Saturday, March 10, 2012
In the course of allocating hundreds of millions of dollars to contractors during the Iraq war, the Department of Defense gave $20 million to a company that owed $4 million in back taxes.
Senators Tom Carper (D-Delaware) and Tom Coburn (R-Oklahoma) have written to the Pentagon demanding answers to why Leonie Industries was given a lucrative deal under the circumstances. The contract called for the company to provide “marketing and media services.”
Leonie Industries was founded in August 2004 by Camille Chidiac and his sister, Rema Chidiac DuPont and almost immediately began working for the Pentagon as a subcontractor on intelligence and information operations—which is defined as including “psychological operations, deception, protecting vital data, electronic warfare, and computer network defense and attack.” Since then it has gained at least $120 million worth of contracts with the Army. It first started owing taxes in 2006. Its owners have alternately said that their tax problems were typical of new businesses, that it is owed money and that it is difficult to work in war zones.
Carper and Coburn have asked Defense Secretary Leon Panetta if his department has withheld any money awarded to Leonie Industries in order to pay off the tax debt and if tax delinquency is taken into account at all when choosing contractors.
-Noel Brinkerhoff, David Wallechinsky
To Learn More:
Two Senators Target Government Contractors With Back Taxes (by Tom Vanden Brook and Ray Locker, USA Today)
U.S. 'Info Ops' Programs Dubious, Costly (by Tom Vanden Brook and Ray Locker, USA Today)
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