[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[Senate]
[Pages 7026-7027]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          CONTRACTING IN IRAQ

  Mr. DORGAN. Mr. President, I wanted to discuss two things today. One 
is a hearing I have just concluded of our policy committee, and then I 
want to talk about the price of gasoline and oil.
  Let me talk first about the hearing I just concluded of the 
Democratic policy committee. It is the 13th hearing I have done on the 
issue of contracting in Iraq and Afghanistan, especially waste, fraud, 
and abuse of contracting in Iraq. I have held a good many hearings. I 
am not easily surprised any longer about what I hear at these hearings 
of the unbelievable waste and fraud and abuse in Government 
contracting, where American taxpayers are being fleeced and where our 
soldiers are being disserved by waste and fraud and abuse.
  I do get surprised, even though I say it is hard to surprise me. 
Today I hear about the stealing of artwork and rugs and crystal, the 
stealing of gold in Iraq in some of the palaces by contract employees, 
the stealing of gold and melting down of gold to make spurs for cowboy 
boots--something I hadn't heard before--the charging of a 100-percent 
markup on a little thing like a laptop computer. There is testimony 
today of the purchase of 300 laptops to be delivered to DynCorp in 
Iraq. They were purchased for $1,400 apiece, and then the Government is 
charged $2,800. That is a 100-percent markup.
  A witness told us that a colleague of his was killed in a car in Iraq 
in a high-risk area. He was on an official assignment in an unarmored 
car and that car was hit with an ambush and he lost his life. He said 
that colleague should have been in the armored car, but the armored car 
was being used to transport prostitutes from Kuwait back to Baghdad for 
the enjoyment of this particular contractor's employees. So I

[[Page 7027]]

say, I try not to be surprised, but the depth of incompetence and waste 
and fraud and abuse in contracting in Iraq is unbelievable.
  I started the hearing today by describing again, as I have a couple 
of times, a piece of work done by the New York Times that I wish 
perhaps would have been done by the Pentagon or by the Congress in 
terms of oversight.
  This is Efraim Diveroli, the CEO of a firm awarded $300 million in a 
contract by the Pentagon to arm the Afghani fighters. Our Pentagon 
wanted to provide weapons and ammunition to the Afghan fighters, a 
perfectly reasonable thing to do because they are taking on the Taliban 
and al-Qaida in Afghanistan. To arm the Afghan fighters, they 
contracted with a company who had a 22-year-old CEO. This company was 
largely a shell company established by this young 22-year-old's father. 
It had been an inactive shell company, but now it is behind an unmarked 
door in Miami Beach, FL. So a 22-year-old CEO gets a contract with the 
Pentagon. His 25-year-old vice president is a massage therapist, a 
masseur. So you have a 22-year-old and a 25-year-old massage therapist 
running a company, and they get, we are told, a third of a billion 
dollars in contracts from the Pentagon.
  By the way, the contracts were to provide ammunition to the Afghan 
fighters. Here is a photograph, again, crediting the New York Times. It 
is first-rate reporting by three reporters. Here is an example of what 
they shipped to the Afghan fighters, ammunition including 40-year-old, 
Chinese-made cartridges, and the pictures of what the Afghan fighters 
received from this $300 million contract--boxes taped up, bulging at 
the seams and bursting at the side with bad ammunition. It is 
unbelievable.
  The question is, How is it the Army Sustainment Command in Illinois 
provided a $300 million contract to a company that had a 22-year-old 
president of a company that used to be a shell company for most of its 
existence and a 25-year-old massage therapist as a vice president and 
they run off with a third of a billion dollars of the Pentagon's money?
  Actually, the taxpayers' money, isn't it? So who is going to answer 
to that?
  After the New York Times did their story, the Pentagon then suspended 
this contract. But my understanding from a discussion with a high-
ranking Army official in the last week or so, that high-ranking Army 
official was saying privately: No, the contracting with that company 
was perfectly logical and legitimate. It is just that the goods that 
were provided the Afghanis didn't meet standards.
  You tell me how a general in charge of this kind of contracting can 
decide to take what had been a shell company and give a 22-year-old and 
a 25-year-old masseur a third of a billion dollars. You justify that to 
the American taxpayer. It is not going to happen. That cannot be 
justified.
  It is long past the time for this Congress to do something about it. 
We now have a very large urgent supplemental appropriations request in 
front of Congress. How much of that money is for this purpose? How many 
of those contracts would be as embarrassing as this contract? How many 
of those contracts will go to allow the kinds of things I heard for 2 
hours this afternoon at a hearing I just held in the Dirksen Building? 
When are we going to have some feeling that some of this stuff is going 
to be straightened out?
  I have described before what we should do about it. Some of my 
colleagues have put in place a piece of legislation called the Truman 
Commission. I fully support that. But that is a commission of people 
outside of our Government that will study and make recommendations on 
Government contracting. It is a good thing to do. I fully support it, 
but the President is not implementing that commission, despite the fact 
it was passed into law. But what we really should do as well, because 
you cannot delegate accountability for this, we really need what is 
called a Truman committee. That is a committee, a select committee, 
bipartisan committee in the Senate similar to the Truman committee of 
the 1940s. Harry S. Truman created a bipartisan select committee in the 
Senate. It cost $15,000 at the start of the Second World War.
  They held 60 hearings a year. It was bipartisan. It had subpoena 
power. With a $15,000 cost as they started it, it saved the American 
taxpayers $15 billion. This Congress needs a Truman committee. Three 
times we have voted on it. Three times the minority voted against it. 
Because it takes 60 votes, we do not now have a Truman committee.
  In nearly every other major war, every other conflict, we have had 
some kind of select committee to do the kind of oversight, to provide 
the focus on the waste and fraud and abuse. But that has not been the 
case now. We need to fix that. We need to make that happen. We have 
voted on it three times, and we will be voting again because the 
American taxpayers deserve that kind of oversight, that kind of 
accountability, and so, too, do the America soldiers who are being 
disserved by this waste, fraud, and abuse.

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