FEBRUARY 27, 2009
Businesses that defraud the U.S. government, violate national security and a variety of laws continue receiving lucrative federal contracts and other types of taxpayer dollars even though they appear on a database banning them from doing so.
A report (Excluded Parties List System) published by the Government Accountability Office, the investigative arm of Congress, reveals a troubling pattern among various federal agencies of disregarding a government database of 70,000 individuals and companies barred from receiving public contracts for past wrongdoing.
The businesses and individuals have been excluded for egregious offenses, ranging from jeopardizing American lives, cheating the government during previous deals, tax fraud, improperly receiving public money and other serious violations of local and federal laws.
Examples range from a German company whose president tried selling nuclear bomb parts to North Korea, a firm that sold the U.S. military defective body armor and a business suspended after an employee sabotaged repairs on a Navy aircraft carrier. All were listed in the banned business database yet each received new government contracts, according to the report.
Other businesses were banned for offenses like using fake Social Security numbers, massive tax fraud, Medicare fraud, false filings with the Securities and Exchange Commission and illegally using insider information to bid on federal deals.
In one case a company owner banned after being convicted for making fraudulent purchases with stolen government credit cards, created a new business—with the same address—to obtain awards from the Defense Logistics Agency. In another, a cleaning supply company suspended after being convicted for illegally discharging chemicals in the St. Louis sewer system got a contract with the Veteran Affairs Department.
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