Penalized companies hired in Iraq

Censured firms have won $7 billion in federal contracts

The Associated Press

WASHINGTON — Ten companies working to rebuild Iraq have paid more than $300 million in penalties since 2000 for alleged bid rigging, fraud, delivery of faulty military parts and environmental damage.

The United States is paying more than $780 million to one British firm that was convicted of fraud on three federal construction projects and banned from U.S. government work in 2002, according to an Associated Press review of government documents.

A Virginia company convicted of rigging bids for American-funded projects in Egypt also has been awarded Iraq contracts worth hundreds of millions of dollars. A third firm found guilty of environmental violations and bid rigging won U.S. Army approval for a subcontract to clean up an Iraqi harbor.

Seven other companies with Iraq reconstruction contracts have agreed to pay financial penalties without admitting wrongdoing. Together, the 10 companies have paid to resolve 30 alleged violations in the past four years. Six paid penalties more than once. The companies have received Iraq reconstruction contracts worth $7 billion.

The contracts are legal because the Bush administration repealed regulations put in place by the Clinton administration that would have allowed officials to bar new government work for companies convicted or penalized in the previous three years.

Spokesmen for the companies defended the contracts, saying the penalties were often for violations committed years ago or were imposed on subsidiaries unrelated to ones working in Iraq.

Federal regulations require government contractors to have a “satisfactory record of integrity and business ethics.” The government can ban unethical companies from getting new contracts through a process called debarment.

From: http://www.kansascity.com/mld/kansascity/news/nation/8526009.htm