Defense Contractor Fraud

The Senate Thursday night passed an amendment by Senator Bernie Sanders that would require the Department of Defense to calculate how much the Pentagon pays companies that committed fraud. The measure, added to a defense appropriations bill, also would make the Pentagon recommend how to penalize contractors that repeatedly cheat the government out of hundreds of millions of dollars. Sanders contrasted the sweeping scope of defense contractor fraud to misdeeds by a few employees of the Association of Community Organizations for Reform Now.

The videotaped workers were fired for what Sanders called “an outrageous and absurd discussion with actors.” The sledge-hammer response in the House of Representatives and the Senate was to cut off federal funds for ACORN.

“Virtually every major defense contractor in this country has been engaged in systemic, illegal, and fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money.  We’re not talking here about the $53 million that ACORN received over 15 years.  We’re in fact talking about defense contractors who have received many, many billions in defense contracts and year after year, time after time, violated the law, ripping off the taxpayers of this country big time,” Sanders said.

According to the nonpartisan Project on Government Oversight, the three largest government contractors – Lockheed Martin, Boeing, and Northrop Grumman – all have a history riddled with fraud and other illegal behavior.  Altogether, the three companies engaged in 109 instances of misconduct since 1995, and were fined $2.9 billion.  How were they punished?  In one year alone, the big-three pocketed $77 billion in government contracts in 2007.

With a $12 trillion national debt and the biggest budget deficit in history, Sanders said, “Taxpayers want to know that the money we spend – whether it is for defense, housing, education, or any other purpose – is spent as wisely and as cost-effectively as possible.  They also want to know that the corporations and institutions and individuals who receive this funding are honest and trustworthy.”

To read the senator’s floor statement and for a copy of the amendment, click here

To watch his Senate floor statement, click here.