Saturday, October 22, 2011
In the nation’s capital, crime does pay for defense contractors.
The Department of Defense has admitted that it has rewarded hundreds of companies convicted of fraud with new deals that totaled more than $1.1 trillion.
Senator Bernie Sanders (I-Vermont), who requested the information from the Pentagon, said,
“The ugly truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money.”
Examples include Lockheed Martin, which in 2008 paid $10.5 million to settle charges that it defrauded the government by submitting false invoices related to the Titan IV space launch vehicle program. The following year Lockheed pulled in $30.2 billion from the Defense Department.
Northrop Grumman paid $62 million in 2005 to settle fraud charges, but by the next year, received nearly $13 billion in contracts, which amounted to a 16% increase over the previous year. In 2009, they were hit with a $325 million bill for malfeasance.
Boeing has paid more than $600 million in civil settlements, and TRW $436 million.
-Noel Brinkerhoff
Report to Congress on Contracting Fraud (Department of Defense) (pdf)
Table 1A- Criminal Convictions (Senator Bernie Sanders) (pdf)
Some Government Contractors are Too Big to be Banned (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Northrop Settles Largest-Ever Defense Fraud Suit…But Loses Nothing (by Noel Brinkerhoff, AllGov)
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