This week, two news stories came out that highlight an ongoing problem, and one which apparently the Bush administration does not consider it necessary to do anything about.
The first, was when it turned out that September 11 funds, appropriated by Congress to be given to banks for the purpose of making low interest loans to businesses victimized by the September 11 terrorist attacks, were found to have been loaned to businesses all over the country, and as diverse as a liquor store, pizza joint and hair salon in Iowa and a smoothie maker, an auto repair shop and a dentist in Colorado. The culprit? Well, according to the second article,
the AP review suggests that there was little oversight over who was getting the money and that banks had financial incentive to make as many loans as possible..
From the first article,
Mike Schlueter, owner of Brewski's Beverage, a liquor store in Council Bluffs, got a $544,000 STAR loan in the fall of 2002 when he purchased the business from its previous owners. He said he never knew the money was linked to terrorism relief..."I didn't even know. The bankers were the ones that dealt with everything," he said. "I completely relied on the bank for the funding."
The money was just given to the banks, and the government just assumed that it would be used to help businesses hurt by terrorism.
More recently, the work performed in Iraq by companies such as Bechtel and Fluor, politically well connected companies given no-bid contracts for work in Iraq, is coming under scrutiny. For example, Fluor and Bechtel were among firms accused of fraud and abuse in Iraq.
According to Peter W. Singer, a former Pentagon official interviewed in this article, the onus for the fraud and financial irregularities should not be on the companies themselves, but on the government.
"it's not the company's fault if it has a dumb client. I'm not blaming the companies, I'm blaming the government," said Singer, now a fellow at the Brookings Institution, a Washington think tank.
The contracts are legal because the Bush administration repealed regulations put in place by the Clinton administration that would have allowed officials to bar new government work for companies convicted or penalized during the previous three years. Of course, companies like Bechtel (six violations the past ten years) and Fluor (fifteen violations) would have been barred had Bush not changed the law.
Now, we see that these same two firms have been awarded no-bid contracts for rebuilding Katrina work.
Keeping in mind that because the President's invocation of an exception to the Davis-Bacon act allows contractors to pay below prevailing rates, this no-bid contract holds an even sweeter cherry-- for the contractors.
We see what the problem is. Repeat violators continuing to rip off the government at every turn. The claim that Katrina relief had to be expedited, which justifies the no-bid contracts is true in some areas, but not in construction since it will take several weeks before the city is decontaminated and otherwise made habitable. This is plenty of time to put out a contract for bid.
Is the culprit a lack of people to provide adequate oversight, is it that the people are there but are providing incompetent oversight, or is it that this administration looks the other way on corporate fraud because they don't consider it a serious problem or they refuse to believe that a large corporation might break the law, or that it isn't such a big deal if they do?