[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 1516-1519]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      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-

[[Page 1517]]

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.
  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

[[Page 1518]]

     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).
                                 ______
                                 
      By Mr. COCHRAN (for himself, Mr. Frist, and Mr. Leahy):
  S.J. Res. 29. A joint resolution providing for the reappointment of 
Alan G. Spoon as a citizen regent of the Board of Regents of the 
Smithsonian Institution; to the Committee on Rules and Administration.
                                 ______
                                 
      By Mr. COCHRAN (for himself, Mr. Frist, and Mr. Leahy):
  S.J. Res. 30. A joint resolution providing for the appointment of 
Phillip Frost as a citizen regent of the Board of Regents of the 
Smithsonian Institution; to the Committee on Rules and Administration.
  Mr. COCHRAN. Mr. President, I am pleased to introduce two joint 
resolutions appointing two individuals to the Smithsonian Board of 
Regents. The joint resolutions are cosponsored by Senators Frist and 
Leahy. Alan Spoon and Phillip Frost have been approved and recommended 
for appointment by the Smithsonian Board of Regents. I ask unanimous 
consent that the text of the resolutions and the biographies of both 
gentlemen be printed in the Record. I ask the Senate to approve the 
resolutions.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Alan G. Spoon, Appointed 2000, Executive Committee, Chair, 
     Finance and Investment Committee.
       Alan G. Spoon, of Massachusetts, is Managing Partner of 
     Polaris Venture Partners, which invests in Internet-related 
     businesses, networking, biotechnology, and medical 
     technology. He was previously President of the Washington 
     Post Company, having served 18 years in various leadership 
     roles. He maintains leadership and advisory roles with 
     numerous companies and organizations in the technology, 
     communications, and financial industries.
                                  ____


                              S.J. Res. 29

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That, in 
     accordance with section 5581 of the Revised Statutes (20 
     U.S.C. 43), the vacancy on the Board of Regents of the 
     Smithsonian Institution, in the class other than Members of 
     Congress, occurring by reason of the expiration of the term 
     of Alan G. Spoon of Massachusetts, is filled by reappointment 
     of the incumbent for a term of 6 years. The reappointment 
     shall take effect on the date of enactment of this joint 
     resolution.
                                  ____

     Phillip Frost
     Chairman of the Board and CEO, Ivax Corporation, Miami Beach, 
         FL
       Nationally recognized for his creative enterprise, business 
     and marketing acumen, and generous support of education and 
     the arts, Phillip Frost has held leadership positions with 
     numerous corporations and organizations. Born in 
     Philadelphia, where his family lived above his father's shoe 
     store, Dr. Frost worked at a brother's hardware store before 
     heading to the University of Pennsylvania. There Dr. Frost 
     majored in French literature and spent one year studying at 
     the University of Paris, a seminal period that led to Dr. 
     Frost's life-long commitment to the arts. He and his wife, 
     Patricia, who is chair of the Smithsonian National Board, are 
     renowned collectors who gave their 113-piece collection of 
     American abstract art to the Smithsonian in 1986; they also 
     have stated their interest in exploring the possibility of 
     providing significant support for a major exhibition on 
     medical history at the National Museum of American History.
       After receiving his B.A. from the University of 
     Pennsylvania in 1957 and his M.D. from the Albert Einstein 
     College of Medicine in New York in 1961, Dr. Frost completed 
     his internship at New York's Montefiore Hospital and his 
     residency in dermatology at the Hospital of the University of 
     Pennsylvania. He then served as a lieutenant commander in the 
     U.S. Public Health Service at the National Cancer Institute 
     and completed a one-year senior residency at Jackson Memorial 
     Hospital in Miami. He joined the faculty of the University of 
     Miami School of Medicine in 1966 and then moved to Mount 
     Sinai Medical Center of Greater Miami, chairing its 
     Department of Dermatology from 1972 to 1990.
       While at Mt. Sinai, Dr. Frost sold a disposable instrument 
     for skin biopsies to Miles Laboratory. He and his partner in 
     that venture then purchased Key Pharmaceuticals, which was 
     later sold to Schering-Plough for $600 million. Eager to 
     explore the then-unglamorous world of generic drugs, Dr. 
     Frost next founded IVAX Corporation, which became recognized 
     for its consumer-directed research, development, manufacture, 
     and marketing of pharmaceutical products worldwide. Since 
     1987, Dr. Frost has served as chairman of the board of 
     directors and chief executive officer of IVAX; he also was 
     president from 1991 to 1995. IVAX was recently acquired by 
     TEVA Pharmaceutical Industries Ltd. and, according to 
     published reports, Dr. Frost will receive more than $1 
     billion of TEVA stock as a result of its sale.
       Dr. Frost is a director of Northrop Grumman Corporation, 
     Continucare Corporation, Cellular Technical Services Co., 
     Inc., and Ladenburg Thalmann Financial Services Inc. He also 
     is co-vice chairman of the American Stock Exchange's board of 
     governors and a trustee of Scripps Research Institute and 
     previously served as chairman of the board of directors of 
     Key Pharmaceuticals, Inc., chairman of Whitman Education 
     Group, Inc., and vice chairman of the board of directors of 
     American Vaccine, Inc. In addition, Dr. Frost possesses 
     significant fiscal experience with matters of government 
     oversight.
       Residents of Florida for over 40 years, Dr. and Mrs. Frost 
     also have been ardent supporters of local community efforts. 
     In addition to their commitment to the visual arts, the 
     Frosts made a $33 million gift to the University of Miami for 
     its school of music (now called the Phillip and Patricia 
     Frost School of Music), one of the largest individual gifts 
     the university ever has received. Dr. Frost serves as 
     campaign co-chair of the fund-raising initiative ``Momentum: 
     The Campaign for the University of Miami,'' having previously 
     served as chairman of its board of trustees, and co-chaired 
     the successful launch of the Miami Art Museum's fund-raising 
     campaign ``Art for All People.'' He is a former member of the 
     Florida International University (FIU) Foundation board and 
     the FIU board of trustees. The Patricia & Phillip Frost Art 
     Museum at FIU is so-named as a tribute to their longstanding 
     support; likewise, the university presented Dr. Frost with an 
     honorary degree in 1993 for his many contributions in 
     medicine, business, and community service. He also was named 
     the 2001 National Ernst & Young Entrepreneur of the Year.
       Since 1987, Phillip Frost has served as chairman of the 
     board of directors and chief executive officer of Ivax 
     Corporation, which was recently acquired by TEVA 
     Pharmaceutical Industries Ltd.; he also was president of IVAX 
     from 1991 to 1995. In addition, he was chairman of the 
     Department of Dermatology at Mt. Sinai Medical Center of 
     Greater Miami from 1972 to 1990.
       Nationally recognized for his business acumen and creative 
     enterprise, Dr. Frost has held leadership positions with 
     numerous corporations and organizations. In addition to his 
     management of the IVAX board of directors, he is chairman of 
     the board of its subsidiary, IVAX Diagnostics, and director 
     of Northrop Grumman Corporation, Continucare Corporation, 
     Cellular Technical Services Co., Inc., and Ladenburg Thalmann 
     Financial Services Inc. Dr. Frost also is co-vice chairman of 
     the American Stock Exchange's board of governors, chairman of 
     the board of trustees of the University of Miami, and a 
     trustee of Scripps Research Institute. He previously served 
     as chairman of the board of directors of Key Pharmaceuticals, 
     Inc., chairman of Whitman Education Group, Inc., and vice 
     chairman of the board of directors of American Vaccine, Inc.
       Dr. Frost and his wife, Patricia, are ardent supporters of 
     the arts. Sophisticated collectors of American abstract art, 
     they gave

[[Page 1519]]

     their 113-piece collection to the Smithsonian American Art 
     Museum in 1986. The Frost's $33 million gift to the 
     University of Miami for its school of music (now called the 
     Phillip and Patricia Frost School of Music) was one of the 
     largest individual gifts the university has ever received, 
     and the largest ever made to a university school of music in 
     the United States. Dr. Frost also serves as chair of the 
     fundraising initiative ``Momentum: The Campaign for the 
     University of Miami'' and has served as chair of the Miami 
     Art Museum's fundraising campaign ``Art for All People.'' 
     Additionally, he is a former member of the Florida 
     International University (FIU) Foundation board and the FIU 
     board of trustees. FIU's Patricia & Phillip Frost Art Museum 
     is so-named as a tribute to their longstanding support; 
     likewise, the university presented Dr. Frost with an honorary 
     degree in 1993 for his many contributions in medicine, 
     business, and community service. He also was named the 2001 
     National Ernst & Young Entrepreneur of the Year.
       A native of Philadelphia, Dr. Frost attended the University 
     of Paris from 1955 to 1956. He received his B.A. from the 
     University of Pennsylvania in 1957 and his M.D. from the 
     Albert Einstein College of Medicine in New York in 1961, 
     after which he completed his internship at New York's 
     Montefiore Hospital and his residency in dermatology at the 
     Hospital of the University of Pennsylvania. Following service 
     as a lieutenant commander in the U.S. Public Health Service 
     at the National Cancer Institute, Dr. Frost completed a one-
     year senior residency at Jackson Memorial Hospital in Miami. 
     He joined the faculty of the University of Miami School of 
     Medicine in 1966 prior his tenure at Mount Sinai Medical 
     Center.
                                  ____


                              S.J. Res. 30

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That, in 
     accordance with section 5581 of the Revised Statutes (20 
     U.S.C. 43), the vacancy on the Board of Regents of the 
     Smithsonian Institution, in the class other than Members of 
     Congress, resulting from the retirement of Manuel L. Ibanez, 
     is filled by the appointment of Phillip Frost of Miami Beach, 
     Florida. The appointment is for a term of 6 years, beginning 
     upon the date of enactment of this joint resolution.

                          ____________________