[Congressional Record Volume 148, Number 68 (Thursday, May 23, 2002)]
[Extensions of Remarks]
[Pages E890-E891]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  HOLD FEDERAL CONTRACTORS ACCOUNTABLE TO WORKPLACE AND ENVIRONMENTAL 
                                  LAWS

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                        Wednesday, May 22, 2002

  Mr. GEORGE MILLER of California. Mr. Speaker, I wish to bring to the 
attention of my colleagues an article by Ken Silverstein appearing in 
the May/June issue of Mother Jones magazine. The article reports that 
the Federal Government continues to let billions of dollars worth of 
contracts to dozens of companies that have been repeatedly cited for 
serious violations of workplace safety and environmental laws.
  Over a six months investigation, Mother Jones identified the 200 
corporations that did the most business with government between 1995 
and 2000. The magazine then matched that list against two other federal 
databases identifying companies prosecuted by the Justice Department 
for environmental violations and companies cited by the Occupational 
Safety and Health Administration for conditions posing a serious risk 
of injury or death to workers.
  Among the article's findings: forty-six of the 200 largest government 
contractors were prosecuted by the Justice Department and ordered to 
pay cleanup costs for dumping hazardous waste and for other 
environmental violations; fifty-five of the 200 largest contractors 
were cited for 1,375 violations of workplace safety laws; and thirty-
four contractors were penalized for violating both environmental and 
workplace safety laws. Those thirty-four firms faced total EPA 
penalties of $12.6 million and OSHA fines of $5.9 million, but received 
$229 billion in federal contracts over the same period.
  Mr. Silverstein documents the following cases in his compelling 
article: ``In 1997, TRW settles criminal charges growing out of 
violations of workplace safety laws. The same company is later found to 
have intentionally dumped chemical waste from the same plant in three 
states. As a consequence, the company pays a record $24 million in 
civil and criminal penalties. However, even that penalty is pittance 
compared to the more than $10 billion in taxpayer money that the 
company received between 1995 and 2000.''
  ``In 2000, Northrup Grumman pays nearly $6.7 million to settle two 
separate cases involving allegations that the company cheated the 
government by inflating the costs of parts and materials for warplanes. 
In 1995, General Dynamics pays nearly $2 million to resolve allegations 
that it falsified employee time cards. Yet between 1995 and 2000 those 
two companies received a total $38 billion worth of federal 
contracts.''
  ``Between 1990 and 1996, nine workers died at the Avondale shipyard, 
a death rate of three times that of other Navy shipyards. In 1999, OSHA 
documents hundreds of health and safety violations and fines the 
company $717,000. One month after the fines are levied, the government 
awards Avondale another $22 million contract to work on amphibious 
assault ships. The following year, three more workers are killed at 
Avondale, one of whom dies as a result of a repeat scaffolding 
violation.''
  Mr. Speaker, I am sure that many of my colleagues would agree with me 
that federal procurement policy should not reward companies that 
flagrantly disregard tax law, environmental laws, labor laws, antitrust 
law, or civil rights laws. Federal procurement law already requires 
government contractors to have a ``satisfactory record of integrity and 
business ethics.'' Unfortunately, when President Bush revoked the 
contractor responsibility rule, he rendered that requirement virtually 
unenforceable.
  As this article shows, by repealing regulations intended to give 
meaning to the requirement that government contractors demonstrate 
integrity and business ethics, President Bush has implemented a policy 
that does not punish big corporations for disregarding the law, but 
effectively rewards them instead.
  I commend the article below to the attention of my colleagues. I also 
would like to point out that the magazine compiled an extensive 
database of the violations which can be found on its web site. The 
article printed below is the version that appears on the magazine's web 
site. There is a longer version of the story that appears in the actual 
May-June version of the magazine and I would be happy to provide copies 
of the complete article to any of my colleagues who may wish to see it.
  Thank you, Mr. Speaker.

                             Unjust Rewards

                          (By Ken Silverstein)

       In 1994, an explosion claimed the life of a worker at an 
     Arizona air bag factory run by TRW, the huge Ohio-based 
     manufacturing conglomerate. The company, which had a record 
     of violating federal workplace safety laws at the plant, paid 
     a $1.7 million penalty in order to settle criminal charges 
     brought against it. Later, federal environmental officials 
     discovered that TRW, following a policy described as 
     ``clearly approved by management,'' was illegally dumping 
     chemical waste at landfills in three states. Last year, the 
     company paid a record $24 million in civil and criminal 
     penalties related to the dumping case.
       But even as TRW was repeatedly violating workplace and 
     environmental laws, it was still earning billions under 
     contracts awarded by the federal government. Between 1995 and 
     2000, the company received a total of $10.3 billion in 
     federal business, placing TRW among the nation's 10 largest 
     government contractors despite its record of jeopardizing the 
     safety of its employees and polluting the nation's air and 
     water.

[[Page E891]]

       That's not supposed to happen. Federal contracting officers 
     are charged with reviewing the legal records of companies 
     that do business with Washington and barring those that fail 
     to demonstrate ``a satisfactory record of integrity and 
     business ethics.'' But officials are given no guidelines to 
     follow in making such decisions, and there is no centralized 
     system they can consult to inform them of corporate 
     wrongdoing. As a result, a government report concluded in 
     2000, those responsible for awarding federal contracts are 
     ``extremely reluctant'' to rule out potential contractors, 
     even when they are aware of violations. And in the rare 
     instances when the rule is enforced, it is almost always 
     against small companies with little clout in Washington.
       Shortly before leaving office, President Clinton issued an 
     executive order providing clear guidelines for deciding 
     whether firms should be considered for a share of the roughly 
     $200 billion in federal contracts awarded each year. 
     Clinton's ``contractor responsibility rule'' specified that 
     federal officials should weigh ``evidence of repeated, 
     pervasive, or significant violations of the law.'' Officials 
     were told to consider whether a company has cheated on prior 
     contracts or violated laws involving the environment, 
     workplace safety, labor rights, consumer protection, or 
     antitrust activities.
       The order was never implemented. In one of his first acts 
     as president, after only 11 days in office, George W. Bush 
     put the rule on hold, saying the issue needed further study. 
     With big business suing to block the new guidelines, Bush 
     quietly revoked the rule 11 months later.
       Some 80,000 contractors do at least $25,000 in business 
     with the federal government each year, and the great majority 
     comply with the law. But a six-month investigation by Mother 
     Jones of the nation's 200 largest government contractors 
     found that Washington continues to award lucrative contracts 
     to dozens of companies that have been repeatedly cited for 
     serious violations of workplace and environmental laws. The 
     government's own database of contractors was matched with 
     lists of the worst violations documented by the Environmental 
     Protection Agency (EPA) and the Occupational Safety and 
     Health Administration (OSHA) between 1995 and 2000. Among the 
     findings:
       Forty-six of the biggest contractors were prosecuted by the 
     Justice Department and ordered to pay cleanup costs after 
     they refused to take responsibility for environmental 
     violations, including the illegal dumping of hazardous waste. 
     General Electric--which received nearly $9.8 billion from the 
     government, making it the nation's 10th-largest contractor--
     topped the EPA list with 27 cases of pollution violations for 
     which it was held solely or jointly liable.
       Fifty-five of the top 200 contractors were cited for a 
     total of 1,375 violations of workplace safety laws that posed 
     a risk of death or serious physical harm to workers. Ford 
     Motor Company, which between 1995 and 2000 ranked 177th among 
     contractors with $442 million in federal business, led the 
     OSHA list with 292 violations deemed ``serious'' by federal 
     officials.
       Thirty-four leading contractors were penalized for 
     violating both environmental and workplace safety rules. The 
     firms were hit with a total of $12.6 million in EPA penalties 
     and $5.9 million in OSHA fines--costs more than covered by 
     the $229 billion in federal contracts they were awarded 
     during the same period.
       Even contractors that commit the most obvious violations 
     are never suspended or debarred. One federal study found that 
     the government continues to award business to defense 
     contractors that have committed fraud on prior contracts. 
     General Dynamics Corp., the nation's fifth-largest 
     contractor, paid the government nearly $2 million in 1995 to 
     resolve charges that it falsified employee time cards, 
     billing the Pentagon for thousands of hours that were never 
     worked on a contract for testing F-16 fighters. Northrop 
     Grumman, the nation's fourth-largest contractor, paid nearly 
     $6.7 million in 2000 to settle two separate cases in which it 
     was charged with inflating the costs of parts and materials 
     for warplanes. Yet the two defense giants continue to receive 
     federal contracts, collecting a combined total of $38 billion 
     between 1995 and 2000.
       ``It is clear that, in many cases, the government continues 
     to do business with contractors who violate laws, sometimes 
     repeatedly,'' concludes a 2000 report by the Federal 
     Acquisition Regulatory Council, the agency that oversees 
     federal contractors. Others put it more bluntly.
       ``Government should not do business with crooks,'' says 
     Rep. George Miller (D-Calif.), who has demanded that the Bush 
     administration make public any meetings it had with corporate 
     lobbyists during which the contractor responsibility rule was 
     discussed. Bush's decision, Miller says, ``sends a message to 
     contractors that the government doesn't care if you underpay 
     your workers, or expose them to toxic hazards, or destroy the 
     public lands--the government will do business with you 
     anyway.''
       The complete story on federal contractors is available in 
     the May/June issue of Mother Jones magazine.

     

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