[Congressional Record (Bound Edition), Volume 152 (2006), Part 9]
[Senate]
[Pages 11783-11791]
[From the U.S. Government Publishing Office, www.gpo.gov]




        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of S. 2766, which the clerk will report.
  The bill clerk read as follows:

       A bill (S. 2766), to authorize appropriations for fiscal 
     year 2007 for military activities of the Department of 
     Defense, for military construction, and for defense 
     activities of the Department of Energy, to prescribe 
     personnel strengths for such fiscal year for the Armed 
     Forces, and for other purposes.

  Pending:

       McCain amendment No. 4241, to name the Act after John 
     Warner, a Senator from Virginia.
       Nelson of Florida/Menendez amendment No. 4265, to express 
     the sense of Congress that the Government of Iraq should not 
     grant amnesty to persons known to have attacked, killed, or 
     wounded members of the Armed Forces of the United States.
       McConnell amendment No. 4272, to commend the Iraqi 
     Government for affirming its positions of no amnesty for 
     terrorists who have attacked U.S. forces.
       Dorgan amendment No. 4292, to establish a special committee 
     of the Senate to investigate the awarding and carrying out of 
     contracts to conduct activities in Afghanistan and Iraq and 
     to fight the war on terrorism.
       Kennedy amendment No. 4322, to amend the Fair Labor 
     Standards Act of 1938 to provide for an increase in the 
     Federal minimum wage.
       Frist amendment No. 4323 (to Amendment No. 4322), to amend 
     title 18, United States Code, to prohibit taking minors 
     across State lines in circumvention of laws requiring the 
     involvement of parents in abortion decisions.

  The PRESIDING OFFICER. Under the previous order, the Senator from 
Rhode Island, Mr. Reed, shall be recognized to speak for up to 20 
minutes.
  Mr. REED. Mr. President, I rise this morning to discuss the fiscal 
year 2007 Defense authorization bill. I am glad it is on the floor. It 
is very important legislation, and it is arriving in a timely manner 
where we can dispose of it along with the other body and hopefully 
conclude in the next few weeks with a finalized Defense authorization 
bill.
  I would also note that this is Senator Warner's last bill as chairman 
of the Senate Armed Services Committee, and I personally want to 
commend him and thank him for his leadership, not only as the chairman 
of this committee, but as a young sailor, a young marine, and a more 
mature Secretary of the Navy, and now a mature Member of the United 
States Senate. So thank you, Senator, for your leadership and 
friendship.
  Mr. WARNER. Mr. President, I thank my colleague from Rhode Island. I 
appreciate his remarks, a Senator with a very distinguished military 
record of his own, and quite modest about it. But at some point I would 
love to have a colloquy with the Senator on why Rhode Island--we are 
talking about sovereignty and the formation of governments--about why 
did they hold out those many years before ratifying the Constitution? 
At some point, could the two of us have a colloquy about that?
  Mr. REED. I would be happy to do that, in the future.
  I would like to highlight some of the aspects of the bill which I 
think are very important. I have had the privilege of working with 
Senator Cornyn as the ranking member of the Emerging Threats 
Subcommittee. It has been a real pleasure. He has conducted the 
committee with great efficiency and great cooperation. The staff has 
been particularly helpful on a bipartisan basis.
  I am pleased to note that in the context of our deliberations, 
several important measures were included in this legislation. First, we 
have authorized an additional $400 million for science and technology 
programs. The original request sent by the Department of Defense was 
woefully inadequate. Science and technology is the key to our future on 
the battlefield as we match the skill and valor of our soldiers with 
the very best technology. We have to continue this investment. I am 
pleased that our legislation increases that item by $400 million.
  Also, the bill includes language to require a report to Congress on 
the testing policies and practices that should be pursued with respect 
to rapid acquisition programs, spiral development programs, quick 
reaction fielding programs, and the testing for safety and 
survivability of deployed equipment. One of the weaknesses, I believe, 
with the present approach of the Department of Defense is a failure to 
adequately test and evaluate, and I think that failure has to be 
corrected and this report will, I hope, put attention on this issue and 
lead to positive results.
  The legislation also urges the Department of Defense to identify and 
nominate an individual to serve as the Director of Operational Test and 
Evaluation. This position has been vacant since January 2005. It is a 
critical position. This individual is the key independent personality 
in the Department of Defense to look at the testing and evaluation of 
new equipment. Without this position, the testing emphasis is woefully 
inadequate in the Department of Defense.

[[Page 11784]]

  As we put new systems into the military, we have to ensure that these 
systems are adequately tested. Without an individual with that 
responsibility and that position and posture within the Department of 
Defense, we are not providing the appropriate personality and mechanism 
to do the job.
  The bill also establishes the Joint Technology Office to coordinate 
all DOD hypersonics research programs in conjunction with NASA. The new 
office reflects an appreciation of the important role that these 
technologies can play in advanced air platforms, missile systems, and 
space systems. The committee's provision is an effort to ensure that 
millions of dollars being invested by the services and by DARPA in 
hypersonics are optimized and coordinated to enable this maturing set 
of technologies to reach operational capabilities at the highest 
possible rate and at the earliest possible time.
  The bill also extends the authority for DOD to run technology 
competitions and awards cash prices to winners. This is a provision 
that DARPA uses very effectively.
  The bill also authorizes more than $30 million in increases for 
research that supports defense manufacturing technology. A growing 
concern in the United States, in both the defense and commercial 
sector, is whether or not we have the capability to manufacture what we 
invent. This money will help us enhance our manufacturing abilities 
throughout the United States.
  There is another area of the bill that I think is very important and 
that is the area that helps us protect this country from weapons of 
mass destruction. First, the Cooperative Threat Reduction Program of 
the Department of Defense is fully funded with a budget request of $372 
million. The Cooperative Threat Reduction Program is one of the leading 
nonproliferation programs. It allows our Government to cooperate with 
other governments, principally those of the former Soviet Union, to 
reduce the availability and supply of the fissile material and 
potential access to nuclear devices.
  Also, the nonproliferation programs at the Department of Energy are 
fully funded at $1.7 billion. This funding is critical. One of the most 
obvious threats and the most grievous threats to face this country is 
the existence of nuclear weapons, particularly if they fall in the 
hands of terrorists. One very effective way to prevent this potential 
apocalypse is to ensure these weapons are fully under the control of a 
credible responsible party. In fact, in many cases we are destroying 
some of this material to prevent it from ever being used again.
  The bill also includes an important waiver for the President with 
respect to the conditions that Russia must meet for chemical weapons 
destruction programs. It is important to continue to have these 
programs go forward. This waiver gives the President flexibility to 
continue these efforts.
  In the areas of combating terrorism and homeland defense, the bill 
authorizes funding increases of about $150 million. Approximately $100 
million of these funds are being used to fund the top eight unfunded 
requirements of the Special Operations Command. We all understand each 
of the components of the Department of Defense submit their requests. 
These eight elements were not funded under the prevailing budget. Our 
legislation would provide $100 million to do that and allow our special 
operators to continue to enhance their technology and their programs.
  The increase will provide, I think, also, support for our Weapons of 
Mass Destruction Civil Support Teams. These are military teams that are 
organized in case of a weapons of mass destruction incident in the 
United States. They are critical. The original 32 teams played a key 
role. This would allow them to upgrade their equipment.
  The bill also authorizes about $70 million to fund two of Northern 
Command's highest unfunded priorities. Included among these priorities 
are interoperable communications to facilitate the support of civilian 
authorities. This is an obvious need after Hurricane Katrina. When we 
go back--I am sure my colleagues are in the same position--to our home 
States we hear a persistent cry from fire and police officials that 
they need interoperable communications to talk amongst themselves and 
to talk to other levels of command.
  The bill also creates a senior executive position within the Office 
of the Assistant Secretary for Defense for Special Operations and Low-
Intensity Conflict to provide management oversight for SOCOM's 
acquisition programs. One of the lacking elements in SOCOM's 
organization is an acquisition specialist. This bill would put in a 
person with those skills, so they can facilitate the acquisition and 
development of new technology for our Special Operations Command.
  The bill also includes an authorization for the Department of Defense 
to use counterdrug funds to support U.S. assistance to the unified 
counterdrug/counterterrorism military campaign in Colombia. Last April, 
I was in Colombia and I had the opportunity to meet with President 
Uribes. I was encouraged by what he has done and what the people of 
Colombia have done. I also visited with our military personnel and 
civilians working to help the Colombian military personnel who have 
been working to fight narcoterrorism and strengthen democratic 
governance in Colombia, and I was extremely impressed with what they 
have done since my last visit in 2000. I believe, as we support the 
Colombians in their efforts, we will make a significant contribution to 
stability in that region.
  Finally, with respect to our efforts on the Emerging Threat 
Subcommittee, I note the bill includes authorization for incentive 
clauses in some of our chemical demilitarization contracts. This 
authority is intended to provide a more efficient way to close some of 
our chemical weapons facilities and to meet international deadlines.
  All of these efforts were the result of the close cooperation of 
Senator Cornyn and the staff with respect to the Emerging Threats 
Subcommittee.
  Let me now turn to an issue of increased importance in the last few 
days and that is missile defense. We are all anxiously observing what 
is going on in North Korea--the intelligence suggesting that the North 
Koreans are preparing to launch a long-range ballistic missile.
  This bill contains language that I think recognizes a need to 
continue to develop a missile defense system and to do so in a way that 
can assure its effectiveness. The bill would authorize additional 
funding for systems that we know are working and are extremely 
valuable, including the Aegis BMD system and the Patriot/PAC-3 system. 
I note the Patriot system is our only system that has actually 
intercepted a hostile missile, and that additional support for this 
system is more than justified. I also note that the Patriot system was 
rigorously tested and was subject to operational testing before it was 
fully deployed.
  The largest single missile defense funding increase which is 
authorized by this bill is $115 million for additional integrated 
flight tests for the Ground-based Mid-course Defense system, the GMD. I 
think it is very important to focus in on operational testing of this 
system. One of the shortcomings of the whole program for developing our 
missile defense system has been a rush, in many cases, to failure, not 
taking the steps to test the system or not designing tests that are 
operationally significant. In that respect, we have spent a lot of 
money but we have yet, I think, to fully and effectively deploy the 
ground-based mid-course system.
  We have to recognize that after three successive intercept flight 
test failures, the Missile Defense Agency is taking some steps which I 
think are encouraging. They created an Independent Review Team and a 
Mission Readiness Task Force to analyze these failures and recommend 
improvements to the GMD program.
  Again, one of the persistent criticisms I had was that the system was 
rushing pell-mell forward without stopping to evaluate the mistakes 
that have been made and then planning for a thorough and exhaustive 
system of tests. Therefore, the effort was just to

[[Page 11785]]

put something in the ground, not to ensure that missile system would 
work adequately.
  MRTF, the Mission Readiness Task Force, recommended that four ground-
based interceptors be diverted from planned operational deployment--
essentially sitting in the ground being described as operational, but 
frankly I don't know anyone who would give that a high probability of 
success--to using these missiles for ground tests. I think that is a 
step forward in terms of development the system.
  These recommendations were accepted by the Missile Defense Agency and 
the Defense Department. Again, I think a recognition of a new 
pragmatism and realism on the part of the Missile Defense Agency, 
something that is more than overdue. We need more testing to ensure the 
GMD system will work, and I think the legislation we have before us 
will signal and encourage such testing.
  The bill would also include a provision that would require the 
Department to submit to Congress each test and evaluation plan approved 
by the Director of Operational Tests and Evaluation under Section 234 
of last year's National Defense Authorization Act. Again, this 
provision is designed to help improve testing and to show the emphasis 
that the Congress places on this testing.
  Finally, the bill includes a provision that would extend the 
requirement to have the GAO assess the missile defense program. The GAO 
plays a very valuable role as an outside objective observer on the 
progress of missile defense.
  We have to invest in a missile defense system, but we have to do it 
wisely. We have already seen where the effect of other budget 
priorities, principally Iraq, has even caused the administration to 
move money away from their original plans in missile defense. I believe 
we cannot afford to waste money in this regard. We have to invest it 
wisely. Part of that wise investment means having an adequate, 
thorough, exhaustive operational testing program to make steady 
progress, rather than to rush to failure.
  I would like to turn to another topic which is of concern to myself, 
and that is the shipbuilding program. Since 2001, most of the focus of 
the Department of Defense and Congress, indeed, of the Nation, has been 
on our land forces, the Army and Marines. They are engaged in combat in 
Afghanistan and Iraq and doing a magnificent job. They are bearing the 
burden of a very difficult combat situation.
  However, our Navy is still a vital element in our national defense. 
Its importance will continue to loom significant in the future. The CNO 
has stated that he needs $13.5 billion each year for at least the next 
decade to recapitalize the fleet. With this funding, the Navy must also 
build approximately 11 ships per year to maintain a 313-ship fleet.
  Mr. WARNER. Mr. President, will the Senator kindly yield for me to 
make a unanimous consent request so Senators can arrange their 
schedules?
  Mr. REED. I yield to the Senator from Virginia and will then regain 
my time.
  Mr. WARNER. This is a cleared unanimous consent request on both 
sides. I ask unanimous consent that at 11:15 the Senate proceed to a 
vote in relation to the Dorgan amendment No. 4292 and that no 
amendments be in order prior to the vote. I further ask unanimous 
consent that Senator Dorgan be recognized to speak for up to 10 minutes 
between now and the time before the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REED. As I stated, the Chief of Naval Operations indicated he 
would need approximately $13.5 billion each year for the next decade to 
recapitalize the fleet. However, the President's budget request only 
includes 7 ships in fiscal year 2007 versus the 11 that the Chief needs 
to maintain the 313-ship fleet. Seven ships in fiscal year 2008. In 
2009 the suggestion is they move up to nine ships. But those plans have 
been delayed before.
  This shipbuilding level simply cannot sustain the fleet. My greatest 
concern is with respect to the construction level of submarines. While 
many believe that the need for submarines has diminished with the end 
of the Cold War, the demand for these unique assets has never been 
greater.
  Last week I was with Senator Dodd and Senator Inouye for the 
christening of the USS Hawaii, our newest Virginia class attack 
submarine at Groton, CT. Admiral Roughhead, Commander of the Pacific 
Fleet, pointed out submarines are his most demanded asset. They are the 
one ship that is constantly requested by commanders throughout the 
Pacific to do the tasks that are necessary to defend the Nation.
  This is true in our global war on terrorism as we need the ability 
for stealthy insertion of special operations troops. We need to be able 
to recover these troops, we need to have the capacity to strike with 
precision-guided Tomahawk cruise missiles. All of these are 
capabilities of the submarine fleet.
  Back in March of 2004, Admiral Bowman, who was then the Director of 
the Navy's Nuclear Propulsion Program, suggested to me that the Navy 
was only able to meet about 65 percent of the combatant commanders' 
submarine requirements with the current fleet of 54 boats. In 2003, 
Vice Admiral Grossenbacher, then commander of the Naval Submarine 
Forces, estimated we needed 70 submarines to meet the request of all of 
the commanders. These are requests that will simply not be met if we 
drop our submarine fleet below certain limits.
  In addition, we understand that China is developing a very robust 
submarine fleet. Today, China's submarine fleet is estimated at a 
number of approximately 60 boats. In 2004 and 2005, 12 new submarines 
joined the Chinese fleet. New nuclear-missile-attack boats are coming 
on line, and China has one of the largest modern diesel submarine 
fleets in the world. Clearly, there is a need to prudently react to the 
growing underwater prowess of China.
  Presently, the U.S. Navy has 282 ships, including 54 attack 
submarines. In the fiscal year 2007 long-range plan for construction of 
naval vessels, the Navy expressed the intent to maintain 313, but only 
48 attack submarines. Recall recently there were requirements for up to 
70 submarines--at least discussion of 70 submarines--or 54 submarines; 
48 attack submarines are currently in the plan. The Navy is in danger 
of not even being able to put to sea 48 attack submarines at current 
build rate.
  Right now the Navy is currently procuring one Virginia class attack 
submarine per year, and a ninth is in the budget for this year. 
However, under the original plan drawn up by the Navy in 2003, 
production of two boats per year was supposed to begin in fiscal year 
2007. Now the procurement of two per year has been pushed back to 
fiscal year 2012.
  If the Navy is able to implement its plan and begin building two 
attack submarines per year in fiscal year 2012, the attack submarine 
fleet will still drop below 40 before it begins to increase again. If 
the 2-per-year procurement keeps getting pushed off to the left--it has 
already happened 10 times where it has been pushed back--the submarine 
force would drop as low as 28.
  I think we all agree that 28 is a number that cannot be justified in 
terms of the demand and in terms of this effort. We have to do quite a 
bit to move up the construction of two submarines per year.
  First, the report language accompanying this bill states: ``The 
Committee does not understand the continuing delays in increasing the 
[submarine] construction rate'' and directs the Secretary of the Navy 
to submit a detailed plan for lowering costs and defining goals and 
benchmarks for the Virginia class production program. I believe this 
language will help compel the Navy and the industry to redouble their 
efforts to increase the construction rate--and that is vitally 
important.
  Second, I am pleased to know that this legislation includes $65 
million for R&D for the Virginia class submarines.
  This R&D is I think critical not only to improve the capabilities of 
these ships but also to continue to engage in the design force which is 
part of the human capital in our submarine industrial base.

[[Page 11786]]

  Also, I note that the bill includes $10 million for funding to begin 
design work on the successor to the Ohio class ballistic submarine. 
This design work is essential to continue our ability to produce a 
follow-on generation of attack submarines but also ballistic 
submarines.
  I think this is absolutely critical.
  Let me turn to another point with re-
spect to our Army; that is, end strength.
  I am pleased to see that this bill authorizes an Active-Duty Army end 
strength of 512,400, which is 30,000 over the President's fiscal year 
2007 budget request.
  The act also authorizes an Active-Duty Marine Corps of 180,000, which 
is 5,000 over the President's budget request.
  I think it is important to maintain the end strength of the Army.
  I think it is a result of the efforts of Senators Lott and Talent and 
myself on the budget resolution, where we actually moved $3.7 billion 
to accomplish this.
  Let me make one final point, if I may.
  The Army end strength is a critical issue. I think we have to note, 
at this time but also at a later date continue to note, that recruiting 
is becoming a critical issue for the U.S. Army. According to the 
information I have, the U.S. Army, in the first three-quarters of the 
year, has recruited to a level of 40,000. That means in the final 
quarter the Army is going to have to recruit 40,000 soldiers to meet 
their goals. That is much higher than they have ever done in the last 
few years.
  We have a recruiting problem that is beginning to emerge.
  I will devote additional time on this subject at a later time.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. WARNER. Mr. President, I ask unanimous consent that the Senator 
from North Dakota be recognized for 10 minutes, after which time the 
Senator from Virginia be recognized for 5 minutes, and the Senate then 
vote immediately thereafter.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I thank the Senator from Virginia for his 
courtesy.
  This is a vote that we had before in the Senate. It is a vote on the 
establishment of a type of committee called a Truman Committee. The 
Truman Committee was established in the early 1940s to try to root out 
waste, fraud, and abuse in military contracting. That was done when 
there was a Democrat in the White House, a Democratically controlled 
Senate, and a Democratic Senator named Harry Truman. He decided there 
ought to be a special investigation of waste, fraud, and abuse with 
respect to military contracting. They established a bipartisan 
committee to do that. They found a massive amount of waste, fraud, and 
abuse.
  I think it is clear that perhaps the most significant amount of 
waste, fraud, and abuse that has ever occurred in this country is 
occurring right now. I think the American taxpayers are being fleeced. 
I don't think the Congress is doing nearly enough about it.
  Let me go through a couple of charts that I have shown before on the 
floor of the Senate. This is from the highest ranking procurement 
official in the Corps of Engineers, which does all the procurement for 
the Department of Defense. She lost her job. She was demoted for being 
honest.
  She said:

       I can unequivocally state that the abuse related to the 
     contracts awarded to KBR represents the most blatant and 
     improper contract abuse I have witnessed during the course of 
     my professional career.

  This from the top civilian contracting official in our Government at 
the Corps of Engineers. She is being demoted for being honest. She was 
always given the best recommendations, the highest performance 
evaluations, and when they saw that the ``old boy'' network decided to 
give big sole-source contracts, no-bid contracts and do it in a way 
that violated procurement rules, she spoke out. ``The most blatant and 
improper contract abuse'' she has ever seen.
  Let me describe one contract--the Custer Battles contract. Two guys--
Custer Battles--show up in Iraq. They know there is a lot of money. The 
American taxpayers are funding not only reconstruction of Iraq but also 
funding Army contracts. Two guys show up in Iraq with nothing. And $100 
million later, they got $100 million of the taxpayers' money for 
contracts. The first contract was to provide security at the Baghdad 
Airport. There is a criminal inquiry as a result of that.
  Here is what Bagdad Airport security said about this company, Custer 
Battles--Mr. Custer and Mr. Battles.

       Custer Battles have shown themselves to be unresponsive, 
     uncooperative, incompetent, deceitful, manipulative war 
     profiteers. Other than that, they are swell fellows.

  They received 100 million in American taxpayer dollars.
  By the way, they took the forklift trucks off the Baghdad Airport and 
put them in a warehouse. They painted them blue and then sold them back 
to the Coalition Provisional Authority--forklift trucks which didn't 
belong to them. There are now criminal proceedings about this contract. 
But this is the tip of the iceberg.
  Mr. President, I ask unanimous consent to show an item on the floor 
of the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, a man named Henry Bunting worked for KBR, 
a subsidiary of Halliburton Corporation, in the area of Kuwait where 
Henry Bunting was in charge of procurement. He had to buy things.
  Let me show the Senate what he bought. He brought this to a hearing 
we held. This is a hand towel. He was charged, on behalf of 
Halliburton's KBR subsidiary, to buy hand towels. He would order a hand 
towel for the American troops at a certain price, but his company said: 
Don't do that. We want you to have a hand towel that has the 
embroidered logo on it, the name of our company. So double the price to 
the American taxpayer for hand towels for the troops. So you have KBR 
embroidered on the hand towel.
  He says: Why should we do that? It doesn't matter. It is cost-plus. 
The American taxpayer is paying the bill. Don't worry about the cost.
  Same guy, $7,500 a month for an SUV; $45, $43 for a case of Coca 
Cola. He said: Don't worry, be happy. The taxpayer is going to pay for 
all of this. Don't worry about the cost.
  Yes, I know this towel is one small issue. But when you buy thousands 
and thousands and tens of thousands of towels and double the price so 
you can put the logo of the contractor on it because it is a cost-plus 
contract, that relates to $100 million contracts, and it relates, in my 
judgment, to billions of waste, fraud, and abuse.
  Regrettably, the Congress doesn't care enough.
  I suggest we remedy this by creating a Truman-type committee. It 
worked, it was bipartisan, and it began to root out the waste, fraud, 
and abuse that is so prevalent.
  I am not going to go through the whole list again. But let me 
describe it. If you are in the right place of the country of Iraq, you 
can stumble onto 50,000 pounds of nails, 25 tons of nails, lying in the 
sand. Why? Because somebody ordered the wrong size nails. So you throw 
them out in the sand. Doesn't matter, the American taxpayer is going to 
pay for that.
  Or you can see a brandnew $75,000 truck that was set on fire because 
it had a flat tire, and they run it off the road. They didn't have the 
capability to fix it and just left the truck. Doesn't matter, the 
American taxpayer is going to pay the bill.
  I think this is unbelievable. We have spent hundreds of billions of 
dollars at this point.
  I understand that our responsibility is to do everything we should 
do, and must do, to support the troops who are fighting in Iraq.
  We cannot send American men and women abroad wearing our country's 
uniform and not do everything that is humanly possible to provide all 
of their

[[Page 11787]]

needs, equipment needs, weapons needs, and so on. I understand that. 
That is a responsibility we have. I believe the chairman of this 
committee and the ranking member of this committee have done a great 
job. I am impressed with that.
  The one area where all of us have failed in this Congress, however, 
is oversight. We have not done the oversight. I think part of it is 
because we have one-party rule in this town--the White House and the 
House and Senate. Nobody wants to embarrass anybody. But the fact is 
there is such massive amount of money that is going out the door in 
support of these contracts--sole-source, no-bid contracts that have 
promoted waste. And nobody wants to take a second look at it. Nobody 
wants to see what is going on.
  There are whistleblowers coming forward saying this money is being 
spent. It is being spent in an unbelievable way.
  This is a slightly different picture. By the way, this is $2 million 
in $100 bills wrapped in Saran Wrap. This money actually belongs to the 
Iraqi people that was spent by us in something called the Coalition 
Provisional Authority. That was our responsibility to spend this 
appropriately. This money went to Custer Battles and is the subject of 
a criminal inquiry. This $2 million wrapped in Saran Wrap in $100 bills 
was a part of a substantial stash of cash in the basement of a building 
where they were standing.
  This particular fellow came and testified. He said: We used to throw 
these around as footballs. We wrapped up $100 bills in Saran Wrap and 
threw them as footballs in the office because the message in this 
office was this:
  You bring a bag because we pay in cash. Bring a sack. If you want 
some money, bring a sack, we pay in cash.
  The stories are unbelievable.
  The American taxpayer is going to pay to air condition a building. It 
went to a subcontractor, to another subcontractor, and then to another 
subcontractor, and pretty soon we pay the bill. The American taxpayer 
paid the bill, and that building now has a ceiling fan--not an air 
conditioner.
  What is going on is unbelievable. Yet nobody seems to care very much. 
Nobody seems to be willing to do anything. I suggest, given the 
unprecedented amount of waste, fraud, and abuse, that now is the time 
for us to decide we are going to take action. We will create a Truman 
Committee, bipartisan, and sink our teeth into this and investigate on 
behalf of the American taxpayer--investigate and expose the waste, 
fraud, and abuse.
  The fact is we turned down, regrettably, a bill which I offered 
previously that would have prevented the no-bid, sole-source, huge 
contracts going to just a couple of companies. That is one way to solve 
this problem. We should have accepted that. But notwithstanding the 
decision by the Senate to turn down that amendment, this amendment 
stands on its own.
  Are we going to decide that when the highest civilian procurement 
official in the Corps of Engineers responsible for all these contracts 
says that she can unequivocally state that the abuse related to 
contracts awarded represents the most blatant and improper contract 
abuse she has witnessed during the course of her professional career, 
are we going to decide that is serious? We are going to do something 
about it?
  I know people will say we have done this or that. The fact is we 
haven't scratched the surface--not a bit.
  It is time for the Senate to ask itself whether it is serious about 
oversight and doing the job.
  I am not standing here trying to pull the ground out from under this 
committee--or any committee. I am saying we have never spent this much 
money so quickly, never given the kind of sole-source, no-bid contracts 
that we have offered. We have never shoved money out the door as 
quickly as we have for procurement and in support of contracts for the 
troops.
  Again, let me show this towel as a small hand-towel symbol of a 
massive amount of waste, fraud, and abuse that I believe we ought to 
correct, and we ought to begin today by approving my amendment.
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. WARNER. Mr. President, I thank the Presiding Officer.
  Mr. President, I wish to say to our colleague from North Dakota that 
he feels very strongly about this issue. That comes through in the 
debate on this issue that we have had now for 3 days, on and off.
  But I bring to the attention of my colleagues that three times the 
Senate has addressed this issue and has rejected it. It is not a 
rejection in the sense that the Senator doesn't raise points that 
should be addressed to the Senate. But there is a clear record that the 
Senate is addressing these issues. The Committee on Armed Services had 
a number of hearings. The Committee on Foreign Relations had a number 
of hearings. And most importantly, the Senate is structured whereby 
issues of this type are within the jurisdiction of the Committee on 
Homeland Security and Governmental Affairs.
  In that committee, and it has been for many years, there is a 
subcommittee entitled ``The Permanent Subcommittee on Investigation'' 
with subpoena power. In the colloquy we had on the Senator's bill on 
Thursday, my distinguished colleague, Senator Levin, and I, both 
commented, since we serve on that committee--he serves on the Special 
Permanent Subcommittee on Investigations--that this is a matter we 
should take up with the chairman and ranking member of the Homeland 
Security and Governmental Affairs Committee.
  Before the Senate tries to restructure the framework of how it 
performs its work, we should focus on what is and what has been that 
framework for these many years now. It is for that reason I suggest 
strongly this amendment not be accepted. It would, in effect, be 
overruling what we are doing on the Permanent Subcommittee.
  Second, Congress should be stepping into the role that is now being 
performed by inspector generals, being performed by the General 
Accountability Office and, indeed, an inspector general specially 
designated by the Congress and the Secretary of Defense for Iraq and 
other nations.
  With that, I will not move to table this because I feel very strongly 
the Senate should address it in the same manner we have addressed it on 
previous occasions three times and rejected it.
  I ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. Sununu). Is there a sufficient second? 
There is a sufficient second.
  The yeas and nays were ordered.
  Under the previous order a vote is now to occur in relation to the 
amendment.
  Mr. LEVIN. I ask unanimous consent I be allowed 1 minute to respond 
to my good friend's comments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LEVIN. Mr. President, what we are dealing with is a historic use 
of no-bid contracts, where billions of dollars have been spent. There 
is good evidence they have been misspent in many ways, and there is a 
huge amount of waste and abuse.
  I agree with my good friend from Virginia we do have committees that 
could look into this matter and could focus on this matter. The agendas 
of those committees are left basically to the chairmen of those 
committees. If the chairmen of those committees choose to focus their 
energies in other places--and I don't quarrel with the places they 
look--it does not mean the Senate should not express its opinion on the 
need to focus on these abuses, these excesses, this expenditure of 
billions of dollars on no-bid contracts.
  Therefore, I support the Dorgan amendment.
  Mr. DORGAN. Might I ask consent to point out to my colleagues that 
Senator Harkin, Senator Durbin, and Senator Clinton are cosponsors. I 
did not mention that.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, a vote now occurs on the Dorgan amendment 
on which the yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.

[[Page 11788]]


  Mr. McCONNELL. The following Senators were necessarily absent: the 
Senator from New Mexico (Mr. Domenici) and the Senator from Alabama 
(Mr. Shelby).
  Mr. DURBIN. I announce that the Senator from Vermont (Mr. Jeffords) 
and the Senator from West Virginia (Mr. Rockefeller) are necessarily 
absent.
  The PRESIDING OFFICER (Mr. Burr). Are there any other Senators in the 
Chamber desiring to vote?
  The result was announced--yeas 44, nays 52, as follows:

                      [Rollcall Vote No. 176 Leg.]

                                YEAS--44

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Dayton
     Dodd
     Dorgan
     Durbin
     Feingold
     Feinstein
     Harkin
     Inouye
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Obama
     Pryor
     Reed
     Reid
     Salazar
     Sarbanes
     Schumer
     Stabenow
     Wyden

                                NAYS--52

     Alexander
     Allard
     Allen
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Burr
     Chambliss
     Coburn
     Cochran
     Coleman
     Collins
     Cornyn
     Craig
     Crapo
     DeMint
     DeWine
     Dole
     Ensign
     Enzi
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Isakson
     Kyl
     Lott
     Lugar
     Martinez
     McCain
     McConnell
     Murkowski
     Roberts
     Santorum
     Sessions
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Thune
     Vitter
     Voinovich
     Warner

                             NOT VOTING--4

     Domenici
     Jeffords
     Rockefeller
     Shelby
  The amendment (No. 4292) was rejected.
  (Disturbance in the Visitors' Galleries.)
  Mr. LEVIN. I move to reconsider the vote, and I move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.
  Mr. LEVIN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WARNER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Mr. President, the managers are working with our 
respective leaders on the remainder of the schedule for the next few 
hours, but in the meantime I understand our distinguished Senator from 
Iowa wishes to speak. I certainly have no objection.
  I ask unanimous consent that at 2:15 p.m., the Senate proceed to 30 
minutes of debate equally divided in the usual form relative to the 
McConnell and Nelson amendments; provided further, that following the 
use or yielding back of time, the Senate proceed to a vote in relation 
to the McConnell amendment No. 4272, as modified, to be followed by a 
vote in relation to the Nelson amendment No. 4265, and that no 
amendments be in order to the amendments prior to the votes.
  Mr. LEVIN. Reserving the right to object. Mr. President, I suggest 
the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WARNER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Mr. President, we are still getting the concurrence of 
one side on the unanimous consent request. It was my understanding it 
was cleared. I think it will eventually be cleared. In the meantime, I 
yield the floor so that our colleague from Iowa can speak.
  The PRESIDING OFFICER. The request is withdrawn. The Senator from 
Iowa.
  Mr. HARKIN. Mr. President, I thank the chairman. Any time the 
chairman needs to interrupt my remarks to seek that agreement, I will 
be more than happy to yield the floor.
  I wish to talk about an amendment I have not offered yet but I hope 
will be accepted by both sides. I will offer it, and I hope it will be 
acceptable. It has to do with the loss of some $8 billion for which we 
cannot account.
  More than 3 years into the Iraq war, we have had report after report 
documenting rampant corruption and profiteering on the part of some 
defense contractors, as well as lax oversight by governmental 
officials. A major reason this is continuing largely unchecked is that 
apparently the Department of Justice has been delaying whistleblower 
lawsuits brought under the False Claims Act, and DOJ is not pursuing 
these suits aggressively. So I filed an amendment designed to break 
this logjam by requiring the Department of Justice to report on a 
semiannual basis, every 6 months----
  Mr. WARNER. Mr. President, might I ask the Senator to yield for the 
purpose of a unanimous consent request?
  Mr. HARKIN. Certainly.
  Mr. WARNER. Mr. President, I thank the Senator from Iowa. I am 
prepared to restate the unanimous consent request.
  I ask unanimous consent that at 2:15 p.m., the Senate proceed to 30 
minutes of debate, equally divided in the usual form, relative to the 
McConnell and Nelson amendments; provided further, that following the 
use or yielding back of time, the Senate proceed to a vote on the 
McConnell amendment No. 4272, as modified--
  The modification is at the desk. Did the Chair rule on the 
modification?


                    Amendment No. 4272, as Modified

  The PRESIDING OFFICER. Without objection, the amendment is so 
modified.
  The amendment (No. 4272), as modified, is as follows:

     SEC. __. SENSE OF THE CONGRESS COMMENDING THE GOVERNMENT OF 
                   IRAQ FOR AFFIRMING ITS POSITION OF NO AMNESTY 
                   FOR TERRORISTS WHO ATTACK U.S. ARMED FORCES.

       (a) Findings.--Congress makes the following findings:
       (1) The Armed Forces of the United States and coalition 
     military forces are serving heroically in Iraq to provide all 
     the people of Iraq a better future.
       (2) The Armed Forces of the United States and coalition 
     military forces have served bravely in Iraq since the 
     beginning of military operations in March 2003.
       (3) More than 2,500 of the Armed Forces of the United 
     States and members of coalition military forces have been 
     killed and more than 18,000 injured in operations to bring 
     peace and stability to all the people of Iraq.
       (4) The National Security Advisor of Iraq affirmed that the 
     Government of Iraq will ``never give amnesty to those who 
     have killed American soldiers or Iraqi soldiers or 
     civilians.''
       (5) The National Security Advisor of Iraq thanked ``the 
     American wives and American women and American mothers for 
     the treasure and blood they have invested in this country . . 
     . of liberating 30 million people in this country . . . and 
     we are ever so grateful.''
       (b) Sense of Congress.--It is the sense of Congress that
       (1) the goal of the United States and our Coalition 
     partners has been to empower the Iraqi Nation with full 
     sovereignty thereby recognizing their freedom to exercise 
     that sovereignty. Through successive elections and difficult 
     political agreements the unity government is now in place 
     exercising that sovereignty. We must respect that exercise of 
     that sovereignty in accordance with their own wisdom;
       (2) history records that governments derived of free 
     elections should not grant amnesty to those who have 
     committed war crimes or terrorists acts, and;
       (3) the United States should continue with the historic 
     tradition of diplomatically, economically, and in a 
     humanitarian manner assisting nations and the people whom 
     have fought once a conflict is concluded.

  Mr. WARNER. To be followed by a vote on the Nelson amendment No. 
4265, and that no amendments be in order to the amendments prior to the 
votes, with the modification that is at the desk having now been acted 
upon.
  The PRESIDING OFFICER. Is there objection?
  Mr. LEVIN. Reserving the right to object, and I do not intend to 
object, did I hear that they have an opportunity to speak on their 
amendments?
  Mr. WARNER. That is correct, 30 minutes of debate equally divided.
  Mr. LEVIN. I missed that.

[[Page 11789]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WARNER. Mr. President, to accommodate the Senate, would we not at 
12:30 p.m. go into recess? Perhaps I can ask unanimous consent that at 
the conclusion--how much time does the Senator wish to speak?
  Mr. HARKIN. Mr. President, 15 minutes.
  Mr. WARNER. I ask unanimous consent that at the conclusion of the 
remarks of the Senator of Iowa, the Senate stand in recess until the 
hour of 2:15 p.m.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Iowa.
  Mr. HARKIN. Mr. President, I thank the distinguished chairman and 
ranking member.
  As I was saying, the amendment I filed is designed to break the 
logjam of what is happening at the Department of Justice delaying 
whistleblower lawsuits brought under the False Claims Act, and they are 
not pursuing these cases aggressively.
  My amendment would require the Department of Justice to report on a 
semiannual basis on the status of its efforts to respond to 
whistleblower lawsuits alleging corruption in Iraq, Afghanistan, and 
elsewhere. The Department would be required to report its findings to 
the Judiciary Committee, the Appropriations Committee, the Armed 
Services Committee, the Homeland Security and Governmental Affairs 
Committee, and the Defense Appropriations Subcommittee.
  I believe this is an important first step that would allow Congress 
to evaluate the Department of Justice efforts so we can decide what 
further steps are needed to ensure these cases are vigorously 
prosecuted.
  I am pleased that Senators Grassley, Dorgan, Durbin, Kennedy, 
Johnson, Wyden, Kerry, Lieberman, Leahy, and Lautenberg are 
cosponsoring this amendment.
  The cost of the wars in Iraq and Afghanistan has risen dramatically 
in each of the last 3 years. The Congressional Research Service reports 
we are now spending about $6.4 billion a month in Iraq alone. That is 
about $9 million an hour of spending in Iraq--$9 million an hour. One 
of the reasons for these runaway costs is the widespread corruption in 
the contracting process: shoddy work, nonwork, theft, fraud, kickbacks, 
bribes, insider dealings, inflated billings, and on and on.
  There have been many reports in the press about this wave of 
corruption. The Wall Street Journal reported earlier this year about 
the problem. Our former inspector general in Baghdad, Stuart Bowen, 
concluded that U.S. occupation authorities accounted poorly for $8.8 
billion in funds dedicated to Iraqi reconstruction from the Development 
Fund for Iraq. He stated this $8.8 billion is lost--lost. The Inspector 
General Stuart Bowen said, ``The Coalition Provisional Authority did 
not implement adequate financial controls.''
  I ask unanimous consent that the April 19, 2006 article in the Wall 
Street Journal by Yochi J. Breazen be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Apr. 19, 2006]

           Contractor Admits Bribing a U.S. Official in Iraq


  lawyer uses civil war-era law to go after firms for corruption, but 
                       administration won't help

                         (By Yochi J. Dreazen)

       Orlando.--From his home office in a pink-painted mansion 
     here, lawyer Alan Grayson is waging a one-man war against 
     contractor fraud in Iraq.
       Mr. Grayson has filed dozens of lawsuits against Iraq 
     contractors on behalf of corporate whistle-blowers. He won a 
     huge victory last month when a federal jury in Virginia 
     ordered a security firm called Custer Battles LLC to return 
     $10 million in ill-gotten funds to the government. The ruling 
     marked the first time an American firm was held responsible 
     for financial impropriaties in Iraq. But it also highlighted 
     the limits of the broader efforts to stem contractor abuses 
     there.
       The False Claims Act that Mr. Grayson used in the Custer 
     Battles case is a Civil War-era statute allowing whistle-
     blowers to sue contractors suspected of defrauding the 
     government and then keep a chunk of any recovered money. 
     There are an estimated 50 such cases pending against Iraq 
     contractors, including large firms like Halliburton Co.'s 
     Kellogg Brown and Root subsidiary. A technicality in the 
     statute, however, has allowed the Bush administration to 
     prevent the other lawsuits from moving forward. Cases filed 
     under the statute are automatically sealed, which means that 
     they can't proceed to trial--or even he publicly disclosed--
     until the administration makes a formal decision about 
     whether to join them.
       The law says such decisions are supposed to be made within 
     60 days, but with the exception of the Custer Battles case, 
     which it declined to join, the administration has yet to take 
     a position on any other suits, some of which were filed more 
     than two years ago. The law allows the Justice Department to 
     ask for extensions, which are almost always granted, for as 
     long as it sees fit. The department has kept the other False 
     Claims Act cases from proceeding by repeatedly asking for 
     extensions in each one.
       That has left the cases in legal limbo, with lawyers like 
     Mr. Grayson unable to bring them to trial or detail them 
     publicly.
       Contracting experts says previous administrations often 
     declined to join the False Claims Act lawsuits but that the 
     Bush administration's refusal to unseal the cases is 
     unprecedented. Justice Department spokesman Charles Wilson 
     says he can't discuss sealed cases or comment on why the 
     department has yet to act on them. ``All of the cases are 
     examined on their merits,'' Mr. Wilson says. With the Bush 
     administration sitting on the sidelines, primary 
     responsibility for pursuing the Iraq fraud cases rests with 
     plaintiffs' lawyers like Mr. Grayson, a Harvard-educated 
     lawyer who began his career defending federal contractors but 
     now makes his living going after them.
       ``With the sheriff asleep in the office, the only way you 
     get justice is with private lawyers like Alan Grayson willing 
     to step up and take down these fraudulent companies,'' says 
     Patrick Burns, the spokesman for the advocacy group Taxpayers 
     Against Fraud. ``Alan Grayson showed that you can do that 
     even without help from the government.''
       Though it is unclear when the cases will proceed to trial, 
     Mr. Grayson is continuing to press ahead as best he can. He 
     and other lawyers in his firm travel the country taking 
     depositions, gathering documents and interviewing prospective 
     witnesses for the dozens of currently pending lawsuits. Mr. 
     Grayson says he also regularly passes information to the 
     federal investigators probing the cases and the prosecutors 
     deciding whether the government will participate in them.
       A fierce critic of the war in Iraq, Mr. Grayson drives an 
     aging Cadillac emblazoned with antiadministration bumper 
     stickers such as ``Bush Lied, People Died, ``He says the 
     administration's botched handling of Iraq opened the door for 
     corrupt contractors to improperly reap fortunes there. At a 
     hearing in February 2005 held by Democratic senators, Mr. 
     Grayson asserted that the administration had ``not lifted a 
     finger to recover tens of millions of dollars our whistle-
     blowers allege was stolen from the government.''
       His opinions on the matter haven't shifted since. ``The 
     Bush administration has made a conscious decision to sweep 
     the cases under the rug for as long as possible,'' he says 
     today. ``And the more bad news that comes out of Iraq, the 
     more motivation they have to do so.''
       For the contractors in his cross hairs, Mr. Grayson, 48, is 
     a formidable opponent. He received his undergraduate, 
     master's and law degrees from Harvard. He made millions 
     during a two-year stint as the president of IDT Corp., a 
     start-up that has since grown into one of the nation's 
     largest providers of discount telecommunications services. 
     Mr. Grayson says he has poured hundreds of thousands of 
     personal funds into his small eight-person law firm to help 
     defray the cost of pursuing Iraq fraud cases that may not 
     make it to trial for years. ``I have deep enough pockets to 
     subsidize the legal work,'' he says.
       If he prevails, he might fill those deep pockets. Whistle-
     blowers generally receive 30% of any penalty, although the 
     exact portion of every award is set by the judge in each 
     case. Lawyers like Mr. Grayson, in turn, receive 30% to 50% 
     of whatever the whistle-blowers get. ``It's really a 
     financial crapshoot,'' he says.
       Mr. Grayson's firm switched its focus from working for 
     contractors to representing individual whistle-blowers 
     shortly after U.S. forces swept into Iraq in March 2003. He 
     says the firm made the move because they began to be 
     contacted by whistle-blowers who were referred by former 
     clients and others.
       Two of his first clients were William D. Baldwin, a former 
     manager for Custer Battles, and Robert J. Isakson, a 
     construction subcontractor who had worked with the firm. The 
     company, run by a pair of politically connected military 
     veterans, had won security contracts in Iraq worth more than 
     $100 million. But the two men told Mr. Grayson that they had 
     evidence the firm was substantially overcharging the U.S. 
     occupation authority.
       Mr. Grayson filed suit against the company under the False 
     Claims Act in February 2004, but it languished under seal 
     until that fall, when the Justice Department formally 
     declined to join the case. The government

[[Page 11790]]

     never explained its decision. The case finally went before a 
     judge in February.
       After a contentious three-week trial, a federal jury on 
     March 9 found the company's two founders, along with a 
     business partner, guilty of using fake invoices from shell 
     companies to overcharge the authorities by millions of 
     dollars. The jury ordered the men to pay $10 million in 
     penalties, with Mr. Grayson's clients standing to receive 
     about $3 million of the money. Mr. Grayson declined to say 
     how much money he will be paid. David Douglass, a lawyer for 
     Custer Battles, says the company has appealed the verdict.
       While waiting for the government to act on the other 
     lawsuits, Mr. Grayson is weighing a career change. HIs 
     congressional district is represented by a conservative 
     Republican, and Mr. Grayson is strongly considering seeking 
     the Democratic nomination to oppose him. He says his 
     campaign, if he chooses to run, would center on the war in 
     Iraq.
                                  ____



  plea deal shows how businessman rigged bids for rebuilding hillah; 
                   `considered it a free-fraud zone'

                         (By Yochi J. Dreazen)

       In January 2004, Robert Stein, a senior U.S. contracting 
     official in Iraq, sent an unusual email to American 
     businessman Philip Bloom.
       Mr. Stein wrote that he arranged for a new set of lucrative 
     rebuilding contracts to be awarded to Mr. Bloom, but wanted 
     the businessman to send his bid on the letterhead of a fake 
     company to avoid attracting attention in Baghdad. A few days 
     later, Mr. Bloom replied that he would ``bring with me the 
     dummies . . . I have five dummies per bid.''
       The emails illustrate how closely U.S. officials on active 
     duty, like Mr. Stein, were willing to work with Mr. Bloom to 
     help him defraud the government through a massive bid-rigging 
     scheme in southern Iraq. They were released yesterday as part 
     of a guilty plea from Mr. Bloom, who admitted to steering $2 
     million in cash and other bribes to government officials in 
     exchange for $8.6 million in Iraqi construction and 
     demolition contracts. Mr. Bloom--who also admitted to 
     providing the officials with jewelry, first-class plane 
     tickets and sexual favors from women he employed at a villa 
     in Baghdad--faces as long as 40 years in prison and nearly $8 
     million in penalties.
       The plea to charges of conspiracy, bribery and money 
     laundering is the latest to emerge from an investigation into 
     alleged corruption by American officials in Hillah, a restive 
     southern city. Mr. Stein, a former civilian occupation 
     official charged with overseeing $82 million in rebuilding 
     funds there, pleaded guilty on Feb. 2 to conspiracy, bribery 
     and using stolen government money to purchase an array of 
     high-powered rifles and grenade launders.
       Lt. Col. Michael Wheeler and Lt. Col. Debra Harrison, who 
     both worked in Hillah, were arrested late last year and 
     charged with similar offenses; both are free on bond. Lt. 
     Col. Wheeler's attorney didn't return a call; Lt. Col. 
     Harrison declined to comment. Three other military officials 
     are mentioned in the court papers, and law enforcement 
     authorities say more arrests are likely. ``There was no 
     oversight anywhere near them at the time and they did not 
     believe they would be caught,'' says Special Inspector 
     General for Iraq Reconstruction Stuart Bowen, whose 
     investigators uncovered the ring. ``They considered if a 
     free-fraud zone.''
       A variety of reports of congressional investigators and the 
     special inspector general for Iraq reconstruction have found 
     evidence that hundreds of millions of dollars were spent 
     without proper authorization, given to contractors who 
     performed shoddy work or paid to firms charging unreasonably 
     high prices. Large sums of money remain unaccounted for, and 
     auditors say they have little sense yet of how much may have 
     been stolen.
       Previous court filings had detailed the broad outlines of 
     the conspiracy, which continued for almost two years. Mr. 
     Stein and the military officials submitted fake bids from 
     dummy companies for contracts that Mr. Bloom was seeking and 
     then awarded him the work as the low bidder. To evade 
     scrutiny, Mr. Stein--who had the authority to award contracts 
     of as much as $500,000--typically awarded contracts to Mr. 
     Bloom in amounts of as much as $498,900.
       The new plea offered new evidence of how closely the two 
     men worked. In a separate series of early 2004 emails, Mr. 
     Stein warned the businessman that another U.S. official in 
     Hillah would demand a ``cut'' if he knew about the bid-
     rigging arrangements. ``The fewer people who know what we are 
     doing the better,'' Mr. Stein wrote. ``I am your partner as 
     you put it so trust in me and what I feel.''
       Mr. Bloom seemed willing to make Mr. Stein his partner in a 
     formal sense as well, In a Feb. 18, 2004, email, Mr. Bloom 
     told one of his employees that Mr. Stein was the ``vice 
     president of operations'' for the company and should get 
     whatever assistance he asked for. Mr. Stein, then a serving 
     government official, sent a note back asking that the firm's 
     business cards spell his name as Robert because ``it sounds a 
     bit better than `Bob.'''
       Mr. Stein, 50, who faces formal sentencing next month, 
     could receive a prison sentence of as long as 30 years, 
     although he is likely to receive far less because of his 
     cooperation with prosecutors.
       No sentencing hearing has been set yet for Mr. Bloom, 65. 
     He had pleaded guilty in February and been cooperating with 
     prosecutors ever since, although the plea was only unsealed 
     Tuesday. John Nassikas, an attorney for Mr. Bloom, said he 
     had filed court papers asking for home detention during the 
     course of his dealings with the government and hopes Mr. 
     Bloom's ultimate sentence would be reduced because of his 
     cooperation.

  Mr. HARKIN. This has had an extremely negative impact on our work in 
Iraq. This fund was responsible for paying the salaries of hundreds of 
thousands of government employees, such as teachers, health workers, 
and government administrators; it supported the Iraqi defense and 
police forces; and it helped repair Iraq's dilapidated infrastructure. 
So the loss of $8.8 billion hurts our mission in Iraq.
  There is real urgency to the spending issue. On Meet the Press 
recently, we heard from retired GEN Barry McCaffrey, who just returned 
from Iraq and who only last week advised the President and his national 
security team at the White House on the situation in Iraq. He spoke 
about the importance of spending our resources efficiently on Iraq 
economic reconstruction. General McCaffrey said:

       Unemployment is a bigger problem than the Iraqi insurgent 
     force. We spent $18 billion on economic reconstruction. There 
     is only $1.6 billion left in the pipeline. When the money 
     runs out, in my judgment, we just lost the war.

  But money on a massive scale--$8.8 billion, as the inspector general 
has said--has been ``lost into thin air.'' We can't account for it. 
While this was not all U.S. money, it symbolizes the magnitude of the 
corruption we are facing. We don't know where it has gone. Imagine the 
critical things we could have done with that $8.8 billion to help win 
the hearts and minds of the Iraqi people. This chart shows what the 
Iraqi Relief and Reconstruction Fund goes for. I won't read them all, 
but obviously security and law enforcement, the electric sector--they 
are getting less electricity now than they did before the war started--
oil infrastructure, water resources and sanitation, roads and bridges, 
health care, education; all of these things, $8.8 billion could have 
gone for, but it didn't go for that. Where did it go? Well, we just 
don't know.
  The State Department's own numbers for this Iraq Relief and 
Reconstruction Fund tell us they believe a lot can be done with this 
amount of money. It could have paid for all of the security and law 
enforcement training. It could have paid for all of the electric sector 
programs. The waste of billions of dollars is bad enough, but the 
widespread corruption is impeding our war effort; it is slowing 
reconstruction efforts; it is denying our troops in the field the 
quality support and equipment they deserve.
  Just imagine how we could have utilized $8.8 billion to help our 
military in the field. When our administration loses $8.8 billion that 
was to have gone for reconstruction, then we have to replace that money 
with our money. The reconstruction is taking place. If we don't restore 
the unaccounted for money, no other country will. So we have to 
appropriate U.S. taxpayer dollars to fill the void. Let me repeat that. 
By this loss of $8.8 billion, if we don't account for it and somehow 
recoup it, the reconstruction effort going forward will be made up by 
taxpayers' dollars, our taxpayers' dollars.
  Aside from that, how could we have used $8.8 billion to support our 
own troops? Well, let's take a look at this. Here is the $8.8 billion 
that we have lost. Equipment maintenance, about $3.2 billion; billeting 
of soldiers, $2.4 billion; body armor, $1.9 billion; special pay for 
hostile fire pay, family separation allowances, hardship duty pay, $1.3 
billion. All of it could have been done with the $8.8 billion that is 
lost. Let me repeat: $8.8 billion lost. It is not just a loss to our 
Treasury and the taxpayers, it is as well a loss to our ability to keep 
our own troops sustained.
  The single most important legal tool that American taxpayers have to 
recover funds stolen through fraud by U.S. contractors is the False 
Claims Act. Indeed, thanks to this law, more than $17 billion has been 
recovered on

[[Page 11791]]

behalf of the American taxpayer. Under the False Claims Act, 
whistleblowers are given a powerful incentive to come forward and 
expose instances of fraud. The statute allows them to sue contractors 
suspected of defrauding the government, and then they can keep a 
portion of the recovered funds as a reward.
  But there is a problem--a big problem. Scores of lawsuits have been 
brought against contractors suspected of fraud in Iraq and Afghanistan, 
including--and I will have more to say about this in a minute--a 
Halliburton subsidiary, Kellogg, Brown, & Root. Yet the Department of 
Justice has allowed only one of those suits to go forward in the 
courts, and that lawsuit resulted in a major recovery of fraudulently 
collected payments.
  Given the massive amount of missing money, you would think that more 
than just one lawsuit has been filed against corporate contractors. To 
be sure, there are many more legitimate cases out there. Since 2003, 
the Special Inspector General for Iraqi Reconstruction, the U.S. Army 
Audit Agency, and the Defense Contract Audit Agency have all uncovered 
contracting abuses related to the conflict in Iraq. Auditors of the 
Defense Contract Audit Agency have found that Halliburton has charged 
$1.4 billion in questionable and undocumented costs on just two 
contracts. The auditors found $813 million in questioned costs under 
Halliburton's Logistic Civil Augmentation Program contract to provide 
support services to the troops. So here are two, right here: $813 
million in ``questioned costs'' on Halliburton's--what they call the 
LOGCAP contract, that is for Logistic Civil Augmentation Program; and 
$382 million in ``unsupported costs.'' That is $1.195 billion just to 
one company. That is Halliburton. That is Halliburton in ``questioned 
costs.''
  The auditors at the agency challenged most of these costs as 
``unreasonable in amount'' after completing the audit action because 
the costs ``exceeded that which would be incurred by a prudent 
person.'' The auditors also found an additional $442 million in 
Halliburton's charges are ``unsupported.'' As a result, Halliburton's 
total ``questioned'' and ``unsupported'' costs exceed $1.4 billion.
  So if you look here at the audits of Halliburton's Iraq contracts, 
the ``questioned costs,'' the ``unsupported costs'' under these two 
contracts, LOGCAP and RIO, if you add them up, combined it is $1.47 
billion.
  What is being done about this? Nothing. Nothing. The Department of 
Justice is doing nothing.
  There are numerous reports from former top Army contracting 
officials, from former DOD officials, from soldiers on the ground, and 
from former Halliburton and Kellogg, Brown & Root employees as to that 
company's waste, fraud, and abuse--numerous reports. There are reports 
that Halliburton charged for meals never served, that Halliburton 
overcharged for oil and oil delivery, that Halliburton overcharged and 
double-charged for shipments of soda pop, that Halliburton overcharged 
on transportation contracts. I could go on and on.
  But for reasons that I cannot fathom, the Department of Justice has 
not told Congress or the American taxpayer what it is doing to bring 
these cases to justice. And it seems as though nothing is being done.
  I believe we have an obligation to the American taxpayer to be 
protected against theft or misuse of tax dollars by corrupt 
contractors. Yet there is no evidence the Justice Department is doing 
anything about it. So absent this information, I can only conclude that 
nothing is being done about this corruption. If this is the case, then 
the recovery of perhaps billions of dollars in taxpayer money is being 
blocked.
  While Congress and the American taxpayer remain in the dark about 
what the Justice Department is doing to combat contract corruption, 
False Claims Act cases continue to languish. The way it works is that 
the False Claims Act cases are automatically sealed. They cannot go to 
trial; they cannot be publicly disclosed until the Department of 
Justice makes a decision of whether to join them. Under the statute, 
these decisions are supposed to be made within 60 days. However, the 
Department of Justice is allowed to seek additional time where needed. 
This is appropriate because a lot of times these cases are very complex 
and require extensive investigation. However, these extensions cannot 
be allowed to become a form of indefinite delay, stretching out year 
after year after year. And I fear that is exactly what is happening. As 
I said, with just one exception, the Department of Justice has refused 
to take a position on any of the lawsuits related to Iraq and 
Afghanistan, some of which were filed over 3 years ago. Instead, the 
Department files for and receives indefinite extensions.
  As a result, as I said, with one exception, every single 
whistleblower lawsuit has been effectively blocked by the Department of 
Justice. Fraud has gone unpunished, billions of taxpayer dollars 
continue to be squandered, and courageous whistleblowers who have come 
forward, often at great personal risk, have been left in a sort of 
legal limbo. As one attorney representing a whistleblower put it:

       The Bush administration has made a conscious decision to 
     sweep the cases under the rug for as long as possible. And 
     the more bad news that comes out of Iraq, the more motivation 
     they have to do so.

  This situation is unacceptable. So my amendment would therefore 
require the Justice Department to report to Congress on a semiannual 
basis the efforts it is undertaking to ensure that it is investigating 
in a timely and appropriate manner all claims of contractor waste, 
fraud, and abuse related to the U.S. Government's activities in Iraq 
and Afghanistan. It would require the Department of Justice to report 
on similar executive branch interagency efforts. My amendment would 
prevent the Department of Justice from imposing undue secrecy on false 
claims civil actions related to Government spending in Iraq and 
Afghanistan by simply requiring the Department of Justice to tell 
Congress what it is doing to combat this corruption. Sharing this 
information with Congress is nothing out of the ordinary, but it is 
long past due. As a matter of good faith to our troops and to the 
American taxpayer, we need to move aggressively against corruption and 
war profiteering in Iraq, Afghanistan, and elsewhere. These cases have 
gone on too long.
  In closing, I quote the British philosopher John Stuart Mill who 
said: ``The proper office of a representative assembly is to watch and 
control the government.''
  Mr. President, hopefully this is a nonpartisan amendment. It is all 
about enabling Congress to provide meaningful oversight of executive 
branch activity consistent with our duty to do so under the 
Constitution and the law. It will enable Congress to know the 
administration's plans for rooting out contractor corruption in Iraq, 
Afghanistan, and elsewhere, and I urge my colleagues to support the 
amendment.
  Mr. President, I yield the floor.

                          ____________________