DoD Report Shows Since 2001, $1.1 Trillion In Contracts Awarded to Companies Who Committed Fraud

lockheed martin fraudOne would think once a company had been convicted of defrauding the government, they wouldn't see another dime. Not so, shows a new DoD report. Believe this or not, the DoD has awarded over $1.1 trillion dollars in defense contracts to companies have been convicted, found liable, or settled fraud charges earlier with the DoD since 2001.

Senator Bernie Sanders summed up some of the numbers buried in the report:

Over the past ten years, DOD awarded $254,564,581 to companies that were convicted of a crime in connection with a DOD contract during that same period of time. To make matters worse, DOD awarded $33,079,743 of that to convicted companies after they had been convicted.

Over the past ten years, DOD awarded $573,693,095,938 to companies that were found liable or settle charges of a civil wrong in connection with a DOD contract during that same period of time. To make matters worse, DOD awarded $398,081,775,397 of that to those companies after they settled the charges or were found liable.

The numbers become increasingly shocking if you look at company affiliations. Over the past ten years, DOD awarded $1,104,423,438,564.10 to entities affiliated with companies that have a history of fraud.

Wow. Looking at the tables compiled by the DoD, we see the usual suspects, Boeing, Lockheed Martin, Cisco Systems, Dynamics Research, EMC, Johnston Controls, HP, HoneyWell, IBM, L-3 Communications, Motorola, Northrup Grumman, PricewaterhouseCoopers, Raytheon, TWS, Unisys....

the list goes on and on.

In 2008, Lockheed Martin paid $10.5 million to settle charges that it defrauded the government by submitting false invoices for payment on a multi-billion dollar contract connected to the Titan IV space launch vehicle program. But this didn’t seem to sour any relationship between Lockheed and the Defense Department.
The next fiscal year, in FY09, Lockheed received $30.2 billion in DOD
contracts—more than it had ever received before.

In another case, Northrop Grumman paid $62 million in 2005 to settle charges that it "engaged in a fraud scheme by routinely submitting false contract proposals," and "concealed basic problems in its handling of inventory, scrap and attrition." Despite the serious charges of pervasive and repeated fraud, Northrop Grumman received $12.9 billion in contracts the next year, 16 percent more than the year before.

Many of these same corporations offshore outsource jobs and labor arbitrage U.S. citizen engineers, most notably HP and IBM. It seems they get rewarded no matter what they do and why is that? While Senator Sanders points to:

  • Part of the reason is that DOD awards more contracts than it has the capacity to oversee, and, as a result, it is unable to effectively manage its contractors.
  • The other part of the reason is that DOD is not careful about which companies it awards contracts to begin with.

I'd say it's because we have outsourced the military. If the DoD doesn't contract with these same firms, there isn't anyone else capable of providing what they need. Even worse, it seems the auditing arm of the DoD is seriously underfunded and understaffed. Hence, we get fraud, rip-offs, waste, then a slap on the wrist and even larger contracts.

Beyond private contractors, wartime contracts are also under scrutiny, with Senators Jim Webb and Claire McCaskill supposedly crafting legislation to crackdown on waste and fraud. Believe this or not, contract rip-offs have improved since 2007.



Throw in DHS

The money spent on nothing since 9/11 boggles the mind.

truly that reports should be massive waste/fraud

We know the infamous "fence" has cost billions and done nothing, all bogus technology that doesn't even hit 5% error rates in lab conditions and I believe there were 101 "startups" getting DHS "contracts" who couldn't code their way out of a paper bag, much less make security technology.

First they turned away the migrant pickers

As far back as the 1970s, accelerating in the 1980s, I saw migrant fruit pickers (American citizens) turned away in the Mount Hood/The Dalles area. I personally reported this to the INS and was told that there was no officer available to investigate and would not be until after the fruit harvest. Corporate farms clearly discriminated against U.S. citizens, hiring Mexican illegals only, even though experienced locals were available and applied, plus there was an established migratory work force from California (mostly of hispanic background) who had been making the trip north for many years, were experienced, reliable and equipped (with picking buckets and campers).

Of course, I am working off the famous quote attributed to Rev. Martin Niemoller concerning the Nazi campaign to destroy their political opponents in 1930s Germany, one group at a time.

First they came for the communists,

and I didn't speak out because I wasn't a communist.

Then they came for the trade unionists,

and I didn't speak out because I wasn't a trade unionist.

Then they came for the Jews,

and I didn't speak out because I wasn't a Jew.

Then they came for me,

and there was no one left to speak out for me.

But I am modifying the famous quote, because what we have seen here in the Western USA for 35 years is something different although it is similar in that it's the same one-group-at-a-time method. What we have seen, and continue to see, in the Western USA is an anti-American internationalist corporatist campaign to destroy the domestic work force.

First they turned away the migrant pickers,

and I didn't care because I wasn't a migrant picker.

Then they turned away the tree planters,

and I didn't care because I wasn't a tree planter.

Then they turned away the fish-plant workers,

and I didn't care because I wasn't a fish-plant worker.

Then they turned away the loggers,

and it was too late for me to care about anything except the price of gold.


On the ground, I actually witnessed all of these trends as they have developed over the past 35 years. The method is to destroy the domestic work force and then to claim, "Oh, we have to bring workers in -- there is no domestic work force!" Government is complicit, right on up to Washington and then on above Washington to the WTO.

The populist reaction to corporate globalism has been slowly growing the whole time, or at least since the 1990s. This essentially protectionist movement has been co-opted time and again, but it is still alive and growing stronger every day. Unfortunately, the movement is still too weak in Washington (DC) to defeat even such indefensible legislation as the Panama FTA or the Columbia FTA or to push the Currency Exchange Rate Oversight Reform Act of 2011 through the opposition of Speaker John Boehner (R-Ohio), despite declarations of support of the bill by a majority of the House.

dock workers, cannery, fishing

There is a situation where "no American need apply" in working the docks, processing the catch, canning going on as well.

There are a host of these pockets where literally we're getting discrimination against U.S. workers, based on their citizenship status in so many words.

Tech is notorious, entire divisions, floors, buildings of nothing but Hindu Indian males, ages 24-32 exclusively.

When will America wake up and realize the demographics, discrimination of the 1960's, i.e. Blacks, Women has changed and morphed into discrimination by occupation not only based on single women, blacks, older workers but very much on immigration status, current country of origin and a common theme is strong discrimination against anyone with U.S. citizenship, be they black, white, purple, brown or whatever. This is for jobs in one's own country too.

"worker shortage"

There is no worker shortage but a host of farmers claimed their crops are "rotting on the vines/trees" because there is a "worker shortage". Well, these farmers are so used to getting their illegal labor, they don't even advertise in the cities or offer what they used to, temporary housing to get people to come pick the crops and so on.

Just ridiculous and a big fat excuse to claim "e-verify" the social security number check to see if you're an illegal workers as well as deter identity theft, is "bad for business".

Sure it is if you have to actually hire some Americans, advertise your job and offer something a little above slavery to get your crops picked.

I know what you are saying is true, in Oregon, California, it's clearly "no legal worker need apply" with a host of subsidies for illegal workers. Oregon will claim they do not give social services benefits to illegals but anyone living in the state of Oregon or California, Nevada, Illinois, knows this is bunk, because they see the illegals cashing their checks, living in subsidized housing and using food stamps all of the time.

Biggest lie and secret not kept by anyone living in the same areas. I saw a statistic somewhere that LA had 61% of it's population receiving social services and at the same breath, over 60% of it's population was illegal.

Frankly, if that state goes financially under, because of their never ending catering to illegals, they shouldn't get a dime of federal money. Let them sink into the economic sea and bear the consequences of the mess they made.