Monday, June 16, 2008

Qui Tam

Major General Smedley D. Butler, USMC, in his jeremiad War is a Racket writes about war-time profiteering:

The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits – ah! that is another matter – twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent – the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let's get it.


Of course, it isn't put that crudely in war time. It is dressed into speeches about patriotism, love of country, and "we must all put our shoulders to the wheel," but the profits jump and leap and skyrocket – and are safely pocketed.


... here's how some of the other patriotic industrialists and speculators chiseled their way into war profits.


Take the shoe people. They like war. It brings business with abnormal profits. They made huge profits on sales abroad to our allies. Perhaps, like the munitions manufacturers and armament makers, they also sold to the enemy. For a dollar is a dollar whether it comes from Germany or from France. But they did well by Uncle Sam too. For instance, they sold Uncle Sam 35,000,000 pairs of hobnailed service shoes. There were 4,000,000 soldiers. Eight pairs, and more, to a soldier. My regiment during the war had only one pair to a soldier. Some of these shoes probably are still in existence. They were good shoes. But when the war was over Uncle Sam has a matter of 25,000,000 pairs left over. Bought – and paid for. Profits recorded and pocketed.


There was still lots of leather left. So the leather people sold your Uncle Sam hundreds of thousands of McClellan saddles for the cavalry. But there wasn't any American cavalry overseas! Somebody had to get rid of this leather, however. Somebody had to make a profit in it – so we had a lot of McClellan saddles. And we probably have those yet.





Having recently read Butler's scathing indictment of war, this informative Truthout article about Iraq-war contractor fraud suits suggests that we the people won't get the full story for many years:


Under the False Claims Act, a civil war era law, when an employee of a company thinks they have evidence that their company is defrauding the US government, the individual can file a lawsuit on behalf of the government against the contractor by filing a special lawsuit called a qui tam - a Latin abbreviation for "he who sues in this matter for the king as for himself."

...

Not a single qui tam case against war contractors has been joined by the Bush administration DOJ despite the possibility of recovering billions of dollars for the US taxpayer and reining in war profiteers, who continue to cheat and defraud the government and the US troops mired in battle.

...

A unique factor in qui tam suits is that even if the cases are unsuccessful or companies settle the lawsuits to avoid trial, the facts of the case are eventually made public. Therefore, the historical record on the most privatized military operation in US history has only begun to be written.


...

These qui tam cases must eventually be dealt with because the statute of limitations - the amount of time whistleblowers have to file their case - does not run out once the case has been filed. Whistleblowers have up to six years (if acting without DOJ backing) to file a qui tam case. This means that cases involving Iraq reconstruction fraud will continue to pile up for years after the last contractors leave the country.


...

"The administration is protecting its donor base - big pharmaceutical companies, big defense contractors, and they don't care about the little guy, the tax payer," [Don] Warren [a specialist in Qui Tam cases] said when asked why he thought the Bush administration would deliberately underfund white collar crime investigations.


"It doesn't make sense. Thirteen dollars is returned to the US treasury for every dollar spent on these prosecutions. It is the only government program that pays for itself 13 times over," he said.