This past Tuesday, April 21, 2009, Senator Claire McCaskill (D-Mo) held the first meeting of the newly formed Sub-committee on Contracting Oversight. One of the hot topics for their meeting was whether the ‘guard dogs’ had the proper and necessary tools for their oversight on the awarding of government contracts.
"This is going to be about our concerted effort to identify the waste, fraud and abuse that has occurred in government contracting," McCaskill said before the meeting, which she promised would be the first of many.
The Senate Homeland Security and Governmental Affairs Committee created the sub-committee in January 2009 as an effort to prevent fraudulent spending and promote government transparency.
While it may appear that Uncle Sam has taken a backseat in the past, he is certainly making up for lost time (so to speak). In addition to the recent committee formed to prevent future corruption, there have been increasingly more and more stories of the government prosecuting contractors now for past misdeeds.
As a recent example, two executives in Chicago from the company Urban Services tried to win a $2 million dollar contract for repairing garbage carts. One of the major problems with Urban Services winning the contract was that they were politically connected with the administration at the time; throughout the Daley administration Urban Services was a favored company, having won roughly $30 million in contracts. The government today indicted Urban Services for rigging the bidding process in July of 2005 so their company won the contract for repairing all the Street and Sanitation Department’s garbage carts. In addition, the court found the company is accused of underpaying their minority and woman owned small business sub-contractors.
While 2005 may not seem like the distant past, there is another example which dates back more than 20 years. A man in Michigan began defrauding the Defense Department back in the early 1980s and was banned from performing future government contracts in 1984. John C. Curtiss, now 65, did not appear at his original hearing in 1988 and had been missing until recently, when authorities in the Bahamas picked him up for a visa violation. Curtiss then came to Richmond, VA to face charges.
Though the government banned him from government contracting in 1984, Curtiss convinced his wife and a friend to continue to bid on government contracts on his behalf. Once they won a contract, Curtiss sold poorly constructed electrical products that he made in his home in Warren, Michigan to the military. Curtiss faces 105 years in prison and millions in fines for his 1988 convictions, not to mention an additional $250,000 plus five years if he’s convicted of failing to appear for his original court date.
Curtiss is an unusual case though. Rarely do individuals committing fraud with the government mange to leave the country for 20+ years. The active steps that the government is making towards preventing fraud and punishing individuals are impressive. As McCaskill stated yesterday, "Even a very small percentage of fraud costs taxpayers dearly. That’s why we have chosen this first hearing to look at the issue of fraud." Every penny counts when it’s the taxpayer’s money on the line, and with the recent transparency of federal spending it’ll be less likely than ever that circumstances like those of Urban Services and the Curtiss family slip under the radar.