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Iraqi task force targets contract fraud

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Tess Vigeland: The Army is launching a major investigation into reports of waste and fraud in all those private contracts awarded for military operations in Iraq. A task force of 90 people is now supposed to examine every contract handed out by the military’s contracting office in Kuwait between 2003 and 2007.

Four years, 18,000 contracts. That task force is going to be busy. Here’s Marketplace’s John Dimsdale.

John Dimsdale: The military’s contracting with private companies for services in Iraq and Afghanistan has been plagued by reports of no-bid sweetheart deals, inflated prices, lost or stolen equipment and weapons and kickbacks.

The task force’s target, the contracting office in Kuwait, disbursed $3 billion for military support services over the past four years.

David Mulholland looked into the Kuwait-based contracts when he was business editor for Jane’s Defense Weekly. He alleges the Pentagon was using the contracts to reward powerful Kuwaiti allies.

David Mulholland: Some of it, I have pretty good reason to believe, that it was directed corruption from the Bush Administration to essentially grease the palms of high-ranking Kuwaiti officials. Some of it just pure corporate greed and corruption. Some of it just pure incompetence. My guess would be it’s a combination of all three.

The Pentagon already has a special inspector general to look into corruption in Iraqi reconstruction contracts.

But attorney Sam Gdanski, a former Defense Department assistant counsel, is one of many who’ve been frustrated trying to bring cases of fraud to the inspector’s attention.

Sam Gdanski: Unless you present an absolute black and white case to the special inspector general’s office, they say they don’t have the resources to handle the situation.

Gdanski welcomes the Army’s commitment of 90 staffers to review the Kuwaiti contracts. The Army is also centralizing its contracting operations. By January, all contracts worth more than a million dollars will be handled in the U.S.

In Washington, I’m John Dimsdale for Marketplace.

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