Tuesday, June 28, 2005

Stop Rewarding Corporate Scofflaws

Earlier this month I wrote about the state of Michigan barring a company that killed a worker from receiving any more state contracts. President Clinton had issued a regulations (since withdrawn by you-know-who) that required companies bidding for federal contracts to disclose whether they had been found liable for violating laws or regulations.

Meanwhile, Congressman Henry Waxman revealed in a hearing yesterday that the giant defense contractor (and former Dick Cheney employer) Halliburton was being investigated by the Pentagon about more than $1 billion in questionable bills for work done in Iraq.

In a letter to the Washington Post, OMB Watch Director Gary Bass thinks it's time to revive Clinton's effort:
Hold Contractors Accountable

While the Pentagon has managed to save money this year by withholding funds from delinquent contractors, this is hardly a solution to the larger -- and too common -- problem of federal contractor malfeasance ["Thousands of Non-Defense Contractors Owe Taxes," front page, June 16].

According to the Project on Government Oversight, between 1990 and 2002, the nation's top 43 contractors were responsible for about $3.4 billion in penalties, restitutions, settlements and Superfund cleanup costs.

For these scofflaws, some of the nation's richest corporate special interests, the fines and settlements are a small part of the cost of doing business as usual. Violations will continue until we start weighing a company's legal and regulatory compliance when awarding federal contracts.

A contractor responsibility rule issued at the end of President Bill Clinton's second term attempted to solve this larger problem, but it was revoked by the Bush administration. The rule required bidding companies to disclose whether they had been found liable for violating any law or regulation in the preceding three years.

Congress should ensure that our laws and protections are respected by companies that benefit from federal contracts. Taxpayers have every right to demand accountability for their money.

Founder and Executive Director
OMB Watch