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Chairman Issa to Investigate Navy-Contracting Scandal



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It looks like Chairman Darrell Issa is going to turn his Oversight and Government Reform Committee’s attention onto the Navy contracting scandal. Stars and Stripes reports:

House Oversight and Government Reform Committee Chairman Darrell Issa is demanding the Navy turn over contracting documents as the panel begins an investigation into a “string of contracting scandals that have engulfed” the service, according to a letter released today from the California Republican to Navy Secretary Ray Mabus.

The congressman is asking Mabus for a briefing on steps the Navy has taken to battle contracting fraud. He’s also asking the Navy to turn over copies of its contracts with Glenn Defense Marine Asia since 2009. The company’s president, Leonard Glenn Francis, was arrested last year and has been accused of overbilling the Navy for services and of bribing Navy personnel.

“The trend of contracting fraud and mismanagement call for closer scrutiny of the Navy’s contracting practices and oversight,” Issa said in his letter.

This could be big. First, there is a lot of money to be saved on the line considering the exposed widespread defrauding by Navy contractors of taxpayers’ dollars. A month ago, the New York Times wrote about the extent of the fraudulent behaviors by some Navy contractors:

The serial problems with the ship-supply, or husbanding, companies have turned into one of the Navy’s most embarrassing scandals in years. The issue burst into public view in September when the owner of the Navy’s main ship supply company in the Pacific, Leonard Glenn Francis, was arrested on charges that he bribed Navy officials to help him overcharge.

Last month, the service suspended one of its main supply firms in the Middle East and Africa, Inchcape Shipping Services, from winning new contracts because of a civil fraud investigation by the Justice Department into allegations that the company repeatedly overbilled the Navy.

And this week the Navy’s largest ship supply firm, Multinational Logistic Services, which has received $346 million for port services in Africa, the Mediterranean, Central America and the Pacific, placed one of its senior executives on leave while looking into his handling of contracts at his former employer, Inchcape.

Issa’s investigation could make a lot of noise if you add to these problems the scandal of several senior U.S. Navy officials being arrested on charges of accepting prostitutes, luxury travel, and cash from a major foreign-defense contractor “in exchange for classified and internal Navy information.” 

Senator John McCain has complained about what he calls an “unaddressed culture of waste and inefficiency.” According to him, this “perception of inefficiency” is one reason sequestration occurred. I see it differently. The “perception of inefficiency” is due to accumulated evidence that there is a tremendous amount of waste and abuse in the Defense budget. And because there is so much unchecked waste and abuse going on, if given the necessary flexibility about where to cut, the Pentagon shouldn’t have any problems implementing the sequester cuts.

It is also worth remembering that once again, in September last year, U.S. Senators Tom Coburn (R., Okla.) and Joe Manchin (D., W.V) introduced the Audit the Pentagon Act of 2013, S. 1510. Their bill “provides incentives for the Department of Defense, which is the only Federal agency that has never fully complied with financial-management laws, to meet its audit schedule while also instituting consequences for further failure to follow the law.” Knowing how the Pentagon spends its money is not only important for getting rid of fraud, waste, and abuse. It would also help the Pentagon figure out if it is spending money according to its stated priorities.

 

 



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