Opinion: Editorials

Examiner Editorial: Waste and fraud cost feds hundreds of billions

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Photo - The House Committee on Oversight and Government Reform conducts the first hearing on incidents of wasteful spending by the General Services Administration, the real estate agency for federal buildings, on Capitol Hill in Washington, Monday, April 16, 2012. Being sworn in to testify, from left are, GSA Inspector General Brian Miller, former GSA Administrator Martha Johnson, Jeff Neely, former regional commissioner of the Public Buildings Service, Pacific Rim Region, GSA Chief of Staff Michael Robertson, and David Foley, deputy commissioner of the GSA Public Buildings Service.  (AP Photo/J. Scott Applewhite)
The House Committee on Oversight and Government Reform conducts the first hearing on incidents of wasteful spending by the General Services Administration, the real estate agency for federal buildings, on Capitol Hill in Washington, Monday, April 16, 2012. Being sworn in to testify, from left are, GSA Inspector General Brian Miller, former GSA Administrator Martha Johnson, Jeff Neely, former regional commissioner of the Public Buildings Service, Pacific Rim Region, GSA Chief of Staff Michael Robertson, and David Foley, deputy commissioner of the GSA Public Buildings Service. (AP Photo/J. Scott Applewhite)
Editorial,Secretary of Defense,Veterans Affairs,Federal Budget,Corruption,Analysis,Defense Spending,Pentagon,Waste and Fraud

Nobody knows with certainty how much is lost every year to waste and fraud in federal spending, but, with a $3.8 trillion budget and federal bureaucrats shoveling tax dollars out the door with little regard for the consequences, there can be no doubt that the total is hundreds of billions of dollars. Two reports by the Washington Examiner watchdog investigative reporting team provide significant new insights into how easy it is to rip off Uncle Sam.

First, watchdog data editor Luke Rosiak reported over the weekend that a previously unpublicized 2011 study by the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics found the Department of Defense paid $354 million to 11 companies even though they were among 30 firms to be prosecuted for criminally defrauding the government between 2007 and 2009. The study further discovered that the Pentagon paid nearly $5 billion to 35 of 91 firms against which it had obtained civil judgments during the same period.

How could this happen? Rosiak described the explanation provided by the authors of the DOD study this way: "The Pentagon's ability to research sanctions levied by DOD offices against contractors, and to monitor sanctioned contractors as they merge, acquire new names and become new companies, is as piecemeal and filled with guesswork as that of anyone trying to do such research from the outside, with limited integrated systems and unique identifiers." In other words, the Pentagon has no more tools than anybody else - and may actually have fewer than some outside the government - for tracking whether tax dollars are going to dishonest defense contractors.

Then there is the ease with which the laudable veterans preference is abused in government contracting by federal departments and agencies, as reported by senior watchdog reporter Mark Flatten in a five-part series starting Monday in the Examiner. Federal departments and agencies issue an estimated $12.3 billion annually in contracts to companies claiming to be principally owned and managed by disabled veterans of the U.S. military. But Flatten found that many of those billions actually end up going to companies linked to individuals who either falsely claim military service, or who are mere fronts for other companies that don't qualify for veterans preference contracts, according to Flatten.

Most Americans support the concept of the federal government giving contracting preference to men and women who suffered injury while serving under arms for this country. The problem is, as Flatten reports, hardly anybody in government is minding the store to make sure those billions of tax dollars go to genuinely deserving veterans instead of imposters or fraudsters: "Most federal agencies let businesses 'self certify' in a name-it-and-claim-it process that grants special treatment whenever an owner claims to be a service-disabled veteran and in control of a company." Government doesn't have to be this incompetent.

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