Pentagon Paid $285 Billion to Contractors that Defrauded Government

Friday, February 04, 2011
Described as “shocking” by one lawmaker, the Department of Defense awarded $285 billion over a three-year period to companies that defrauded the U.S. military
Senator Bernie Sanders (I-Vermont), who requested the Defense report that uncovered the figure, urged the Pentagon to take action to prevent contracts from going to businesses that waste taxpayer dollars.
The senator said most of the money, about $280 billion, was paid to more than 200 companies that had civil judgments against them or settled fraud charges of more than $1 million. Also, 30 defense contractors were convicted of criminal fraud, but still were awarded $682 million in new work.
One of the contractors was AEY Inc., a Miami-based company that was given a $300 million contract to supply ammunition to Afghan security forces even though it had already been criticized for poor performance on previous contracts. An investigation found that AEY committed fraud by selling millions of rounds of banned Chinese-made military ammunition that was repackaged as having come from Albania. The company’s owner was sentenced to four years in federal prison after pleading guilty in 2009 to a fraud conspiracy charge.
-Noel Brinkerhoff
Billions Paid to Companies That Defrauded Pentagon (by Richard Lardner, Associated Press)
Report to Congress on Contracting Fraud (Department of Defense) (pdf)
Pentagon Keeps Rewarding Company Suspended for Fraud (by Noel Brinkerhoff and David Wallechinsky, AllGov)


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