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Secret squirrels squandering tax dollars & other news

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The evidence before the Committee shows that the AEY contract can be viewed as a case study of a dysfunctional procurement process. At nearly every turn, Defense Department officials made serious mistakes that have cost the taxpayers tens of millions of dollars. The documents and interviews show that there was a questionable need for the contract, an inadequate assessment of AEY’s qualifications, and poor execution and oversight of the contract.

But at least one key Pentagon agency thought the company was shady from the start and questioned AEY’s ability to adequately carry out the much larger contract: the Defense Contract Audit Agency (DCAA). Here’s the skinny, from a very credible Pentagon source with knowledge of the incident:

…for a contractor new to government business, we will perform a financial capability audit regardless of the type of procurement—FAR Part 12 or FAR Part 15. The contracting officer needs to be assured that the contractor has the financial cash flow to support performance under the contract regardless of contract type. But contracting officers do not always use our advice—case in point is AEY (the company run by the 23 year old that obtained arms from China). We determined that AEY did not have the financial capability to perform the contract—the company had virtually no financial records, but the Army awarded the contract anyway.

(Click HERE for article)

As Mideast Lashes Out Against Corruption, Chamber of Commerce Lobbies to Weaken Anti-Corruption Law
Marian Wang – (ProPublica) – March 25, 2011 – Even as anger over governmental corruption has exploded into protests across the Middle East, the U.S. Chamber of Commerce has been working to weaken the law that bans companies from bribing foreign officials.

That effort, which has been going on for months, recently got ratcheted up when the Chamber hired former U.S. Attorney General Michael Mukasey to lobby specifically on “possible amendments to the Foreign Corrupt Practices Act,” according to Mukasey’s lobbying registration document. The FCPA, passed in 1977, prohibits U.S. companies and foreign companies whose securities are traded on U.S. exchanges from paying bribes to foreign officials.

The U.S. Chamber’s Institute for Legal Reform, in a report last fall [PDF], said that both the Justice Department and the Securities and Exchange Commission had become “increasingly aggressive in their reading of the law” within the last decade, bringing more FCPA enforcement actions than ever, netting higher fines and filing more cases against individual company employees.

That’s something the Justice Department has trumpeted as an achievement: “Our FCPA enforcement is stronger than it’s ever been—and getting stronger,” Lanny Breuer of the Justice Department’s criminal division said at a conference in November. In the 2010 fiscal year, half of all penalties won by his division were from foreign bribery cases. (The Washington Post just yesterday published a rundown of some recent actions.)

The Chamber of Commerce argues that aggressive enforcement of the anti-bribery law makes U.S. businesses less competitive than their foreign counterparts, though the law also applies to some foreign companies. The Chamber is pushing for Congress to make changes to the law, such as defining “foreign official” and requiring “willfulness” for corporate criminal liability.(Click HERE for article)

FOIA Fridays: Army Audit Report on the Army’s Foreign Language Program
Nick Schwellenbach – (POGO) – March 25, 2011 – Every Friday, POGO will strive to make one document available that we or others have obtained through the Freedom of Information Act (FOIA), especially documents that have not previously been posted online. Some of these documents will be more important than others, some may only be of historical interest— although relevance is in the eye of the beholder.  POGO is doing this to highlight the importance of open government and FOIA throughout the year.

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