Sunday, August 26, 2007

Waste, Fraud and Abuse In Iraq, Oh My!

From Talking Points Memo:

We've all heard the expression "no good deed goes unpunished," but this is ridiculous.

One after another, the men and women who have stepped forward to report corruption in the massive effort to rebuild Iraq have been vilified, fired and demoted. Or worse.

For daring to report illegal arms sales, Navy veteran Donald Vance says he was imprisoned by the American military in a security compound outside Baghdad and subjected to harsh interrogation methods.

There were times, huddled on the floor in solitary confinement with that head-banging music blaring dawn to dusk and interrogators yelling the same questions over and over, that Vance began to wish he had just kept his mouth shut.

He had thought he was doing a good and noble thing when he started telling the FBI about the guns and the land mines and the rocket-launchers — all of them being sold for cash, no receipts necessary, he said. He told a federal agent the buyers were Iraqi insurgents, American soldiers, State Department workers, and Iraqi embassy and ministry employees.

The seller, he claimed, was the Iraqi-owned company he worked for, Shield Group Security Co. "It was a Wal-Mart for guns," he says. "It was all illegal and everyone knew it."

So Vance says he blew the whistle, supplying photos and documents and other intelligence to an FBI agent in his hometown of Chicago because he didn't know whom to trust in Iraq.

For his trouble, he says, he got 97 days in Camp Cropper, an American military prison outside Baghdad that once held Saddam Hussein, and he was classified a security detainee.

Why has waste, fraud, abuse, and corruption flourished over the last several years in Iraq? This might have something to do with it.

Of particular interest, the AP noted that whistleblowers are offered an avenue under the federal False Claims Act to file what's called a "qui tam" lawsuit, which allows private citizens to sue on the government's behalf. (The policy was developed under Lincoln to help root out corrupt contractors selling defective products to the Union Army.)

The Justice Department has the option of signing onto these lawsuits, 12 of which have been filed dealing with alleged Iraq reconstruction abuse since 2004. To date, how many qui tam suits have the Bush administration endorsed? Zero.

A little more on qui tam:

The full phrase qui tam pro domino rege quam pro se ipso in hoc parte sequitur, means “he who sues for the king sues for himself."

More information can be found on qui tam lawsuits at Of particular note, there's this:

The False Claims Act provides incentive to relators by granting them between 15% and 30% of any award or settlement amount. In addition, the statute provides an award of the relator's attorney's fees, making qui tam actions a popular topic for the plaintiff's bar. Indeed, a private [natural] person may not be able to commence a qui tam action "pro se" -- that is, without representation by a lawyer -- since the private person is actually representing/filing the suit on behalf of the government and that may only be done by a lawyer.

Once a relator brings suit on behalf of the government, a U.S. Attorney for the district in which the suit was filed has the option to take over the case. If he or she does so, the government will usually notify the company or person being sued that a claim has been filed. Qui tam actions are filed under seal, which has to be partially lifted by the court to allow this type of disclosure. The seal prohibits the defendant from disclosing even the mere existence of the case to anyone, including its shareholders (a fact which may cause conflicts with the defendant's obligation under Securities & Exchange Commission or stock exchange regulations that require it to disclose lawsuits that could materially affect stock prices). The government may then, without disclosing the identity of the plaintiff or any of the facts, begin taking discovery from the defendant.

If the government does not decide to participate in a qui tam action, the relator may proceed on his or her own, though such cases classically have a much lower success rate. Conventional wisdom states that this is due in part to the fact that the government will get involved in what it believes are winning cases, but will avoid losing cases.

Or, I suppose, if you don't want even greater corruption exposed.

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