Following a Committee hearing into abuses in the $24 billion Deepwater contract, the Coast Guard announced it was transferring control over the contract from private contractors to the Coast Guard and initiating proceedings to recoup some of the taxpayer funds used to build defective ships.
Chairman Waxman asks Secretary Rice to investigate persistent allegations of corruption that have slowed the recovery of the Iraqi oil industry.
As part of the Committee’s ongoing investigation into waste, fraud, and abuse in federal contracting, the Committee has requested information on a $140,000 contract awarded by the Executive Office of the President to MZM, Inc. in July 2002.
The public justification for public financing, including construction financing with tax exempt bonds, is that this is an investment that brings jobs and consumers to a city’s downtown. Academic research on the value to economic development, however, has universally concluded that sports stadiums, convention centers and hotels do not increase economic activity in downtown areas.
On March 15, 2007, the House passed H.R. 1362, the “Accountability in Contracting Act," by a vote of 347-73. The legislation, reported by the Oversight and Armed Services Committees, would change federal acquisition law to require agencies to limit the use of abuse-prone contracts, to increase transparency and accountability in federal contracting, and to protect the integrity of the acquisition workforce.
Chairman Waxman introduced two bills to increase government transparency and encourage the discovery of waste, fraud, and abuse of taxpayer money. The hearing provided an opportunity for the Committee to focus on the issues of lobbying and ethics reform in the executive branch.
The goal of the hearing is to examine whether there are fraudulent, abusive, or wasteful pharmaceutical pricing practices that affect federal health programs such as Medicaid, Medicare, and the Public Health Service “340B” program that should be the subject of additional congressional oversight.
The hearing focused on the Department of Homeland Security’s management of large contracts that rely on private contractors as “system integrators.” The Committee focused on two examples of multi-billion dollar contracts: the Deepwater program to develop new ships for the Coast Guard and the Secure Border Initiative to integrate technology and personnel to defend the nation’s borders.
Family members of four Blackwater employees killed in Fallujah testified about what they view as profiteering by Blackwater USA, including the company’s alleged failure to provide armored vehicles and other critical safety equipment. The Committee examined the costs of Blackwater’s security operations to the taxpayer and the adequacy of federal oversight of Blackwater and other security contractors.
Ambassador L. Paul Bremer and Stuart Bowen, the Special Inspector General for Iraq Reconstruction, testified on management of U.S. funds in Iraq. Questions were raised about an audit report issued in 2005 by Mr. Bowen that concluded that more than $8.8 billion in cash was disbursed without adequate financial controls.
From February 6-9, the Oversight Committee will hold four hearings on waste, fraud, and abuse of taxpayer dollars. The hearings focus on Iraqi reconstruction, Homeland Security contracting, and prescription drug pricing.
The history of the Bush Administration’s handling of federal contracts and other expenditures is one of persistent and costly mismanagement. It's Your Money, presented by Representative Henry A. Waxman, features specific examples of government waste, fraud, and abuse.
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