[FoRK] $3B headache, and obstruction of justice
jbone at place.org
jbone at place.org
Wed Feb 11 20:37:34 PST 2004
Two quick bits:
A $3 billion headache for Bush
National security and taxation are two of George W. Bush's favorite
subjects, so he should take great interest in a new federal report that
examines more than 27,000 Pentagon contractors and how they came to owe
the federal government some $3 billion in unpaid taxes.
The report will be the topic of hearings Thursday before the Senate
Governmental Affairs Committee. It also may be a focus for Bush's
Democratic opponents, who will no doubt see the report's findings as
new evidence the Bush Administration and its Department of Defense is
too cozy with the defense industry.
The report is called "FINANCIAL MANAGEMENT: Some DOD Contractors Abuse
the Federal Tax System with Little Consequence." In it, investigators
from the non-partisan General Accounting Office cite "numerous
instances of abusive or potentially criminal activities." In one
example, a small Custodial Services contractor, which had received
nearly $12 million in Pentagon money, proved to be almost a million
dollars short in its tax filings; the business was also "linked to
potential check fraud." Some contractors owed the government back taxes
dating from the 1980s.
The tax abuses are apparently part of a pattern, documented by Salon in
2002, that proves the Pentagon simply can't keep track of its money,
its troop supplies or other critical resources. Over decades, the
Pentagon accounting system has devolved into a morass, with
inefficiency and corruption the inevitable result. As a result of
accounting problems and "longstanding problems at IRS," the new report
says, the Pentagon often makes "minimal or no actual [tax]
The Defense Department controls nearly two-thirds of all federal
contracts, but there is no law that explicitly bars the military from
hiring deadbeats. Still, as the report notes, "paying billions of
dollars to DOD contractors that at the same time have substantial
unpaid taxes is not sound business practice."
-- Raffi Khatchadourian
[17:09 PST, Feb. 11, 2004]
Obstruction of justice?
As the Justice Department continues its probe into the White House leak
of CIA agent Valerie Plame's identity, two senior congressional
Democrats want to know why some Bush staffers are hindering that
process -- and defying the president's direct order to cooperate with
investigators. In a letter sent to the White House on Tuesday, Rep.
Henry Waxman, D-Calif., and Rep. John Conyers, D-Mich., warn the
president against any further actions that would compromise the
investigation, and thereby U.S. national security. Noting that the
Justice Department asked White House officials in January to sign
waivers that would allow members of the media involved in the case to
speak freely with investigators, Waxman and Conyers are troubled that
most of those officials, according to a Washington Post report on
Tuesday, declined to sign the form on the advice of their attorneys.
"These actions directly contradict your explicit direction to cooperate
fully with the investigation," the congressmen wrote to President Bush.
"When asked about this waiver issue on January 5, White House spokesman
Scott McClellan affirmed eight different times that you instructed your
staff to comply fully with the Justice Department requests."
While acknowledging an individual's Fifth Amendment protection against
self-incrimination, the two legislators remind the president that
national security is a unique matter: "There is no constitutional right
to have access to classified information or to be entrusted with the
nation's most sensitive security secrets. Individuals who receive
access to the country's most critical and highly-guarded secrets have
an obligation to cooperate fully in investigations into security
And individuals who intentionally leak a covert agent's identity have
an obligation to do jail time: Under the Intelligence Identities
Protection Act, it's a felony to make such a disclosure.
For now, the Bush administration, with its penchant for secrecy,
appears to be doing what it can to forestall a full uncovering of the
Plame case -- just as it's scrambling to contain the Iraqi WMD scandal
beginning to boil over. But the million-dollar question seems to be: To
what degree does Bush's intelligence quagmire hurt his reelection
prospects? While much anger has been aired over the administration's
unethical if not illegal actions on the intelligence front -- much of
it partisan criticism but plenty coming from Bush's own supporters --
polls consistently show that voters' biggest concerns, at least in the
Democratic primaries, are domestic, with the economy and healthcare
still topping the list.
-- Mark Follman
[05:37 PST, Feb. 11, 2004]
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