Government Fraud Recovery Bounces Back in 2016

THE PROJECT ON GOVERNMENT OVERSIGHT”
 
“It is  a substantial increase over last year’s total.

A large number of recoveries came from contract fraud cases involving some of Uncle Sam’s most prominent suppliers of goods and services.

The Justice Department announced on Wednesday it had recovered for taxpayers more than $4.7 billion through settlements and judgments from False Claims Act cases in fiscal year 2016. According to the announcement, it is the third highest annual recovery in False Claims Act history. It is also a substantial increase over last year’s total.

Of the $4.7 billion recovered, $2.5 billion came from health care fraud cases. An additional $1.7 billion came from settlements and judgments in cases alleging false claims in connection with federally insured residential mortgages.

• Boeing: $18 million to settle allegations that it overcharged the US Air Force for aircraft maintenance services at Boeing’s Long Beach, California, depot. (In 2014, Boeing paid $23 million for allegedly overcharging maintenance work at its depot in San Antonio, Texas.)
• Centerra Services International: $7.4 million to resolve a lawsuit accusing the company of overbilling the Army for firefighting services in the Middle East
• Computer Sciences Corporation: $1.35 million for billing the Defense Information Systems Agency for subcontract workers who lacked the required security clearances
• Deloitte Consulting LLP: $11.38 million to resolve overbilling claims on a General Services Administration contract
• DRS Technical Services: $1 million to settle charges that employees billed the Army for hours they did not work
• L-3 Communications: $25.6 million to settle claims of selling the government defective weapon sights
• Lockheed Martin: $5 million for allegedly misleading federal and state regulators about noncompliance with environmental regulations at the Paducah Gaseous Diffusion Plant in Kentucky
• SRA International: $1.1 million for alleged false billing on military contracts
• United Technologies: $11 million in penalties, interest, and disgorgement of profits for overcharging the Air Force for jet engines in the 1980s
• URS Corporation: $9 million to settle allegations that a subsidiary defrauded the government into awarding it construction contracts that it was not eligible to receive. In a different case, URS paid $580,000 for allegedly overbilling labor rates on a bridge reconstruction project.

The False Claims Act is the government’s primary tool to redress fraud in the areas of health care, defense and national security, food safety and inspection, federally insured loans and mortgages, highway funds, small business contracts, agricultural subsidies, disaster assistance, and import tariffs.

In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to come forward with allegations of fraud. Most false claims actions are filed by whistleblowers in qui tam lawsuits. Since 1986, the government has recovered slightly over $53 billion, awarding more than $6.3 billion of that to the whistleblowers who filed the lawsuits—often at great risk to their careers.

On the same day the Justice Department announced its annual fraud recoveries, it also announced it had collected nearly $15.4 billion in civil and criminal cases in FY 2016, one-third less than last year’s total. This amount includes recoveries in all civil and criminal enforcement cases (including those involving the False Claims Act), fines imposed on individuals and corporations for violations of federal financial, health, safety, civil rights, and environmental laws, and collected debts owed to the federal government.

How will the False Claims Act fare under the Trump administration? At least one expert foresees very little change.

Taxpayers Against Fraud acting president Patrick Burns recently observed that Senator Jeff Sessions (R-AL), President-elect Trump’s choice for Attorney General, “has never winked at companies that harm American workers and consumers” and “understand[s] the value of whistleblowers and whistleblower laws when it comes to fighting corporate theft and crony capitalism.” He noted that Sessions has supported strengthening the False Claims Act and has a good relationship with Senator Chuck Grassley (R-IA), the law’s key champion in the Senate.

Burns’ prediction gives us hope that active enforcement of the False Claims Act—and billions of dollars in annual recoveries—will continue for years to come.”

http://www.pogo.org/blog/2016/12/federal-fraud-recoveries-fy-2016.html

PENTAGON "STAR CREEP" AND THE "REVOLVING DOOR"

GOVERNMENT SPENDING WASTE

How Does the US Stop the Dramatic Cost to the Tax Payer From Pentagon
"Star Creep"
And
"The Revolving Door”
Between Industry and Government Executives?

STAR CREEP

POGO, the venerable, apolitical non-profit has coined, "STAR CREEP" the monumental increases in general officers in the Military:

" Between May and September, more than 10,000 enlisted personnel were cut by the DoD, possibly in preparation for the end of military operations in Iraq, while more than 2,500 officers were added.

Consequently, for the first time in the more than 200 years that the U.S. has had a standing military, there are fewer than five enlisted personnel for every officer. In other words, today’s military is the most top-heavy force in U.S. history.

But the cost of Star Creep only begins with direct compensation. Other costs that surround generals and admirals—such as staff, contractors, and travel—increase with higher ranks. For example, Bloomberg recently reported that taxpayers in Huntsville, Alabama, footed a $3.8-million bill to build luxurious homes for generals in a successful effort to keep Pentagon pork flowing into the area. One such home, built for a major general, was a sprawling 4,200-square-foot mansion that included granite counter tops, hardwood floors, and stainless steel appliances."

Former Secretary of Defense Gates remarks on this issue per POGO:

"In his August 2010 speech on Efficiency Initiatives, Gates referred to these perks as “the overhead and accoutrements that go with” senior positions, be they military or civilian, within DoD. In an interview with Newsweek, Gates bemoaned these accoutrements and entourages that surround generals and admirals, which he believes are indicative of a military leadership that is “suffering from an inflated sense of entitlement and a distorted sense of priorities"

http://pogoblog.typepad.com/pogo/2011/11/todays-military-the-most-top-heavy-force-in-us-history.html

THE REVOLVING DOOR

The Federal Acquisition Regulation, Section 3.1 sets out definitions of standards of conduct and conflict of interest. It details restrictions on dialogue regarding employment with officials prior their leaving their government jobs and further restricts where an official may work in industry and in what capacities relative to prior government service.

Penalties for violating these rules range from criminal prosecution for government and industry personnel found guilty of violations, to debarment of companies and individuals from government contracting.

POGO has announced: "Two Former Watchdogs Ring in the New Year on the Other Side of the Revolving Door":

http://pogoblog.typepad.com/pogo/2012/01/two-former-watchdogs-ring-in-the-new-year-on-the-other-side-of-the-revolving-door.html

“The first revolver is Michael Thibault, former co-chairman and commissioner of the Commission on Wartime Contracting in Iraq and Afghanistan (CWC) who recently joined DynCorp, one of the three primary LOGCAP IV contractors, and currently the 32nd largest contractor in POGO’s Federal Contractor Misconduct Database. It has nine instances of misconduct since the early 2000s and $19.6 million in penalties. The second revolver is Gordon Heddell, who resigned as the Pentagon’s Inspector General on Christmas Eve. The text of Heddell’s farewell email message is posted below. POGO has learned that Heddell also landed a job with a top-tier federal contractor, the global consulting firm Booz Allen Hamilton. Booz Allen, the 29th largest contractor in POGO’s database, has two misconduct instances and $3.7 million in penalties. Although it has a relatively blemish-free history, it should be noted that Booz Allen derives a substantial amount of business from contracts with the Defense Department. Booz Allen confirmed with POGO that Heddell was hired last month as a Senior Executive Advisor."

Are these companies and individuals exempt from public law?

VETERAN TONY ROSE NOW HAS US CITIZENSHIP

After a nearly 4 year battle with the Departments of Immigration, Homeland Security and Social Security, the US Government has conceded that Mr. Anthony Aldo Rose who served in the US Navy during the Vietnam Era and worked in this country for 40 years, in fact never left the country, is an American citizen and can draw his Social Security Pension.You may recall his story as covered by the Pioneer Press and the Hastings Gazette last year. The blog on his struggles with the Feds is at:

http://rosecoveredglasses.blogspot.com/2007/11/help-for-us-navy-vet-without-country.html

Our thanks to Pro Bono Lawyer Stella Mednick, who we met through "Linked In", for her untiring efforts on Tony's behalf.

Below is the link to the St. Paul Pioneer Press coverage of the Citizenship Ceremony:

http://www.twincities.com/localnews/ci_13828521?nclick_check=1

SAIC Case Sheds Needed Light on World of Government Contracting

By Steven Pearlstein

Friday, July 10, 2009
Washington Post

Science Applications International Corp. is not only one of the federal government's largest contractors -- with more 17,000 Washington area employees, it is the region's fourth-largest private employer. So it is of more than passing interest that after a lengthy investigation, the Justice Department has now accused company executives of conspiring with corrupt Navy officials to rig a 2004 computer contract potentially worth billions of dollars.

Last week the Justice Department asked a federal judge in Jackson, Miss., to order the company to pay damages that could top $350 million -- a lot of money for a company that earned $450 million last year. A judgment might also lead the government to temporarily suspend SAIC from competing for new contracts.

See Above link to read more.

FEDERAL GOVERNMENT BECOMING MORE TRANPARANT ON WASTE, FRAUD AND ABUSE CASES

As recently announced by the Project on Government Oversight (POGO) Congress and President Bush have mandated a federally maintained database on waste, fraud and abuse cases by government contractors. The purpose of the record is to inform government contracting officers, source selection boards and buyers regarding details on past performance of a negative nature in this area that can weigh in future contract awards.

http://www.pogo.org/p/contracts/ca-081015-fcmd.html

Since the government database will not be visible to the public, POGO continues to publish this information from public records and has for many years as a non-profit organization. POGO has also pressed the government to assume responsibility for the information. That effort has now succeeded.

We applaud POGO's success.

http://www.pogo.org/p/x/aboutus.html

POGO has published its most recent records at its web site:

http://contractormisconduct.org/

The top 100 government contractor track records are shown as well as others. As POGO states in the analysis at its site, it should be noted that the most serious offenders continue to receive contracts from the very agencies that have prosecuted them for fraudulent activities.

POGO also points out that many of the top 100 contractors have no apparent instances of a negative nature or very few. It is possible to be a major player in the industry without resorting to waste, fraud and abuse.

The above table is POGO's latest data from public records on the top 100 federal government contractors. If you are interested in the details of these cases, go to the POGO site and click on the name of the company. A convenient summation of the government cases against the firm will appear.

TWO COLLAPSING TOWERS - WALL STREET AND THE MILITARY INDUSTRIAL COMPLEX

While we observe Wall Street go through an implosion and our lawmakers mortgage the future of America with the associated bailout, let us keep an eye on another adjacent and related tower with a weak foundation, teetering dangerously in the wind. The Military Industrial Complex (MIC) is also subject to bad decision-making by misinformed and manipulated government officials.

HISTORY

Congress has just funded the MIC at only slightly less than the 700B now necessary to bail out the US Financial catastrophe. The MIC is monumentally dangerous and has led our country into a continuing series of costly, fraudulent wars since Korea. Eisenhower forecasted the danger in his departing speech:

http://www.youtube.com/watch?v=8y06NSBBRtY

The most recent MIC adventure is being fought in the memory of 3,000 dead civilians attacked by a terrorist the US created by not leaving the Middle East after the first Gulf War. That excursion has killed thousands of our finest youth and maimed the lives of countless others. The average American will pay for this ruin in decades to come through taxes supporting hospital care, social services and veteran's homes.

HOW DO I KNOW?

I am a 2 tour Vietnam Veteran who recently retired after 36 misguided years working in the defense industrial complex on many of the weapons systems being used by our forces as we speak. Given a clearly defined mission and the best armaments and systems in the world, I believed that another Vietnam could be avoided for the American Soldier.

I was wrong.

I live in a Veteran's home, having recently undergone treatment through the VA for PTSD and Depression, long overdue some 40 years after the Tet Offensive that cap stoned my military 2nd tour in Southeast Asia with a lifetime of illness:

http://rosecoveredglasses.blogspot.com/2006/11/odyssey-of-armaments.html

Politicians make no difference. I saw this on a daily basis from inside the MIC.

The chart at this posting illustrates the historical % of our national debt to our GDP. That % is on a precipitous rise with the current US warfare mentality and imminent Wall Street bailout:

PLEASE CLICK ON IMAGES OR DOWNLOAD TO ENLARGE

Other countries will not tolerate our on-going presence, decreasing value on world market and shortsighted vision, based exclusively on stockholder profits. The Wall Street financial tower has fallen. The MIC will be next.

ABOUT THE MILITARY INDUSTRIAL COMPLEX

It is corrupt and driven by corporate influence:

http://www.playboy.com/magazine/features/lockheed/index.html

http://www.vanityfair.com/politics/features/2007/03/spyagency200703

http://www.vanityfair.com/politics/features/2007/11/halliburton200711

It is broken and riddled with incompetence:

http://rosecoveredglasses.blogspot.com/2008/04/us-federal-government-procurement.html

http://rosecoveredglasses.blogspot.com/2007/01/what-american-public-must-know-about.html

THE COLLAPSE

The MIC, like Wall Street, will go bust and then be re-scaled, fixed and re-designed to run efficiently and prudently, just like any other big machine that runs poorly or becomes obsolete or dangerous. The situation will right itself through yet another trauma.

A government ENRON is on the horizon, with an associated house cleaning. The next president will come and go along with his appointees and politicos. They will try to fix the financial mess and become pawns of corporate America in widening our military influence attempting to mend corporate bank accounts. But the MIC tower will implode as well - the next big event in government you will watch is the collapse of that establishment.

HOPE

Non-profit visionaries and small business know the course that must be taken and they are taking it:

http://techinsider.nextgov.com/2008/04/einstein.php

These "Action People" are not in our government. They are more practical than that. They are the communicators, the true venture capitalists setting up worldwide non-profit foundations (Gates and Buffet for example). They are like the Bill Moyers, perpetually exposing waste fraud and abuse and then going one step further to fix it from the inside. They are the young inspirational members of the small business base in this country that will be tasked with picking up the pieces and re-inventing the future so our government can follow along.

As a volunteer counselor, handling 30 cases a week through SCORE I see every form of unique small business inventiveness imaginable - efficiently created, using technology to the max and not seeking financing to the hilt - only the opportunity to succeed:

http://www.smalltofeds.blogspot.com/

http://www.score.org/


The US GDP is still the largest in the world.

Our high technology cannot be matched.

We have enough weapons systems and science to beat all our competitors and solve our problems.

We need to come home.