Bush administration backs down on fraud and abuse

Unable to defend pro-fraud contracting provision, the administration gives in.

Published April 15, 2008 8:16PM (EDT)

As a rule, Americans probably don't expect government officials to go out of their way to protect waste, fraud and abuse, but then again, the Bush administration includes a special group of people.

Earlier this year, the Justice Department proposed new rules requiring U.S. contractors to report any and all waste, fraud or abuse they run into while doing taxpayer-financed work. Shortly thereafter, someone in the administration -- it's still not altogether clear who -- added an exemption to the rules. Contractors would be required to report problems, but all contractors who do work overseas would be exempt. Given the more than $100 billion in such contracts in Iraq and Afghanistan over the past five years, the exemption didn't make any sense.

"This sends the message that if you're going to do waste, fraud and abuse, don't do it at home, do it abroad," Rep. Peter Welch, D-Vt., who called for an investigation, said. "This was slipped in at the last minute ... It's obviously something you can't justify in any way, and there's no answer to why you'd allow this to occur abroad any more than you'd allow it to occur domestically. There is a question as to how and why the change was made, and we don't know the answer."

For months, the White House remained mum, refusing to explain why the pro-fraud exemption was added, who added it, and what the Bush gang would do about it.

Today, the White House gave in.

Reversing itself after months of criticism, the administration closed the loophole that was quietly slipped last year into a proposed Justice Department crackdown on government contract fraud. [...]

Government policywriters said the original rule was drawn up quickly, and chided the Justice Department for not explicitly making sure that overseas contracts should be included in the crackdown. "It was only after publication of the proposed rule ... that DoJ and other respondents expressed concern about the overseas exemption," the draft states. [...]

A Bush administration official on Monday called the loophole "a drafting error" that happened when policywriters merely cut and pasted a 20-year-old Defense Department regulation into the contracting crackdown.

Yes. Of course. "Drafting errors" that benefit Blackwater and Halliburton subsidiaries work their way into policy regulations all the time. How embarrassing.

By Steve Benen

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