[Congressional Record Volume 151, Number 139 (Thursday, October 27, 2005)]
[Extensions of Remarks]
[Page E2181]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF THE FEDERAL DISASTER PROFITEERING PREVENTION ACT OF 
                                  2005

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                      Wednesday, October 26, 2005

  Mr. CONYERS. Mr. Speaker, today I am introducing the ``Federal 
Disaster Profiteering Prevention Act of 2005,'' legislation that 
imposes tough new criminal and civil penalties on would-be profiteers 
who intentionally overcharge the Federal Government for the provision 
of goods or services tendered in response to a presidentially declared 
major disaster or emergency. I am joined by Representatives Emanuel, 
DeFazio, Grijalva, Hinchey, Kilpatrick, Serrano, McDermott, Maloney and 
Sanders.
  One need not look beyond the ongoing reconstruction efforts in Iraq 
and the current controversy surrounding Halliburton to understand the 
need for such legislation. To date, Halliburton has been accused of 
overcharging the Federal Government by more than $1.4 billion in 
``questionable'' and ``unsupported'' reconstruction costs. Nearly two-
thirds of these costs have been characterized as ``questionable'' 
because, according to government auditors, they are ``unreasonable in 
amount'' and ``exceed that which would be incurred by a prudent 
person.'' Such costs include, but are in no way limited to, $617,000 in 
overpriced and double-billed soft drinks; $152,000 in movie rental 
charges; $1.5 million in excessive tailoring and seamstress charges; 
and over $560,000 in unnecessary heavy equipment charges.
  The ``Federal Disaster Profiteering Prevention Act of 2005'' is 
designed to prevent such acts from occurring in the future. It achieves 
this objective by cracking down on anyone who, in a matter involving a 
contract with the Federal Government, develops a ``scheme or artifice 
to defraud the United States.'' The civil penalties associated with a 
violation of this prohibition are the greater of $1 million dollars or 
triple the gross profits or received proceeds.
  The potential for additional future abuse of the Federal contracting 
and procurement process is quite clear. According to recent press 
reports, FEMA and the Army Corps of Engineers already have awarded at 
least seven no-bid contracts to several politically well connected 
firms, including Halliburton. For example, Kellogg, Brown & Root, a 
subsidiary of Halliburton, is currently repairing damaged naval 
facilities under a $500 million Defense Department contract. 
Additionally, no-bid housing contracts have been awarded to the Fluor 
Corp, a major Republican Party donor, and to the Shaw Group, a client 
of the lobbying and consulting firm run by friend of the president and 
former FEMA chief Joe Allbaugh. With such large sums being spent in 
this manner, it's more important than ever that we send a clear message 
that we will not tolerate the overcharging of our government during 
times of federal emergencies.
  I am hopeful that Congress can move quickly to enact this worthwhile 
and timely legislation.

                          ____________________