Special Inspector Condemns Government Contractor Fraud in Iraq Rebuilding Effort

March 14, 2013 — Military contractor fraud is a violation of the False Claims Act. Sometimes the fraud involves kickbacks. Other times, contractors bill for work not performed or overbill for the services they do perform. No matter the scheme, fraud costs American taxpayers billions of dollars.

Fraudulent schemes are often uncovered by accounting and billing personnel who notice that the books just do not tally up. Dishonest government contractors may pay off their own employees to remain silent or they may threaten people with the loss of employment. Employees may choose to notify the government rather than play a role in defrauding it.

Investigators Watching for Fraud in $90 Billion Afghanistan Rebuilding Plan

Ten years after the war in Iraq started, Stuart Bowen, the special inspector general for Iraq reconstruction, says in a final report that much of the work paid for by American taxpayers has been a failure, rife with fraud by American government contractors. Speaking on PBS Newshour, Bowen said that 82 U.S. contractors and government personnel have been convicted of fraudulent crimes in Iraq. The government has recovered over $191 million in those cases. U.S. Senator Susan Collins of Maine has expressed her outrage at the “appalling” level of waste and fraud in the U.S. funded Iraq-rebuilding effort. Taxpayers spent $60 billion, more than the U.S. has ever spent on relief and reconstruction for just one country.

Bowen explained that from the beginning, Iraq was a “free-fraud zone” in which, for example, the Bloom/Stein conspiracy uncovered in 2004 in Hillah, Babylon resulted in the conviction of a U.S. military colonel, three lieutenant colonels, Philip Bloom, a U.S. contractor with a prior felony conviction, and Robert Stein, a comptroller for the south-central region who controlled hundreds of millions of U.S. dollars. It wasn’t until later on in the war, Bowen said, that oversight on the ground became sufficient to discourage contractor fraud, though still not prevent it entirely.

Now the U.S. is investing $90 billion dollars to rebuild Afghanistan. Many of the auditors and investigators who worked for Bowen in Iraq have moved to overseeing that effort in Afghanistan.

Employee Informants Use False Claims Act to Combat Fraud

Fraudulent excesses by American contractors for the U.S. military result in a shameful waste of taxpayer dollars. Disclosures of contractor fraud often come from tipsters working for the unethical contractors. The federal False Claims Act allows an informant to file a lawsuit on behalf of the government and then keep a share of any proceeds. The anti-fraud law contains qui tam provisions to encourage and reward informants who are brave enough to tell the truth.

Tipsters deserve to understand their legal rights. The experienced lawyers at Waters & Kraus are here to answer your questions about becoming a whistleblower in a government contractor fraud case. Contact us or call our whistleblower attorneys at 855.784.0268 to learn about our qui tam practice and how we can protect and advance your interests.

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