Lawmakers Take Aim at Iraq Contractor Fraud

Lofgren and Baird Introduce Bill to Hold War Profiteering Companies Accountable

Media Contact: Kyra Jennings, 202.225.3072, kyra.jennings@mail.house.gov

Representatives Zoe Lofgren (D-CA) and Brian Baird (D-WA) today introduced the Stop Fraud in Iraq Act, HR 5290, legislation that will protect U.S. taxpayers by ensuring that contractors in Iraq suspected of defrauding the government are being held accountable.

“We are not engaged in the Iraq war so that corporations could be free to rip off Iraqi money and property that the U.S. helps administer,” said Representative Lofgren. “U.S. companies like Halliburton, that do business and profit from the war in Iraq, should not be allowed to get away with fraud in their contracts without remedy. Our bill would bolster the False Claims Act to ensure that corporations may not engage in fraudulent war profiteering in Iraq.”

Baird and Lofgren’s bill will update the False Claims Act, a law that allows whistleblowers to sue government contractors suspected of fraud. The False Claims Act has been used to bring dozens of charges against Iraq contractors suspected of fraud, including Halliburton’s subsidiary, Kellogg Brown and Root. However, a loophole in the False Claims Act that allows the Administration to stall the process has prevented pending Iraq contractor fraud cases from moving forward.

“U.S. taxpayers have spent billions of dollars on the Iraq reconstruction effort,” said Representative Baird. “It is appalling and disgraceful that our government is looking the other way while companies like Halliburton defraud hardworking American taxpayers. Our bill will ensure corrupt companies are held accountable for war profiteering.”

Before a fraud case can proceed, the Administration must decide within 60 days whether or not it wants to be part of the prosecution. However, the Justice Department can request indefinite extensions, prolonging a decision and preventing the fraud cases from ever being resolved. By refusing to make a decision in these Iraq fraud cases, the Administration has also kept the cases sealed. As a result, the scope of suspected fraud in Iraq contracts remains unknown. Baird and Lofgren’s legislation would give the Administration only one six-month extension before it must decide whether or not to participate in legal action.

Baird and Lofgren’s bill would also update the False Claims Act to ensure it applies not only to reconstruction funding being appropriated by the U.S. government, but also funding being supplied by Iraq.

To date, $29 billion of U.S. taxpayer money has been appropriated to Iraq reconstruction efforts. And, the U.S. Inspector General for Iraq Reconstruction (SIGIR) has uncovered numerous instances of abuse in the expenditure of these appropriated Iraq reconstruction funds.

Baird and Lofgren worked together last year to secure an extension for Special Inspector General for Iraq Reconstruction (SIGIR) Stuart Bowen, who serves as a critical watchdog over the billions of U.S. dollars allocated for Iraq reconstruction programs.