Contractor fraud alleged in Iraq

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Scott Jagow: Today in Washington, a Senate committee opens hearings on contracting abuse in Iraq. This committee doesn’t have a whole lot of power, but its chairman hopes the rest of Congress will be listening very closely. Steve Henn has more.

Steve Henn: Sen. Byron Dorgan, a Democrat from North Dakota, says examples of waste and fraud in Iraq are too numerous to count.

Sen. Byron Dorgan: You know, in cost-plus contracts, waste doesn’t matter to contractors. The more they get to buy, the more money they make. And we’ve had testimony that brand new $85,000 trucks have been left beside the road to be torched, because they didn’t have a wrench to fix a flat tire. And the contractor says, “Doesn’t matter. Taxpayer’ll pay for this. We’ll just buy another truck.”

The hearing will feature whistler-blowers who are accusing the defense contractor KBR of double billing the military to run a recreation center in Iraq. Dorgan says this is just one of thousands of examples of wasteful spending that together have cost taxpayers billions.

Dorgan: And I think that, in recent years, we have seen perhaps the greatest waste fraud and abuse this country has ever witnessed.

The Department of Justice declined to join a civil lawsuit against KBR alleging double billing in this case. The company declined to comment.

In Washington, I’m Steve Henn for Marketplace.