Official Says Fraud Loophole Was A 'Mistake'

WASHINGTON - The Bush administration inadvertently exempted foreign contracts in Iraq from fraud oversight, a top administration official said Tuesday, resulting in a loophole that Rep. Peter Welch, D-Vt., said could have protected private firms that steal taxpayer money. The admission follows weeks of controversy surrounding the exemption's mysterious appearance in a new rule guiding contractors being paid billions for government work in the U.S. and in foreign countries around the globe.