Lofgren and Baird Pass Anti-War Profiteering Amendment

Provision to Hold War Profiteering Companies Accountable Added to Appropriations Bill

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

Reps. Zoe Lofgren (D-CA) and Brian Baird (D-WA) efforts to ensure contractors in Iraq suspected of defrauding the government are being held accountable met with success when this amendment was incorporated into the Fiscal Year 2007 Science, State, Justice, Commerce (SSJC) bill that passed the House and will now go to the Senate for approval.

“The Iraq war should not provide an opportunity for corporations to 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. This amendment will bolster the False Claims Act to ensure that corporations may not engage in fraudulent war profiteering in Iraq, and I am pleased that the importance of this issue was recognized by this Congress.”

The Baird/Lofgren amendment will update the False Claims Act, a law that allows whistleblowers to sue government contractors suspected of defrauding the government. An estimated 50 cases have been brought under the False Claims Act against Iraq contractors, including firms like 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. As a result, some of these contractor fraud cases have been pending for more than two years.

Before a fraud case can proceed, the Administration must decide within 60 days whether or not it wants to help try the case. However, the Justice Department can request indefinite extensions, prolonging a decision and preventing the fraud cases from ever being resolved. The Bush Administration has used this loophole to ban action against corporations accused of fraud. 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 officially, but has been reported by news organizations to be extensive. The Baird/Lofgren amendment would give the Administration only one six-month extension before it must decide whether or not to participate in the legal case. If no decision is made by the Administration within the six-month period, the case will be allowed to move forward.

Reps. Lofgren and Baird originally introduced this anti-war profiteering provision in early May as stand-alone legislation (H.R. 5290, the Stop Fraud in Iraq Act). Lofgren and Baird worked together last year to secure an extension for the 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.