House subcommittee cracks down on Iraq war profiteering

The House crime subcommittee voted Tuesday to make excessive overcharging in Iraq and Afghanistan contracts a specific "war profiteering" crime.

Without debate, the House Judiciary Crime, Terrorism and Homeland Security Subcommittee approved the bill (H.R. 400) on a voice vote and sent it to the parent committee for action. The Justice Department opposes the bill in its present construction, fearing it could hinder some prosecutions.

The legislation would make it a crime to overcharge taxpayers on contracts during a war or reconstruction. The felony would carry penalties up to 20 years in prison and fines up to $1 million or twice the amount of illegal profits, whichever is higher.

For making false statements in connection with contracts, this crime would carry prison sentences up to 10 years and fines up to $1 million or twice the illegal gains, whichever is higher.

Subcommittee Chairman Bobby Scott, D-Va., said in a statement that the bill sends a clear message that contracting fraud, whether it occurs in Iraq or elsewhere overseas for exorbitant gain is not only "unacceptable and reprehensible, it is illegal."

A companion bill has been drafted by Senate Judiciary Chairman Patrick Leahy, D-Vt.

There are numerous anti-fraud laws, but none specifically prohibits war profiteering or allows prosecution of cases outside U.S. jurisdiction. It was noted at a hearing earlier this year that a contractor was found guilty of numerous counts of fraud and fined $10 million but the case was overturned because the fraud statute did not apply overseas.

Subcommittee ranking member Rep. Randy Forbes, R-Va., said efforts will be made to change parts of the bill when it gets to the full committee. The Justice Department, he said, questions whether the bill would have unintended consequences, including hindering the government's ability to prosecute cases.