Impeachment is a serious decision, but the Constitution provides Congress with this “indispensable” tool to hold officials to their oath of office. It is a tool to be used on the rarest of occasions when an official poses such a threat to the functioning of our democracy that Congress needs to determine if they are fit for office. The Project On Government Oversight supports the House vote to impeach President Donald Trump and to proceed to the Senate for a trial, which should be fairly administered and should provide an additional opportunity for evidence to be presented.
POGO is a nonpartisan organization. We believe that the law should be fairly applied to everyone regardless of party affiliation. But being nonpartisan does not mean we must be silent in the face of wrongdoing. Nonpartisanship means we believe no party, no administration, is immune from accountability. No White House is above the law.
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❄️ Happy Holidays ❄️
From all of us at POGO, we wish you a safe and happy holiday! This newsletter will be on hiatus for the holidays until Saturday, January 11th, 2020.
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Contractors using shell companies to hide their ownership are ripping off the Pentagon and endangering national security, according to a sobering report the Government Accountability Office (GAO) released last month.
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The Pentagon, whether reporting on wars or weapons, is remarkably opaque when it comes to spelling out how much they cost.
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The instructions changed significantly between the 2017 and 2019 audits, which means that the reported results aren’t consistent over time and can not be compared to assess progress accurately.
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Individual supporters like you are the driving force behind our work, and there’s never been a better time to make a gift. Take advantage of this chance to double your impact before 2020!
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POGO in the News
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Defense contractors hiding behind shell companies are “ripping off the Pentagon and endangering national security,” one watchdog group concluded after reading a “sobering” November 2019 report from the Government Accountability Office.
The GAO report underscores a problem that has become “a worldwide concern,” noted Neil Gordon, an investigator for the Washington, D.C.-based Project on Government Oversight. POGO has ideas for how the Pentagon can begin to address the problem.
While the GAO didn’t identify the fraudulent party in that case, Gordon made an educated guess. “This appears to reference Allied Components LCC, a military hardware supplier whose owner pleaded guilty in 2013 to providing F-15 fighter aircraft parts that were not only defective but also made in India even though the contract required the parts to be U.S.-made, and to passing along information about nuclear-powered submarines to India without the required government approval.”
“Altogether, four of the 32 cases involved contractors using U.S.-based shell companies to conceal that the work was really being done by a foreign-based company,” Gordon explained. “Concealing beneficial ownership in this manner increases the chance that ‘adversaries seeking to act against the government’s interests’ will gain access to sensitive government information or installations, according to the report.”
A case the GAO cited as an example of contractors inflating prices by concealing their ownership and control of subcontractors is apparently that of Supreme Foodservice, which pleaded guilty in 2014 to major fraud against the United States and paid a total of $434 million in penalties. And the unnamed contractor executives who admitted to “creating fictitious, inflated bids that were not from actual businesses” and fraudulently inflating invoices is an unmistakable reference to Glenn Defense Marine Asia and the massive “Fat Leonard” Navy contract corruption scandal.
The most rampant form of abuse documented in the report—accounting for 20 of the 32 cases—is contractors falsely posing as being eligible for contracts set aside for small businesses owned by “service-disabled veterans, women, minorities or economically and socially disadvantaged individuals.”
The report describes what POGO determined is likely a recent case involving a Kansas City, Missouri-area construction company owner who was sentenced to 18 months in prison last year for falsely claiming the company was managed by a service-disabled veteran in order to win more than $13.7 million in contracts.
POGO recommended three remedies. “The easiest one, which the GAO recommends, is for the Pentagon to conduct a systematic ‘department-wide assessment of risks posed by contractor ownership,’” Gordon explained.
The watchdog group proposed two additional reforms. “First, the government must revamp the system for reporting contractor ownership information,” Gordon wrote.
Companies wishing to do business with the government register in a database called the System for Award Management. However, the system currently doesn’t require the disclosure of beneficial owners; instead, contractors are only required under law to disclose their “highest-level” and “immediate” owners. Subcontractors are not required to register.
Any company that receives federal funds—from a prime contractor to the lowest-tier subcontractor—should be required to register and disclose their beneficial owners. And the system must be audited periodically to ensure the data is timely and accurate.
Second, a centralized database of corporate beneficial ownership information would greatly help government contracting officials identify and verify contractors’ real owners. There is currently an effort underway to lay the groundwork for such a database as part of a growing worldwide campaign to impose greater transparency on corporations. The government should do all it can to support this effort.
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“I think the biggest risk is that a malicious hacker might try to use this info in combination with the fact that all these individuals signed up for this campaign for a phishing attack,” Laperruque said in an email. “So for example, a hacker might send emails or texts to everyone on the list pretending to be Watch U.S. Fly or another Boeing funding campaign, asking individuals to click a link to join another petition.”
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“We’ve seen these kinds of cases for many years,” added Neil Gordon, who investigates federal contractor misconduct for the nonprofit Project on Government Oversight. “The government doesn’t always exercise adequate oversight on these contracts, partially because there’s just not enough staff or resources, or they’re in a rush to get the goods or services.”
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“Due to all of the controversies surrounding the JEDI contract, I would have thought that the Defense Department would have bent over backwards to justify its award decision,” said Scott Amey, the general counsel at the Project on Government Oversight. “Why continue to give contractors more reasons to question this contract and slow down the process?”
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"It might help to think of the nation’s post-9/11 wars in Afghanistan and Iraq like a pair of icebergs. The Pentagon has a web page that tells us how much we’ve each paid for the wars. But that only tells us how much of those icebergs we can see above the waves."
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"If federal funds were not used, the event avoided potential constitutional violations for President Trump," Amey said. "Questions still remain about why the hotel was selected and the impression given off by holding a military function at Trump's DC hotel, which has been the subject of lawsuits, congressional inquires, and political debate. It could be a simple night out at a trendy DC hotel or a show of support for the commander in chief, but only the organizers can answer that."
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Center for Public Integrity
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“Excessive government secrecy around the issues at the heart of the impeachment inquiry don’t serve the public nor do they serve the president, unless the defense offered by the House GOP isn’t supported by these documents.”
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That kind of promotional tweet would be a violation of ethics rules said Liz Hempowicz, the director of public policy at the Project on Government Oversight, a nonpartisan government watchdog group.
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“Through his more than 50 subsequent appearances on Capitol Hill, said Danielle Brian, executive director of the Project on Government Oversight (POGO), Mr. Fitzgerald all but single-handedly ‘created the concept of Pentagon waste and fraud. People didn’t even think about it. And now they very much understand it is happening,’ even as policymakers have failed ‘to listen to his message’, she said.
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