that the Air Force has learned from its mistakes and will make the necessary changes to ensure it can effectively collaborate with its contractor partners while keeping costs under control.”

http://www.pogo.org/blog/2016/02/false-profits-air-force-contractors-reap-windfall.html

 

Federal Fraud Recoveries Drop Over 38 Percent

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“POGO”

“Earlier this month, the Department of Justice (DOJ) announced that it obtained more than $3.5 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2015.

This is a sharp decrease from last year’s total of $5.7 billion, although, as the DOJ pointed out, it is the fourth consecutive year that recoveries exceeded $3.5 billion. Whether fraud was less prevalent or governmental enforcement was less vigorous during FY 2015, the DOJ provided no explanation for this decrease.

The False Claims Act (FCA) is the government’s primary tool for recovering funds stolen from federal programs: Medicare and Medicaid, contracts and grants, housing programs, disaster relief loans, and agricultural subsidies. Since 1986, when Congress strengthened the FCA, the DOJ has reclaimed $48.4 billion from companies and individuals accused of fraud.

Of the $3.5 billion recovered in FY 2015, $1.9 billion came from cases involving health care fraud. The second largest amount—$1.1 billion—was recovered in contract fraud cases.

According to the DOJ’s press release, the government recovered $2.8 billion in FY 2015 thanks to lawsuits filed by whistleblowers under the qui tam provisions of the FCA, which entitles them to a 15 to 25 percent share of the recovery. These whistleblowers—who took great personal and professional risks in filing suit—were awarded $597 million, or about 21 percent of the total.

According to the press release, whistleblowers filed 638 qui tam lawsuits in FY 2015. Unfortunately, the DOJ was mum on the number of FCA and qui tam lawsuits that are currently pending. Lawsuits can sometimes languish for years while the DOJ decides whether or not to intervene in them.

On the same day the DOJ heralded its annual fraud recoveries, it also announced that it had collected $23.1 billion in civil and criminal actions in FY 2015. This amount includes recoveries in civil and criminal enforcement cases (including those involving the FCA), fines imposed on individuals and corporations for violations of federal financial, health, safety, civil rights, and environmental laws, and collected debts owed to the federal government. This number also declined over the last year, although not as dramatically as the fraud recovery total.

Not everyone likes the FCA. For years, business groups have been trying to weaken the law. We were reminded of the precarious state of the FCA last month when the influential D.C. think tank the Center for Strategic and International Studies hosted a panel discussion on the law. The contracting industry-dominated panel disparaged the FCA in favor of alternative anti-fraud remedies less damaging to corporate earnings, such as self-policing.

The FCA should be strengthened, not eviscerated. The law incentivizes companies to adopt stronger corporate ethics practices and more rigorous oversight of their dealings with the government. Improving corporate behavior while helping the government recover billions of dollars every year is a win-win for taxpayers.”

http://www.pogo.org/blog/2015/12/federal-fraud-recoveries-drop-more-than-thirty-eight-percent.html

DoD Task Force Blew $150 Million in Afghanistan on Posh Digs

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Task Force Villas in Kabul

“POGO”

“The $150 million was spent on world-class accommodations for contractors, visitors, and between 5 and 10 Task Force staff.

Almost all of the money was awarded to three contractors—Triple Canopy ($57 million), Defense Group Incorporated ($51 million), and Muscogee Nation Business Enterprise ($40 million)—to provide an array of creature comforts.

Last week, Special Inspector General John Sopko sent a letter to Secretary of Defense Ashton Carter requesting information about the Task Force’s decision to spend nearly $150 million—20 percent of its budget—between 2009 and 2014 to rent luxurious private villas around Afghanistan.

SIGAR’s preliminary findings are alarming. The IG estimates that the government could have saved tens of millions of dollars if Task Force personnel had instead lived at DoD facilities or the U.S. Embassy. SIGAR also surmises that while living in private enclaves enabled the Task Force to move around the country and conduct its business more freely, it also might have diminished its effectiveness by hindering coordination with other agencies.

So far, DoD has ignored all of SIGAR’s inquiries about the Task Force, which shut down in March. SIGAR currently has several ongoing criminal investigations related to the Task Force.

The Senate has also jumped into the fray and is demanding answers. Senator Chuck Grassley (R-IA) requested records related to the Task Force’s operations and plans to seek a DoD Inspector General audit. Last week, Grassley wrote to Secretary Carterabout Army Colonel John Hope, who led the Task Force during its final months. Hope claims he has been singled out for retaliation for speaking out about the lack of accountability at the Task Force.

During its nine-year existence, the Task Force spent hundreds of millions of dollars on economic development projects in Iraq and Afghanistan. We look forward to these investigations shining additional light on how this program operated, what it achieved, and how this money was spent.”

http://www.pogo.org/blog/2015/12/dod-task-force-blew-150-million-on-posh-digs.html

 

Update – Leaders In Federal Contractor Misconduct Cases and Fines

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“POGO”

“Intriguing trends can be found in the Project On Government Oversight’s [POGO]  Federal Contractor Misconduct Database.

Energy companies BP and Exxon Mobil, pharmaceutical producers GlaxoSmithKline and Merck, and defense/aerospace titans Lockheed Martin and Boeing are tops in misbehavior among Uncle Sam’s leading sellers of goods and services.

POGO’s redesigned and upgraded database now profiles 206 of the federal government’s largest contractors. Recent additions include multinational holding company Berkshire Hathaway; petrochemical giants Compañía Española de Petróleos, S-Oil, and Total; private spaceflight company SpaceX; and health insurer UnitedHealth Group.

The database contains nearly 2,500 resolved and pending misconduct instances dating back to 1995. Over these 20 years, the entities in POGO’s database have paid at least $92 billion in fines, settlements, and court judgments. We say “at least” because many instances were settled confidentially or were resolved among multiple wrongdoers without a clear breakdown of how much each paid.

A relative handful of contractors are responsible for the majority of the instances and penalties. BP alone accounts for more than 37 percent of the penalty total, most of which stems from government and private legal actions over the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico. Pharmaceutical manufacturers GlaxoSmithKline, Pfizer, Merck, and Schering-Plough (which merged with Merck in 2009) account for almost 27 percent of the total with a combined $24.6 billion in misconduct penalties in cases alleging unsafe drugs, financial irregularities, and illegal marketing practices.

Misconduct by fossil fuel and pharmaceutical contractors now outpaces that by military hardware contractors in terms of penalty amount and number of instances. Exxon Mobil leads all contractors in the database with 84 instances of misconduct, and BP, Glaxo, Chevron, and Royal Dutch Shell rank among the top 10. But defense manufacturers still rank high on the instance count. Lockheed Martin and Boeing have the second and fourth highest number of resolved misconduct instances with 79 and 63, respectively. General Electric ranks fifth with 59.

Contractor Instances
Exxon Mobil 84
Lockheed Martin 79
BP P.L.C. 72
Boeing Company 63
General Electric 59
Honeywell International Inc. 56
GlaxoSmithKline 51
FedEx Corporation 50
ChevronTexaco Corporation 49
Royal Dutch Shell PLC 48
Contractor Penalty Amount
BP P.L.C. $34,304,768,328
GlaxoSmithKline $10,057,614,485
Merck & Co., Inc. $7,731,796,807
Pfizer, Inc. $5,212,339,444
Exxon Mobil $2,886,606,776
General Motors Corp. $2,343,461,334
Halliburton $2,181,343,077
McKesson $2,053,399,744
UnitedHealth Group $1,767,500,000
Schering-Plough Corporation $1,582,294,482

It should be noted that many contractors in the database have relatively “clean” misconduct histories. POGO has not found any instances of misconduct for 57 contractors. An additional 29 have only one instance. By contrast, the other 120 contractors—nearly 60 percent of the entities in our database—are recidivists.

Of the 17 different types of misconduct included in the database, labor and environmental violations are the most common, accounting for a combined 40 percent of the resolved instances. Violations relating to government contracts—fraud, cost/labor mischarging, poor performance, and defective pricing—account for 22 percent of the instances.

Another fascinating trend revealed by our data is the relative scarcity of criminal actions involving federal contractors. Less than 7 percent of the instances are criminal prosecutions. This is in line with the findings of government watchdog group Transactional Records Access Clearinghouse, which caused a stir last month when it reported that federal criminal prosecutions of corporations declined by nearly one-third over the past 10 years. Hopefully, this will change with the Justice Department’s new corporate crime-fighting policy.

Many of the contractors in POGO’s database have landed in the news recently for admitted or alleged misconduct:

These are among the thousands of instances in the database, most of which have downloadable source documents. In addition, with a single mouse click or finger tap, you can export misconduct data into a spreadsheet-ready file. We encourage you to dive into the data and take full advantage of the site’s features. You may be surprised by what you find.”

DoD Pays Premium for Gas Station in Afghanistan

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gas_station_575“POGO”

“The Department of Defense (DoD) spent nearly $43 million to build a gas station in Afghanistan that should have only cost between $200,000 and $500,000.

Incredibly, overhead costs accounted for about 70 percent ($30 million) of total project expenditures, according to the report.  DoD is unable—or unwilling—to provide a justification.

DoD’s Task Force for Business and Stability Operations spent $42.7 million between 2011 and 2014 to construct a compressed natural gas (CNG) automobile filling station in Sheberghan, Afghanistan. (You may recall Sheberghan as the site of an unfinished, hazard-filled teacher training facility built by the U.S. Army Corps of Engineers that we blogged about two years ago.) The station includes two dispensers/four hoses, one CNG trailer filling point, a car conversion center, an administrative office building, and gas compression and processing equipment. It is currently being operated by a private company, Qashqari Oil and Gas Services.

The Special Inspector General for Afghanistan Reconstruction (SIGAR). determined that the project should have only cost between $200,000 and $500,000. That means we taxpayers overpaid by as much as 10,750 percent. Incredibly, overhead costs accounted for about 70 percent ($30 million) of total project expenditures, according to the report.

According to SIGAR, the Task Force had neither considered the feasibility of the station nor the “potentially considerable obstacles to the project’s success” prior to starting construction. The report forecasts a bleak future for the station: the area lacks the infrastructure needed to transmit and distribute natural gas, and the cost of converting gasoline-powered cars to run on CNG is prohibitively expensive for average Afghanis.

DoD did not provide SIGAR with an explanation for the exorbitant cost or answer other questions concerning the project. Principal Deputy Under Secretary of Defense Brian P. McKeon told SIGAR that the March 2015 closure of the Task Force resulted in his office “no longer possessing the personnel expertise to address these questions.”

McKeon’s statement particularly rankled Special Inspector General John F. Sopko. “Frankly, I find it both shocking and incredible that DOD asserts that it no longer has any knowledge about TFBSO [the Task Force], an $800 million program that reported directly to the Office of the Secretary of Defense and only shut down a little over six months ago,” he wrote to Secretary of Defense Ashton Carter. The report calls McKeon’s claim of ignorance “unconvincing” and accuses DoD of hindering SIGAR’s investigation. Apparently, the contentious, counter-productive relationship between SIGAR and the Pentagon that we’ve blogged about before hasn’t improved.

SIGAR plans to issue additional reports on the Task Force’s activities and spending in Afghanistan. As for the gas station boondoggle, Sopko promises “to shed additional light on how this program operated, what it achieved, how this enormous amount of money was spent,” and, most ominously, “whether any conduct by TFBSO staff or contractors was criminal in nature.”

http://www.pogo.org/blog/2015/11/dod-pays-premium-for-gas-station-in-afghanistan.html