» 2011 » July Ms Sparky

Where’s the fraud ceiling?… & other news

Posted on: July 31st, 2011 at 6:36 am — by Forseti

House probes policies on counterfeit military electronics
Michelle M. Stein - (Medill News Service) – July 31, 2011 – WASHINGTON – Lawmakers from both parties are challenging the Department of Homeland Security over policies that they say impede efforts to stop imports of counterfeit electronics used in military devices.

The electronic chips, which act like the brain for many electronic devices, are one of the most counterfeited parts in the Pentagon’s supply chain, according to a Commerce Department report last year. That leaves the military technology that depends on them at a great risk of failure, which experts say has huge national security implications.

“It’s very clear that there are significant numbers of (counterfeit) semiconductors that are making it through to military supply chains,” said Brian Toohey, the president of the Semiconductor Industry Association, a lobbying group. “The implications (of) that, from a reliability perspective, from a failure perspective, are very serious.”

Failing parts aren’t the only national security concern with counterfeit chips, experts say. (Click HERE for article)

Military mentors program casualty of disclosure law
Tom Vanden Brook – (USA Today) – WASHINGTON – July 29, 2011 – The number of retired generals hired by the Pentagon to advise the military has declined dramatically now that they must divulge outside income to avoid a conflict of interest and had their pay capped, according to reports obtained by USA TODAY.

Now that they must divulge outside income and have their pay capped, the number of retired generals hired by the Pentagon to advise the military has declined dramatically.

(Read the rest of the story here…)

Anham LLC accused of outrageous overbilling in Iraq (Updated 7/31/2011)

Posted on: July 30th, 2011 at 9:00 am — by Ms Sparky

Dubai Firm Overbilled Pentagon $900 for $7 Switch, Bowen Says

By David Lerman and Tony Capaccio – Jul 29, 2011 9:01 PM PT

A U.S. contractor in Iraq overbilled the Pentagon by at least $4.4 million for spare parts and equipment, including $900 for an electronic control switch valued at $7.05, according to a new audit.

Based on the questionable costs identified in a $300 million contract with Dubai-based Anham LLC, the U.S. should review all its contracts with the company in Iraq and Afghanistan, which total about $3.9 billion, said Special Inspector General For Iraq Reconstruction Stuart Bowen.

“The audit found weak oversight in multiple areas that left the government vulnerable to improper overcharges,” Bowen wrote in the forward to his 30th quarterly report, released today. The contract in question was funded with a combination of money earmarked for Iraqi Security Forces and Army operations and maintenance funds.

Among the “egregious examples of overbilling” by Anham were $4,500 for a circuit breaker valued at $183.30, $3,000 for a $94.47 circuit breaker and $80 for a small segment of drain pipe valued at $1.41. (Read the rest of the story here…)

Posted in GOV. CONTRACTORS, Reports & Investigations. Tags: Anham LLC, DCMA*, Defense Contract Management Agency*, Pentagon, Pioneer Iraqi Trading Company, SIGIR, U.S. Dept. of State*, USAID, USAID Iraq. 6 Comments »

Former mayor of FOB Ridgway, Iraq sentenced to 18 months (updated)

Posted on: July 30th, 2011 at 7:53 am — by Forseti

Former Army Official Sentenced to 18 Months in Prison for Accepting Illegal Gratuities from Contractors in Iraq

(L)Unknown Iraqi (C) LTC David Charles Pfluger (R) Unknown Iraqi

(DoJ) – WASHINGTON – July 29, 2011 - A former U.S. Army lieutenant colonel was sentenced today to 18 months in prison for accepting illegal gratuities from multiple Iraqi contractors and for stealing from Iraqi fuel reserves, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

David Charles Pfluger, 56, of Abilene, Texas, was sentenced today by U.S. District Judge Sam Cummings in the Western District of Texas. Judge Cummings also sentenced Pfluger to three years of supervised release and ordered the defendant to pay $24,000 in restitution. Pfluger pleaded guilty to a four count indictment charging him with one count of conspiracy, two counts of accepting gratuities, and one count of conversion of third party property by a U.S. official.

(Read the rest of the story here…)

Posted in A Soldiers Story, GOV. CONTRACTORS, Indictments, Convictions & Arrests, Reports & Investigations, U.S. Army. Tags: Convictions, DoJ*, FBI, FOB Ridgway, LTC David Charles Pfluger, SIGIR, U.S. Department of Justice (DoJ). 11 Comments »

How the DoD Allows Contractors to Grade Themselves and Write Their Own Contract Terms, Part II

Posted on: July 28th, 2011 at 8:14 am — by Ms Sparky

Charles M. Smith – (Truthout | Solutions) – July 27, 2011 – In response to the high readership of last week’s column, I asked Charles Smith to go more in depth on the problem of conflict of interest in Department of Defense (DoD) contracting. He found that the DoD has actually loosened the rules and regulations concerning these destructive conflicts of interest. Smith knows this problem intimately. He is a retired Army civilian employee hero, who went up against the Iraq contractor KBR on behalf of the troops and the taxpayers and was demoted. Smith was chief of the Field Support Contracting Division of the Army Field Support Command in Rock Island Arsenal, and one of his main jobs was to oversee the enormous Army contract with KBR during the Iraq and Afghanistan wars. In 2004, he became concerned when the auditors of the Defense Contract Audit Agency (DCAA) told him that KBR could not justify more than a billion dollars in spending because of their chaotic documentation. He backed the auditors and would not sign off on payments and bonuses to KBR until they provided documented proof of their costs. He also backed DCAA and told KBR that he would legally be withholding 15 percent of all payments to KBR until their auditing systems caught up to their spending.

KBR, with their enormous influence and ability to stop their work on the Iraq and Afghanistan bases, pushed back. Smith was replaced and shuttled off to look at future contracts, while his replacement approved and paid KBR the money without major changes in the billings. That contract, known as LOGCAP III, has now provided KBR with over $40 billion for slinging hash, doing laundry, driving trucks and building barracks in Iraq and Afghanistan. For the full picture of what can happen when a contractor “owns” the service they are working for, i.e. the US Army, see a New York Times profile [4] outlining how Smith, with all his experience, could not get away with doing the right thing for the troops and taxpayers.

-Dina Rasor, Solutions editor

In last week’s Solutions column [5], Dina Rasor focused on the findings of a DoD Inspector General (IG) report [6] that described Organizational Conflicts of Interest (OCI) along with contractor performance of inherently governmental functions in the management of the MRAP logistics program. This report caught my eye, as it was similar to a DoD IG report [7] on the Iraq and Afghanistan ill-conceived

(Read the rest of the story here…)

Posted in GOV. CONTRACTORS, KBR, KBR Contract, LOGCAP III - KBR, Reports & Investigations. Tags: Charles M. Smith, DCAA*, DoD*, DoDIG*, FAR, KBR, LOGCAP III, MPRI, MRAP, Organizational Conflict of Interest (OCI). 1 Comment »

Prosecutors Pursuing New Charges Against Suspended Defense Contractor

Posted on: July 28th, 2011 at 3:19 am — by Forseti

Agility (AGLTY) DGS fell for a third day this week, slipping 1.6 percent to 300 fils. U.S. prosecutors are investigating “potential new charges” against the Kuwaiti storage and logistics provider under indictment for overcharging the U.S. military, U.S. District Judge Thomas W. Thrash wrote. ~ Bloomberg

U.S. Army photo by Sgt. Andrew Miller

Neil Gordon – (POGO) – July 27, 2011 – This week, it was reported that federal prosecutors are investigating potential new criminal charges against Agility, the Kuwaiti logistics company under indictment for overcharging the U.S. military on food supply contracts.

Agility (formerly Public Warehousing Company KSC and PWC Logistics), has been suspended from federal contracting since being indicted in November 2009. (The suspension record can be found on the Excluded Parties List System website.) Agility is also facing a civil False Claims Act lawsuit in the matter. The criminal charges also prompted DynCorp International to fire Agility as its main subcontractor in Afghanistan. This is what happens when you get caught “Playing With Uncle Sam’s Food,” as POGO wrote when we first heard about the case.

(Read the rest of the story here…)

Posted in Agility/PWC/GCC, GOV. CONTRACTORS, Indictments, Convictions & Arrests, Qui Tam. Tags: Agility DGS Holdings, Agility/PWC/GCC, Dan Mongeon, DynCorp*, Excluded Parties List System (EPLS), False Claims Act, Neil Gordon, POGO, Retired General's Club, U.S. District Judge Thomas Thrash. 1 Comment »

MG Dan Mongeon, USA (Ret.), his supeona stands, new charges against Agility possible

Posted on: July 27th, 2011 at 9:24 am — by Forseti

Agility Prosecutors Probing ‘Potential New Charges,’ U.S. Judge Writes

David Beasley – (Bloomberg) – July 27, 2011 – U.S. prosecutors are investigating “potential new charges” against Agility (AGLTY), the Kuwaiti storage and logistics provider under indictment for overcharging the U.S. military, a judge wrote.

Agility asked U.S. District Judge Thomas W. Thrash in Atlanta to reject a federal grand jury subpoena demanding the appearance of retired U.S. Army General Dan Mongeon, a member of Agility’s board, according to federal court documents. Thrash, in an order docketed today, upheld the subpoena.

“The principal purpose of questioning this witness is to investigate potential new charges,” Thrash wrote. “This is a proper use of the grand jury.”

(Read the rest of the story here…)

Posted in Agility/PWC/GCC, GOV. CONTRACTORS, Indictments, Convictions & Arrests. Tags: Agility DGS Holdings, Agility/PWC/GCC, Dan Mongeon, Harry Frazier, Retired General's Club, U.S. District Judge Thomas Thrash. 11 Comments »

US: Blackwater fraud trial begins

Posted on: July 27th, 2011 at 3:17 am — by Forseti

(News 24) – Alexandria – July 27, 2011 – The security firm once known as Blackwater overbilled the federal government for services in Iraq and Afghanistan and submitted phony reimbursements and other bogus expenses, a lawyer said on Tuesday in opening statements of a whistleblower lawsuit brought by two former employees.

A lawyer for the company, which now operates under the name Xe Services, denied the fraud accusations and said the firm’s employees had always strived to be scrupulous in its accounting.

“The State Department continues to receive invoices from us, for our work,” said the company’s lawyer, David O’Brien. “They continue to pay it and they continue to do business with us.”

The 2008 lawsuit from ex-employees Brad and Melan Davis accuses the company of submitting fraudulent bills to the State Department on its $1bn contract for security work in Iraq and Afghanistan. If the jury agrees, the Davises would be eligible to collect a share of any money that the government lost to fraud.

(Read the rest of the story here…)