Washington, D.C. -- In testimony to a House Judiciary Subcommittee hearing today on his War Profiteering Prevention Act, U.S. Representative Neil Abercrombie pointed out that the Bush Administration has outsourced the war in Iraq like no other in history, spending more than $50 billion on private contractors to provide food, water, gasoline and other supplies, guard bases, drive trucks and many other activities in support of the military.

“The problem is,” said Abercrombie, Chairman of the Armed Services Subcommittee on Air and Land Forces, “that U.S. occupation of Iraq has been viewed by some of these contractors as ‘open season’ on the American taxpayer. At least ten companies, with billions of dollars in contracts, have already been forced to pay more than $300 million in penalties to resolve allegations of bid rigging, fraud, gross overcharging, delivery of faulty military parts and environmental damage.  Some of these same companies have faced such allegations during past military operations in other countries, but still received new contracts in Iraq.

• “I introduced the War Profiteering Prevention Act because anti-fraud laws that protect against the waste or theft of U.S. tax dollars in the United States do not apply to American companies overseas,”  Abercrombie said.
• One contractor was found guilty of 37 counts of fraud, including false billing, and was ordered to pay more than $10-million in damages.  However, the decision was subsequently overturned because U.S. laws against fraud did not apply.
• Despite millions of dollars in payments to U.S. companies, Iraqi power plants, telephone exchanges, and sewage and sanitation systems have either not been repaired, or have been fixed so poorly that they still don't function.
• A large U.S. construction company was paid tens of millions to repair Iraqi schools. Many of the schools were never touched, and several that  were “repaired” were left in shambles; one filled with unflushed sewage.
• According to testimony before the House Appropriations Defense Subcommittee, when the wrong computer equipment arrived in Iraq, the contractor dumped it into a mammoth “burn pit” and placed an order for a replacement rather than sending it back.  The government paid for both the wrong computer and the replacement, and the contractor collected a fee for each, thanks to a cost-plus contract.
• One contractor had drivers driving empty trucks between bases in Iraq — unnecessarily exposing drivers to danger — because the company was paid by the trip, not by the amount of materiel hauled or a flat fee.
• $186 million was spent over two years to build 142 health care centers. Yet, only 15 were completed and only eight are open.  According to testimony, the contractor lacked qualified engineers, hired incompetent subcontractors, failed to supervise construction work and failed to enforce quality control.

1. Abercrombie’s War Profiteering Prevention Act of 2007, would:
   1. Criminalize “war profiteering,” defined as bid rigging, contract fraud or overcharging for goods and services during a time of war, military action or a reconstruction effort.
   2. Violations of the law would be a felony, and punishable by up to 20 years in prison and fines of up top $1 million or twice the illegal profits of the crime.
   3. Jurisdiction for such cases, no matter where the alleged  crimes are committed, would be in United States Federal Court.

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