Study: Hundreds Of Fraudulent Defense Contractors Are Still Getting Contracts

This reports comes out while members of the congressional supercommittee are pissing and moaning about how we can't possibly cut any more money from the Defense department. These numbers seem to indicate otherwise:

How often does the Pentagon award contracts to defense companies that have already been proven to be defrauding taxpayers? A report the Department of Defense did at the request of Senator Bernie Sanders (I-VT) reveals an answer that should make Washington very uncomfortable.

The report, released today, showed that hundreds of defense contractors found guilty of civil fraud received more than $1.1 trillion in defense contracts since 2001. The study took into account only companies that were found to have defrauded taxpayers of more than $1 million dollars.

More than $573 billion went directly to companies that were guilty of defrauding taxpayers, and when you factor in the awards that went to the parent companies of those contractors, the total is $1.1 trillion. Of that $573 billion, more than two-thirds—$398 billion—went to companies after they had been found guilty of fraud.

Companies convicted of “hard-core criminal fraud” received $255 million in contracts, $33 million of it after conviction.

Some of the country’s biggest defense contractors were implicated. “The ugly truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money,” said Sanders. According to the report:

Lockheed Martin in 2008 paid $10.5 million to settle charges that it defrauded the government by submitting false invoices on a multi-billion dollar contract connected to the Titan IV space launch vehicle program. That didn’t seem to sour the relationship between Lockheed and the Defense Department, which gave Lockheed $30.2 billion in contracts in fiscal year 2009, more than ever before.

In another case, Northrop Grumman paid $62 million in 2005 to settle charges that it “engaged in a fraud scheme by routinely submitting false contract proposals,” and “concealed basic problems in its handling of inventory, scrap and attrition.” Despite the serious charges of pervasive and repeated fraud, Northrop Grumman received $12.9 billion in contracts the next year, 16 percent more than the year before.

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