Salon Radio: Rep. Alan Grayson on de-funding corrupt defense contractors

Congress just unintentionally enacted a bill de-funding America's 10 largest defense contractors.

Published September 23, 2009 2:24PM (EDT)

[updated below - Update II (w/transcript)]

Rep. Alan Grayson (D-Fla.) -- my guest on Salon Radio today -- yesterday pointed out that the bill passed by both the Senate and House to de-fund ACORN is written so broadly that it literally compels the de-funding not only of that group, but also the de-funding of, and denial of all government contracts to, any corporation that "has filed a fraudulent form with any Federal or State regulatory agency."  By definition, that includes virtually every large defense contractor, which -- unlike ACORN -- has actually been found guilty of fraud.  As The Huffington Post's Ryan Grim put it:  "the bill could plausibly defund the entire military-industrial complex.  Whoops."

I spoke with Rep. Grayson this morning regarding the consequences of all of this.  He is currently compiling a list of all defense contractors encompassed by this language in order to send to administration officials (and has asked for help from the public in compiling that list, here).  The President is required by the Constitution to "faithfully execute" the law, which should mean that no more contracts can be awarded to any companies on that list, which happens to include the ten largest defense contractors in America.  Before being elected to Congress, Grayson worked extensively on uncovering and combating defense contractor fraud in Iraq, and I asked him to put into context ACORN's impact on the American taxpayer versus these corrupt defense contractors.  His reply:  "The amount of money that ACORN has received in the past 20 years altogether is roughly equal to what the taxpayer paid to Halliburton each day during the war in Iraq."

The irony of all of this is that the Congress is attempting to accomplish an unconstitutional act:  singling out and punishing ACORN, which is clearly a "bill of attainder" that the Constitution explicitly prohibits -- i.e., an act aimed at punishing a single party without a trial.  The only way to overcome that problem is by pretending that the de-funding of ACORN is really about a general policy judgment (that no corrupt organizations should receive federal funding).  But the broader they make the law in order to avoid the Constitutional problem, the more it encompasses the large corrupt corporations that own the Congress (and whom they obviously don't want to de-fund).  The narrower they make it in order to include only ACORN, the more blatantly unconstitutional it is.  Now that they have embraced this general principle that no corrupt organizations should receive federal funding, how is anyone going to justify applying that only to ACORN while continuing to fund the corporations whose fraud and corruption is vastly greater (not to mention established by actual courts of law)?

My discussion with Rep. Grayson is roughly 10 minutes long and can be heard by clicking PLAY on the recorder below.  A transcript will be posted later today.

* * * * *

On a different note, the so-called "new state secrets policy" which the Obama DOJ is set to unveil is such a self-evident farce -- such an obvious replica of all the abuses that characterized the Bush/Cheney use of that privilege which Obama himself has spent the last eight months embracing -- that I couldn't even bring myself to write about it.  It would not have altered a single one of the controverisal uses and is a complete non-sequitur to the objections raised to its abuses (including, once upon a time, by Obama himself).  Fortunately, both Emptywheel and The American Prospect's Adam Serwer laid out all of the reasons why this is so.


UPDATE:  I'm well aware that it's unlikely there will be a mass and immediate de-funding of America's largest defense contractors as a result of this bill, so there's no need to write comments explaining that to me.  That's not the point of all of this; the point is this.


UPDATE II:  The transcript is now posted here.

Glenn Greenwald: My guest today is Congressman Alan Grayson, the Democratic who represents Florida's Eighth Congressional District, and we're here to talk about a recent bill passed by the House of Representatives and the Senate which was intended to defund the group ACORN. And Congressman, you discovered that there was a potential consequence in this bill that was probably not intended by the bill's sponsors. Can you talk about what it is that you discovered and how that happened?

Alan Grayson: Well, I wouldn't go that far, but I will say that it is true that 10 out of the 10 biggest defense contractors have been convicted of fraud at one time or another in the past few years, and ACORN hasn't, it's difficult to frame any bill, whatever one's intent, to punish ACORN and keep ACORN from being funded by fed contracts, without a lot of what the Republicans would consider to be collateral damage, and that's exactly what we saw in this bill. This bill, taken literally, at its words, actually forbids and prohibits fed funding of virtually every large defense contractor in America.

And that's a result that comes from the fact that virtually every large defense contractor in America is crooked, and has been found guilty of fraud at one time or another.

GG: Well I guess the question that obviously arises is, given that the debate over this bill was clearly about ACORN, why couldn't the bill just have simply said we will defund ACORN, and left it at that? Why was it necessary to include this broader language that encompasses potentially other corporations?

AG: Well, because we're still a nation of laws, and one of our laws is the Constitution. The Constitution specifically prohibits bills of attainder; bills of attainder are actions by Congress that are directed toward one individual or one organization. And the reason for that is that Congress is a law-making body, not a judicial body. We don't actually decide guilt or innocence; we don't decide liability, and therefore the Constitution understandably forbids a law that singles out ACORN or any other organization for punishment.

GG: So is it fair to say there's a little bit of a dilemma here, in that the more the bill is narrowed, the more the danger is that the bill will be unconstitutional as a bill of attainder aimed at ACORN, but the more it's generalized and expanded, the more it could encompass corporations that as you say are an important part of the military-defense industry, that the bill's sponsors might not have intended to be included? How that can be resolved, if it can be?

AG: Well, the fact is we're only talking about the crooked one, and it's unfortunate but true that crookedness is pervasive in the defense industry. I know this first-hand, because I prosecuted war profiteers in Iraq before I was elected to Congress. And it is very difficult to tailor a bill of general applicability that's not targeted at one organization but targeted towards organizations that commit this conduct, and somehow leave out the entire defense industry, because fraud in the defense industry is rife.

So this is a situation where any effort to create a bill that will generally punish misconduct, and deny funds to companies that commit misconduct, is necessarily going to hit defense contractors, and I think that's great.

GG: Let me ask you about that. As you say, before you got to Congress, one of the things you were known for was working on fraud and abuse among contractors in Iraq. Can you put, in terms of the cost to the taxpayer of funding ACORN versus, say, the waste and abuse that comes from fraud on the part of military and defense contractors in Iraq, and you're also working as well on issues involving the Fed and Wall St. and the fraud that has taken place there. Can you put ACORN in context, in terms of the impact on the taxpayer?

AG: Well, sure. The amount of money that ACORN received in the past 20 years, all together, is roughly equal to what the taxpayer paid to Halliburton each day, during the war in Iraq.

GG: And that's obviously true for lots of other corporations as well. So what's the current status of the bill? Is it possible that it could be enacted, even given the potential impact that it might have on these huge defense contracts, which a majority of your colleagues don't seem inclined to want to defund?

AG: Well, it's passed. The barn door has been opened, and the horses and the cows have both left. It's done. It's passed; there's nothing they can do. There's not take-backs in legislation; that's not the way it works. And if they were sloppy in writing up this bill, then maybe they should have read the bill before they went ahead and tried to ram it through the House. Read their own bill, for a change.

GG: Right. Now, one of the things that you've done, and you've asked I guess an independent group to identify contractors and other defense corporations that would be encompassed by the literal language of the bill, and you've also asked the public to help. Can you talk about those efforts, and what that's produced so far? How many companies are we talking about, and what are some examples that would be included?

AG: We've gotten dozens and dozens of examples from both the public and from the Project On Government Oversight that actually document specific cases where large contractors, particularly defense contractors, actually have been found guilty of fraud, and these companies have not been defunded yet. The big debate in the case of ACORN is whether a company or a series of entities, some of which have been under legal scrutiny, should be defunded, but time after time after time throughout the entire defense industry we have companies that are found guilty of making false statements to the government, submitting false records to the government, submitting false claims for payment to the government, over and over and over again, and as I said before, we're talking about 10 of the top 10 defense contractors. And these have all been identified for us; we have documentation courtesy of the group mind that is in fact the Internet. We've reached out to people across the Internet saying, give us documentation that shows that these defense contractors not only have been suspected of this activity, but actually found guilty of it.

GG: Right.

AG: And we've received dozens and dozens of examples of this already, including all 10 of the top 10 defense contractors.

GG: Okay, last question. Can you just talk about, since you're obviously as familiar as anybody, a couple of examples of the large defense contractors that have been found guilty, and what it is that they've been found guilty of doing?

AG: Well, the most serious of them is simply overcharging. We've all heard about the stories of $600 toilet seats, and the $800 screwdrivers. So, over and over again, defense contractors have been charged with and found guilty of overcharging the government. And every time they submit a claim for payment to the government, they're doing exactly what the bill forbids, which is to submit a form to the government that is somehow fraudulent. So, there have been many other types of cases, everything from product substitution where the government says we want A and you submit to the government B and S for payment, all the way up to extreme and gross negligence like Halliburton putting in showers in Iraq that end up electrocuting soldiers, and feeding them poisoned water. So there's no shortage of examples of this. But the most common that we're all familiar with is simply this gross overcharging that ends up cheating the taxpayers and the troops. And there's countless examples of that all through the defense industry.

GG: I know I said last question, but I just have one more quick question, which is, as you say, this bill is passed. If you read the bill, it would certainly seem to compel defunding of many of these contractors, so what now is the mechanism to enforce the law, and to have these contractors encompassed by the bill actually defunded?

AG: Well, we are submitting legislative history this week that will identify exact what that process is. I have to thank chair Issa for giving a thumbnail sketch of that in the bill itself; the bill itself indicates that the Federal Acquisition Regulation, the regulation governing contractors, will be amended as a result of this bill, and we're going to spell out exactly, with specificity, what parts of the Federal Acquisition Regulation should be amended, and how they should be amended. So we're going to give the administration a road map to implement this process, which essentially is going to once and for all get rid of the defense contractors who think that committing $10 million worth of fraud against the taxpayers and hurting the troops is simply the cost of doing business. They are out of it. And that's one of the best things that could happen, whatever the intentions of chairman Issa, or anybody else on the other side, might have been.

GG: Right. Well, let's hope the bill is actually applied in terms of how the language of the bill calls for it to be applied. We'll certainly continue to follow these efforts and I appreciate your taking the time to talk to me. Thanks very much.

AG: My pleasure. It's really not asking so much that defense contractors, that government contractors, the people who end up with tax money are honest. And that's exactly what this bill will end up requiring, whether that is intended or not. And I think that's a great thing.

GG: It's hard to justify how ACORN should be defunded for thing of which it's been accused, and other contractors continue to be funded for things of which they've actually been found guilty, convicted.

AG: Exactly. And the answer to those who complain about it is very simple. Be honest. Behave yourself. Don't cheat people - you'll have no problems.

GG: Thanks very much Congressman.

AG: Thank you.


[Transcript courtesy of Thames Valley Transcribe]

By Glenn Greenwald

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