[Congressional Record Volume 152, Number 17 (Monday, February 13, 2006)]
[Senate]
[Pages S1130-S1131]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Dorgan, Mr. Johnson, and Mr. 
        Lautenberg):
  S. 2277. A bill to promote accountability and prevent fraud in 
Federal contracting; to the Committee on Homeland Security and 
Governmental Affairs.
  Mr. DURBIN. Mr. President, this week marks five months since 
President Bush stood in Jackson Square in New Orleans and promised, 
``Throughout the area hit by the hurricane, we will do what it takes, 
we will stay as long as it takes, to help citizens rebuild their 
communities and their lives.''
  America must keep that promise, and we must do so responsibly. So 
today, I am introducing a proposal to ensure that from here on out, 
federal reconstruction dollars needed to rebuild the Katrina-ravaged 
Gulf Coast--and Iraq--are not awarded to companies with histories of 
cheating American taxpayers.
  My bill, the Reconstruction Accountability and Anti-Fraud Act, will 
promote accountability and prevent fraud in two of the largest 
reconstruction projects ever undertaken by the United States.
  Under my proposal, firms that have cheated American taxpayers by 
overcharging, improperly billing or defrauding the government of more 
than $10 million over the last five years will be ineligible to compete 
for reconstruction work in either the Gulf Coast or Iraq.
  Katrina is a national tragedy and rebuilding Iraq is a national 
responsibility, and neither should be an opportunity for profiteering.
  Firms that have misused Iraq construction funds should be held 
accountable--not rewarded with no-bid contracts to rebuild the Gulf 
Coast.
  Sadly, we've already seen examples of just that sort of misuse of 
taxpayer dollars.
  New Orleans were still waist-deep in flood waters when Halliburton 
and its subsidiary, Kellogg, Brown & Root, were awarded some of the 
first multi-billion dollar no-bid contracts for Katrina reconstruction 
work. The companies received those contracts despite repeatedly 
overcharging the government for work in Iraq.
  Listen to these abuses: In 2004, Halliburton was found to have 
overcharged the Defense Department by $167 million to import gasoline 
into Iraq from Kuwait.
  A year later, a Pentagon audit revealed another $108 million in 
overcharges by KBR, a Halliburton subsidiary, for delivering gasoline 
to Iraq.
  In 2003, KBR overcharged the government $27.4 million over 9 months 
for meals at five military bases in Iraq and Kuwait, where they billed 
the government for an average of 42,000 meals a day but served only 
14,000 meals a day.
  Last month, former KBR employees testified at a Senate Democratic 
Policy Committee hearing that water provided by KBR to thousands of 
U.S. troops in Iraq contained twice as much fecal coliform and other 
harmful bacteria as untreated water from the Euphrates River.
  Yet incredibly, instead of banning Halliburton and KBR from competing 
from Katrina reconstruction work, the Bush administration awarded these 
same companies multibillion dollar no-bid contracts for Katrina work.
  Not only that, many of the contracting practices blamed for wasteful 
spending in Iraq--including the ``cost-plus'' provisions that guarantee 
profits to contractors no matter how much they charge, or how well or 
poorly they perform--are being used in the gulf coast.
  American taxpayers and the people of the gulf coast can't afford 
reconstruction based on the Halliburton business model of waste, fraud, 
and abuse. We must increase oversight and accountability in Iraq, and 
we must demand the same accountability here at home.
  A growing number of reports demonstrate why this bill is needed.
  Since November 2003, Congress has appropriated $21 billion for Iraq 
reconstruction and relief. On a bipartisan basis, this Congress has 
given the President everything he has asked for to support his 
ambitious plans to rebuild Iraq.
  Earlier this week, Stuart Bowen, the Special Inspector General for 
Iraq Reconstruction, told the Senate Armed Services Readiness 
Subcommittee that nearly all of that money is either spent or 
obligated, and what remains, ``will not permit completion of all 
projects that were envisioned.''
  We know how dangerous Iraq has become, not only for our troops but 
also for everyone involved in reconstruction. Dangerous conditions 
there have caused many setbacks and delays, and they have forced USAID, 
the Department of State, and others to devote increasing amounts of 
money to security, rather than reconstruction. Security is and will 
remain a serious problem, but it is by no means the only reason that 
the United States Government has spent billions of dollars for Iraqi 
reconstruction--and Iraq still struggles to rebuild.
  The reports of the Special Inspector General for Iraqi Reconstruction 
fully address the serious security challenges our men and women in Iraq 
face today, and every day, but they also paint a grim picture of 
conditions in Iraq, and of poor planning, execution, and oversight of 
reconstruction efforts by the administration.
  Let me be very clear: These failings are not the fault of our troops 
or of the men and women of USAID, of the Department of State, and other 
agencies that are risking their lives and working heroically to help 
the Iraqi people rebuild their shattered nation and create a better 
future, and they deserve our thanks and respect.
  The Special Inspector General found that the CPA--the Coalition 
Provisional Authority--burned through nearly $100 million in 
Development Fund for Iraq money with few records to show for how that 
money was spent. In many instances, the money simply vanished. That is 
simply inexcusable.
  In the town of Hillah, for example, the Special Inspector General 
found that the CPA left $7 million worth of projects uncompleted. The 
money allocated for these projects is missing.
  Thanks to the good work of Special Inspector General Bowen, the 
American criminal justice system is going to hold at least a few people 
accountable.
  Unfortunately, because of poor recordkeeping, there may be no way now 
to trace and recover all of the billions of dollars that have 
disappeared in Iraq.

[[Page S1131]]

  But where we can track fraud and overbilling to specific companies, 
why would we give more money to these same offenders?
  This week, the President sent Congress a budget proposal for next 
year that cuts Medicare, Medicaid, student loans, veterans' health, and 
many other vital programs America depends on.
  I am deeply concerned about the deficits that have built up under 
this President. In 5 years, we've gone from a $5 trillion projected 
surplus to multi-trillion dollar projected deficits as far as the eye 
can see. We must restore fiscal sanity to the Federal budget. But 
before we cut health care for seniors and veterans or student loans, we 
should cut out the waste, fraud, and abuse in Federal reconstruction 
contracts.
  We must ensure that reconstruction dollars meant to help Katrina 
victims rebuild their lives are not diverted to irresponsible 
contractors seeking to pad their bottom lines. Whether the work is done 
in Iraq or in Louisiana, Alabama, or Mississippi, there must be 
honesty, transparency, and accountability.
  General John Abizaid, the commander of the U.S. Central Command, has 
said that the key to military success in Iraq ``is whether we can learn 
from our mistakes.''
  Five months ago, when the President addressed the Nation from Jackson 
Square in New Orleans, he said, ``Americans have every right to expect 
a more effective response in a time of emergency. When the federal 
government fails to meet such an obligation, I, as President, am 
responsible for the problem, and for the solution. This government will 
learn the lessons of Hurricane Katrina.''
  This is the test. If we are serious about correcting mistakes, there 
must be accountability. We cannot reward companies that have cheated 
the American people with even more taxpayer dollars, with little or no 
oversight. Our troops who are risking their lives deserve better. Our 
fellow American citizens who are struggling to rebuild their lives and 
communities in the gulf coast deserve better. And the American 
taxpayers who are paying the bills deserve better.
  We have the biggest economy in the world. We don't need to rely on 
just a few privileged firms to do America's work. We don't need over-
billers, underperformers, chiselers, and cheats to do America's work.
  America's work and American taxpayer dollars should go to companies 
that believe in accountability, responsibility, and honest work for an 
honest dollar.
  There are countless firms that fit that bill--in the gulf coast 
region, in Illinois, and across America. By weeding out companies that 
have cheated taxpayers, my bill will assure that those hard-working 
firms have a fair shot to compete for Federal reconstruction dollars in 
Iraq and at home.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2277

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Reconstruction 
     Accountability and Fraud Prevention Act of 2005''.

     SEC. 2. ACCOUNTABILITY IN FEDERAL CONTRACTING.

       (a) In General.--Except as provided in subsection (b), none 
     of the funds appropriated or otherwise made available by the 
     Emergency Supplemental Appropriations Act to Meet Immediate 
     Needs Arising From the Consequences of Hurricane Katrina, 
     2005 (Public Law 109-61), by the Second Emergency 
     Supplemental Appropriations Act to Meet Immediate Needs 
     Arising From the Consequences of Hurricane Katrina, 2005 
     (Public Law 109-62), or through the Iraq Relief and 
     Reconstruction Fund may be obligated or expended in 
     connection with a contract or covered task order entered into 
     after the date of the enactment of this Act with a contractor 
     that, during the previous 5 years--
       (1) has been found by an executive agency or any Inspector 
     General to have overcharged or improperly billed the Federal 
     Government by a total of at least $10,000,000 through one or 
     more overcharges;
       (2) has been found by an executive agency or any Inspector 
     General to have committed one or more fraudulent acts 
     resulting in total costs or losses to the Federal Government 
     of at least $10,000,000; or
       (3) has been suspended or debarred for a period of at least 
     one year under the Federal suspension and debarment 
     regulations.
       (b) National Security Waiver.--The President may waive the 
     restrictions under subsection (a) on a case-by-case basis if 
     the President determines that such waiver is in the national 
     security interest of the United States and submits to the 
     appropriate congressional authorities a report describing the 
     reasons for such determination.
       (c) Definitions.--In this Act:
       (1) Appropriate congressional authorities.--The term 
     ``appropriate congressional authorities'' means--
       (A) the Majority Leader and the Minority Leader of the 
     Senate;
       (B) the Speaker of the House of Representatives and the 
     Minority Leader of the House of Representatives; and
       (C) the Committees on Appropriations of the Senate and the 
     House of Representatives.
       (2) Covered task order.--The term ``covered task order'' 
     means a task order valued at more than $10,000,000 entered 
     into pursuant to a contract entered into before the date of 
     the enactment of this Act.
       (3) Executive agency.--The term ``executive agency'' has 
     the meaning given that term in section 4 of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403).
                                 ______