The nonpartisan Project on Government Oversight and Reform recently revealed that the top 100 government contractors made nearly $300 billion from federal contracts in 2007 alone. Since 1995 these same contractors have been involved with 676 cases of "misconduct" and paid $26 billion in fines to settle cases stemming from fraud, waste or abuse. Fines and other penalties, it seems, are simply the stunningly small price of doing government business.
Take the case of the top three war contractors, Lockheed Martin, Boeing and Northrop Grumman. These companies have engaged in 108 instances of misconduct since 1995 and have paid fines or settlements totaling nearly $3 billion. In 2007 they won some $77 billion in federal contracts. Or consider pharmaceutical giant Pfizer, which in September paid $2.3 billion to settle a slew of criminal and civil cases, including Medicaid fraud. According to the Justice Department, this was "the largest healthcare fraud settlement" in its history. Yet Pfizer made more than $40 billion in profits last year and won $73 million in federal contracts in 2007; it continues to do robust business with the government. Not bad for a "corporate felon."
Unfortunately, neither Pfizer nor the largest US military contractors are targets of significant Congressional action. Instead it's ACORN, a community organization that trains and advocates for poor and working-class Americans. Over the past fifteen years, ACORN has received just $53 million in federal funds, much of it for low-income housing. Despite--or perhaps because of--its efforts to empower some 500,000 member families, ACORN was the subject of a sting video produced by a right-wing activist that featured a fake pimp and prostitute seeking tax advice. The group swiftly fired the handful of employees who were entrapped, but that didn't put an end to the storm. Fox News aired the video repeatedly, and right-wing astroturf operative Rick Berman set up a Rotten ACORN website. The campaign was wildly successful. In mid-September all but seventy-five House Democrats and seven senators voted with their Republican colleagues to bar the group from receiving federal funds.
ACORN, like all organizations receiving federal dollars, should be subject to Congressional scrutiny. But ACORN was clearly singled out for political reasons. Those Democrats who voted for the "defund ACORN" bill should be required to explain their reasoning to their constituents, particularly when so few of them have taken substantive actions to apply the ACORN standard to corporate criminals with real rap sheets.
A small but growing number of lawmakers are fighting to confront out-of-control corporations. Here are three legislative initiatives that stand out:
- HR 3679. Representative Betty McCollum of Minnesota introduced her own ACORN Act--the Against Corporations Organizing to Rip off the Nation Act--which seeks to deny federal funds to "corporations or companies guilty of certain felony convictions." Pfizer is singled out, but the act could be applied to other corporations too. "Why are companies that break the law as a business strategy allowed to receive taxpayer funds?" asks McCollum. "A government contract is a privilege, not a right. If a company commits a felony against the people of the United States, then that privilege must end." Significantly, Wisconsin Representative David Obey, chair of the powerful House Appropriations Committee, has signed on as a co-sponsor. Obey also voted to defund ACORN.
- In the Senate, Bernie Sanders put forward an amendment to the current defense authorization bill (HR3326 S. AMDT. 2617) that calls on the defense secretary to conduct a wide-ranging study of the money the government pays to contractors that have been indicted, settled charges or been fined by any federal agency, as well as those that have been convicted of fraud. It also calls for recommendations on how to penalize contractors that are "repeatedly" involved with fraud. "Virtually every major defense contractor in this country has, for a period of many years, been engaged in systemic, illegal and fraudulent behavior while receiving hundreds and hundreds of billions of dollars of taxpayer money," says Sanders. While Sanders is just calling for a "study," the spirit of his amendment could be the basis for legislation that targets corporate criminals receiving federal dollars.
- Several Congressional offices say they are weighing the possibility of introducing legislation that would apply the ACORN standard to companies like Blackwater, whose operatives will stand trial next year on manslaughter charges stemming from killing Iraqi civilians; or KBR, which is being investigated in connection with the electrocution deaths of US soldiers and contractors in Iraq. Representative Jan Schakowsky says she is considering reintroducing a version of her 2007 Stop Outsourcing Security Act, which sought to ban the use of Blackwater and other mercenary companies from performing armed activities on the federal payroll. Secretary of State Hillary Clinton, a co-sponsor in the Senate, now oversees the work of Blackwater and other armed State Department contractors, increasingly employed in Afghanistan.
Florida Representative Alan Grayson is spearheading calls for fraudulent military contractors to be defunded under the anti-ACORN legislation. He points to Halliburton's misconduct and its "extreme and gross negligence...putting in showers in Iraq that end up electrocuting soldiers, and feeding them poisoned water." The federal funding ACORN has received over the past twenty years, Grayson says, "is roughly equal to what the taxpayer paid to Halliburton each day during the war in Iraq."