Logjam of War Contractor Fraud Suits
A backlog of whistleblower lawsuits against military contractors has been swelling and festering since the early days of the so-called war on terror.
According to critics, the Department of Justice (DOJ) has blocked the progress of these lawsuits to spare the Bush administration a major political black eye should the truth about ongoing war profiteering be revealed, a charge the DOJ denies.
Under the False Claims Act, a civil war era law, when an employee of a company thinks they have evidence that their company is defrauding the US government, the individual can file a lawsuit on behalf of the government against the contractor by filing a special lawsuit called a qui tam - a Latin abbreviation for "he who sues in this matter for the king as for himself."
The exact number of qui tam cases stuck in legal limbo is unknown because the cases are kept under strict seal. But sources who have been following the issue closely estimate that there are between 50 and 70 Iraq contracting fraud cases under seal. Under normal circumstances, when the DOJ receives a qui tam case, it conducts an investigation into the whistleblower's claims. If there is sufficient evidence of significant fraud, the DOJ joins with the whistleblower to sue the company in question and recover the government's money. The whistleblower can receive up to 30 percent of money recovered as a reward for their service to the taxpayer.
Not a single qui tam case against war contractors has been joined by the Bush administration DOJ despite the possibility of recovering billions of dollars for the US taxpayer and reining in war profiteers, who continue to cheat and defraud the government and the US troops mired in battle.
"The money that's gone into waste, fraud and abuse under these contracts is just so outrageous, it's egregious," Congressman Henry Waxman (D- California) told the BBC, adding, "It may well turn out to be the largest war profiteering in history."
As chairman of the House Oversight and Government Reform Committee, Waxman and his team of investigators have been tracking mismanagement, waste and fraud in Iraq war contracting. His investigations have created a rough sketch of where US and Iraqi money has been stolen and wasted. The qui tam cases may provide the missing link: the voices of individual employees who can give first hand accounts of the profiteering.
According to qui tam investigator Dina Rasor, co-author of "Betraying Our Troops: The Destructive Result of Privatizing War," the wave of qui tam cases is coming, but will probably have to wait until the next administration.
"The investigations by Waxman and the Special Inspector General for Iraq Reconstruction have left breadcrumbs leading everywhere. Either qui tams have not been filed, which is not the case, or they have not yet come out," Rasor told Truthout.
Rasor's book documents numerous examples of fraud and negligence on the part of military contractors in the Iraq war theater. Rasor works directly with Iraq contracting fraud whistleblowers, but is prevented from discussing any aspect of the cases she is involved with because they remain under seal.
Critics charge that the DOJ is misusing its power to keep the qui tam cases sealed in order to prevent a massive and unprecedented level of war profiteering from becoming public.
The DOJ strongly rejects this claim. "There are cases being investigated. I have never heard of anything being blocked for political reasons. The people who are the day in and day out attorneys in the civil division are career employees and they do their job," Charles Miller, spokesman for the DOJ civil division told Truthout, adding, "I expect that the cases will move when the investigations are complete ... It has nothing to do with the administration."
A unique factor in qui tam suits is that even if the cases are unsuccessful or companies settle the lawsuits to avoid trial, the facts of the case are eventually made public. Therefore, the historical record on the most privatized military operation in US history has only begun to be written.
These qui tam cases must eventually be dealt with because the statute of limitations - the amount of time whistleblowers have to file their case - does not run out once the case has been filed. Whistleblowers have up to six years (if acting without DOJ backing) to file a qui tam case. This means that cases involving Iraq reconstruction fraud will continue to pile up for years after the last contractors leave the country.
A Delicate Political Dance
Whistleblowers and the lawyers who represent them in these qui tam cases are in a tough spot. On the one hand, they have a financial stake in the successful prosecution of the suit they file. In most cases, they need the US government to join with them to investigate the alleged fraud and to bring the case to court. Federal judges who hear these cases are unlikely to take the lawsuits seriously if the government - the party with the most money at stake - is not on board.
On the other hand, these lawyers and whistleblowers are the only people who know the severity and scope of the fraud cases they file. They are the only people outside the DOJ who can attest to the potential cover-up by the Bush administration.
This relationship between the whistleblower and the government has seemingly kept most lawyers involved with qui tam cases from speaking out against the DOJ blackout of Iraq contracting fraud suits for fear that doing so would endanger their cases.
However, an independently wealthy maverick lawyer from central Florida has taken the DOJ to task publicly. Alan Grayson, of Grayson and Kubli PC, a law group specializing in qui tam suits, has struck out on his own, to pursue contractor fraud cases without the help of the DOJ. Along the way, he has also become an outspoken critic of the DOJ who, in his view, is perpetrating a massive cover-up at the behest of the Bush administration and their allies in the military contracting industry.
"The war has been going on now for five years. [The DOJ] is not litigating a single case of contractor fraud against any contractor in Iraq. They have swept the whole thing under the rug," Grayson told Truthout, adding, "They're either stupid or they're liars and I tend to think it is the latter. We have an administration that is only good at managing news and nothing else."
Under normal circumstances, the DOJ decides to join or reject a qui tam case within 60 days. The vast majority of the pending Iraq fraud cases have remained under seal, with the DOJ refusing to join or reject the cases. In keeping the cases in limbo, the DOJ keeps the allegations and evidence away from public scrutiny.
A Lack of Resources?
Don Warren, of the Warren Benson law group, specializes in qui tam cases. He has knowledge of ongoing Iraq reconstruction fraud cases, but could not give details or quantify the total amount of money at stake in his cases.
Warren does not believe there is an overt conspiracy at work to keep the DOJ from joining whistleblowers in Iraq fraud cases. Instead, he sees the lack of fraud cases as more of an issue of underfunding and understaffing at the DOJ civil division.
"The resources have been dried up under this administration. The white collar civil fraud prosecutors are way understaffed, underpaid, and overworked. This administration has sucked dry the resources for the civil fraud prosecutors in DOJ," Warren said, adding, "The investigators sometimes don't have the budget to pay to make copies of documents, take depositions, travel to interview witnesses."
"The administration is protecting its donor base - big pharmaceutical companies, big defense contractors, and they don't care about the little guy, the tax payer," Warren said when asked why he thought the Bush administration would deliberately underfund white collar crime investigations.
"It doesn't make sense. Thirteen dollars is returned to the US treasury for every dollar spent on these prosecutions. It is the only government program that pays for itself 13 times over," he said.
"If I asked anyone in the department, they'd say they need more resources. Whether that is true or not I can't say for sure," DOJ spokesman Charles Miller said in response to questions about underfunding.