- The Washington Times - Wednesday, February 2, 2011

Sen. Bernard Sanders says the Defense Department paid $285 billion over a three-year span to hundreds of military contractors who defrauded the Pentagon during the same period.

But because of disagreements regarding the definition of “fraud,” the Vermont independent’s conclusions may differ from those of many Pentagon agencies.

Mr. Sanders — citing a new Defense Department report prepared for him — said the Pentagon spent about $270 billion from 2007 to 2009 on 91 contractors involved in civil fraud cases that resulted in judgments of more than $1 million.

Another $682 million went to 30 contractors convicted of “hard core” criminal fraud in the same three-year period, he said. Billions of additional dollars went to firms that had been suspended or barred by the Pentagon for misusing taxpayer dollars.

“With the country running a $14 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money,” Mr. Sanders said. “The sad truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money.”

A Sanders provision in a defense-spending bill required the report and directed the Defense Department to recommend ways to punish fraudulent contractors.

“It is clear that DOD’s current approach is not working and we need far more vigorous enforcement to protect taxpayers from massive fraud,” said Mr. Sanders, who is considered one of the most liberal members of Congress.

But the authors of the 45-page documentation, titled “Report to Congress on Contracting Fraud,” said that because there is no central repository for contracting data, the department faced a “number of challenges” drafting the report — “first and foremost was the development of a common definition of ‘procurement fraud.’” Each of the Pentagon’s several criminal investigative bodies differs on how it classifies fraud in its database.

The Pentagon said it has taken several steps to “improve awareness and safeguard with regard to contractor fraud.”

“In addition to the criminal, civil penalties and sanctions imposed by the courts, [the department] has numerous contractual and administrative remedies available, including suspension and debarment, when it is determined that it is not in the department’s best business interests to contract with a particular company,” said Defense Department spokeswoman Cheryl Irwin.

Ms. Irwin added that during the past three years the Pentagon’s Panel on Contracting Integrity “has worked to reduce the department’s vulnerability to waste, fraud and abuse.”

But Mr. Sanders complained that the Pentagon, in its report, said its “existing remedies with respect to contractor wrongdoing are sufficient.”

Mr. Sanders‘ stopped short of calling for further action and hasn’t demanded the contractors return the money. His office said the senator was awaiting more information from the Pentagon.

In the past, some lawmakers have gone so far as to call for private firms to be denied federal contracts if they have violated laws such as those against hiring illegal immigrants.

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