Protecting War Profiteers

A U.S. House/Senate conference committee in November stripped out of the final version of the $87 billion spending bill for Iraq and Afghanistan a provision that would have penalized war profiteers who defraud American taxpayers.

Republican and Democratic Senate conferees consistently supported the provision, which had been unanimously accepted during Senate Appropriations Committee markup of the bill. But House negotiators simply refused to negotiate on the issue.

The Senate provision was authored by Senator Patrick Leahy, D-Vermont, Senator Dianne Feinstein, D-California, and Senator Richard Durbin, D-Illinois.

"Congress is about to send billions and billions of dollars to a place where there is no functioning government, under a plan with too little accountability and too few financial controls," said Leahy. "That's a formula for mischief. We need strong disincentives for those who would defraud taxpayers, and removing this protection is another major blot on this bill."

U.S. fraud statutes protect against waste of tax dollars at home, but none expressly prohibit war profiteering and none expressly confer extraterritorial jurisdiction overseas.

The Leahy-Feinstein-Durbin amendment would have criminalized "war profiteering"--overcharging taxpayers for any good or service with the specific intent to excessively profit from the war or reconstruction efforts in Iraq.

The amendment also would have prohibited fraud and false statements in any matter involving a contract or the provision of goods or services in Iraq.

© Multinational Monitor November 2003