Reconstruction Accountability and Fraud Prevention Act of 2006

Mr. President, this week marks five months since President Bush stood in Jackson Square in New Orleans and promised, ``Throughout the area hit by the hurricane, we will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives.''

America must keep that promise, and we must do so responsibly. So today, I am introducing a proposal to ensure that from here on out, federal reconstruction dollars needed to rebuild the Katrina-ravaged Gulf Coast--and Iraq--are not awarded to companies with histories of cheating American taxpayers.

My bill, the Reconstruction Accountability and Anti-Fraud Act, will promote accountability and prevent fraud in two of the largest reconstruction projects ever undertaken by the United States.

Under my proposal, firms that have cheated American taxpayers by overcharging, improperly billing or defrauding the government of more than $10 million over the last five years will be ineligible to compete for reconstruction work in either the Gulf Coast or Iraq.

Katrina is a national tragedy and rebuilding Iraq is a national responsibility, and neither should be an opportunity for profiteering.

Firms that have misused Iraq construction funds should be held accountable--not rewarded with no-bid contracts to rebuild the Gulf Coast.

Sadly, we've already seen examples of just that sort of misuse of taxpayer dollars.

New Orleans were still waist-deep in flood waters when Halliburton and its subsidiary, Kellogg, Brown & Root, were awarded some of the first multi-billion dollar no-bid contracts for Katrina reconstruction work. The companies received those contracts despite repeatedly overcharging the government for work in Iraq.

Listen to these abuses: In 2004, Halliburton was found to have overcharged the Defense Department by $167 million to import gasoline into Iraq from Kuwait.

A year later, a Pentagon audit revealed another $108 million in overcharges by KBR, a Halliburton subsidiary, for delivering gasoline to Iraq.

In 2003, KBR overcharged the government $27.4 million over 9 months for meals at five military bases in Iraq and Kuwait, where they billed the government for an average of 42,000 meals a day but served only 14,000 meals a day.

Last month, former KBR employees testified at a Senate Democratic Policy Committee hearing that water provided by KBR to thousands of U.S. troops in Iraq contained twice as much fecal coliform and other harmful bacteria as untreated water from the Euphrates River.

Yet incredibly, instead of banning Halliburton and KBR from competing from Katrina reconstruction work, the Bush administration awarded these same companies multibillion dollar no-bid contracts for Katrina work.

Not only that, many of the contracting practices blamed for wasteful spending in Iraq--including the ``cost-plus'' provisions that guarantee profits to contractors no matter how much they charge, or how well or poorly they perform--are being used in the gulf coast.

American taxpayers and the people of the gulf coast can't afford reconstruction based on the Halliburton business model of waste, fraud, and abuse. We must increase oversight and accountability in Iraq, and we must demand the same accountability here at home.

A growing number of reports demonstrate why this bill is needed.

Since November 2003, Congress has appropriated $21 billion for Iraq reconstruction and relief. On a bipartisan basis, this Congress has given the President everything he has asked for to support his ambitious plans to rebuild Iraq.

Earlier this week, Stuart Bowen, the Special Inspector General for Iraq Reconstruction, told the Senate Armed Services Readiness Subcommittee that nearly all of that money is either spent or obligated, and what remains, ``will not permit completion of all projects that were envisioned.''

We know how dangerous Iraq has become, not only for our troops but also for everyone involved in reconstruction. Dangerous conditions there have caused many setbacks and delays, and they have forced USAID, the Department of State, and others to devote increasing amounts of money to security, rather than reconstruction. Security is and will remain a serious problem, but it is by no means the only reason that the United States Government has spent billions of dollars for Iraqi reconstruction--and Iraq still struggles to rebuild.

The reports of the Special Inspector General for Iraqi Reconstruction fully address the serious security challenges our men and women in Iraq face today, and every day, but they also paint a grim picture of conditions in Iraq, and of poor planning, execution, and oversight of reconstruction efforts by the administration.

Let me be very clear: These failings are not the fault of our troops or of the men and women of USAID, of the Department of State, and other agencies that are risking their lives and working heroically to help the Iraqi people rebuild their shattered nation and create a better future, and they deserve our thanks and respect.

The Special Inspector General found that the CPA--the Coalition Provisional Authority--burned through nearly $100 million in Development Fund for Iraq money with few records to show for how that money was spent. In many instances, the money simply vanished. That is simply inexcusable.

In the town of Hillah, for example, the Special Inspector General found that the CPA left $7 million worth of projects uncompleted. The money allocated for these projects is missing.

Thanks to the good work of Special Inspector General Bowen, the American criminal justice system is going to hold at least a few people accountable.

Unfortunately, because of poor recordkeeping, there may be no way now to trace and recover all of the billions of dollars that have disappeared in Iraq.

But where we can track fraud and overbilling to specific companies, why would we give more money to these same offenders?

This week, the President sent Congress a budget proposal for next year that cuts Medicare, Medicaid, student loans, veterans' health, and many other vital programs America depends on.

I am deeply concerned about the deficits that have built up under this President. In 5 years, we've gone from a $5 trillion projected surplus to multi-trillion dollar projected deficits as far as the eye can see. We must restore fiscal sanity to the Federal budget. But before we cut health care for seniors and veterans or student loans, we should cut out the waste, fraud, and abuse in Federal reconstruction contracts.

We must ensure that reconstruction dollars meant to help Katrina victims rebuild their lives are not diverted to irresponsible contractors seeking to pad their bottom lines. Whether the work is done in Iraq or in Louisiana, Alabama, or Mississippi, there must be honesty, transparency, and accountability.

General John Abizaid, the commander of the U.S. Central Command, has said that the key to military success in Iraq ``is whether we can learn from our mistakes.''

Five months ago, when the President addressed the Nation from Jackson Square in New Orleans, he said, ``Americans have every right to expect a more effective response in a time of emergency. When the federal government fails to meet such an obligation, I, as President, am responsible for the problem, and for the solution. This government will learn the lessons of Hurricane Katrina.''

This is the test. If we are serious about correcting mistakes, there must be accountability. We cannot reward companies that have cheated the American people with even more taxpayer dollars, with little or no oversight. Our troops who are risking their lives deserve better. Our fellow American citizens who are struggling to rebuild their lives and communities in the gulf coast deserve better. And the American taxpayers who are paying the bills deserve better.

We have the biggest economy in the world. We don't need to rely on just a few privileged firms to do America's work. We don't need over- billers, underperformers, chiselers, and cheats to do America's work.

America's work and American taxpayer dollars should go to companies that believe in accountability, responsibility, and honest work for an honest dollar.

There are countless firms that fit that bill--in the gulf coast region, in Illinois, and across America. By weeding out companies that have cheated taxpayers, my bill will assure that those hard-working firms have a fair shot to compete for Federal reconstruction dollars in Iraq and at home.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, this week marks five months since President Bush stood in Jackson Square in New Orleans and promised, ``Throughout the area hit by the hurricane, we will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives.''

America must keep that promise, and we must do so responsibly. So today, I am introducing a proposal to ensure that from here on out, federal reconstruction dollars needed to rebuild the Katrina-ravaged Gulf Coast--and Iraq--are not awarded to companies with histories of cheating American taxpayers.

My bill, the Reconstruction Accountability and Anti-Fraud Act, will promote accountability and prevent fraud in two of the largest reconstruction projects ever undertaken by the United States.

Under my proposal, firms that have cheated American taxpayers by overcharging, improperly billing or defrauding the government of more than $10 million over the last five years will be ineligible to compete for reconstruction work in either the Gulf Coast or Iraq.

Katrina is a national tragedy and rebuilding Iraq is a national responsibility, and neither should be an opportunity for profiteering.

Firms that have misused Iraq construction funds should be held accountable--not rewarded with no-bid contracts to rebuild the Gulf Coast.

Sadly, we've already seen examples of just that sort of misuse of taxpayer dollars.

New Orleans were still waist-deep in flood waters when Halliburton and its subsidiary, Kellogg, Brown & Root, were awarded some of the first multi-billion dollar no-bid contracts for Katrina reconstruction work. The companies received those contracts despite repeatedly overcharging the government for work in Iraq.

Listen to these abuses: In 2004, Halliburton was found to have overcharged the Defense Department by $167 million to import gasoline into Iraq from Kuwait.

A year later, a Pentagon audit revealed another $108 million in overcharges by KBR, a Halliburton subsidiary, for delivering gasoline to Iraq.

In 2003, KBR overcharged the government $27.4 million over 9 months for meals at five military bases in Iraq and Kuwait, where they billed the government for an average of 42,000 meals a day but served only 14,000 meals a day.

Last month, former KBR employees testified at a Senate Democratic Policy Committee hearing that water provided by KBR to thousands of U.S. troops in Iraq contained twice as much fecal coliform and other harmful bacteria as untreated water from the Euphrates River.

Yet incredibly, instead of banning Halliburton and KBR from competing from Katrina reconstruction work, the Bush administration awarded these same companies multibillion dollar no-bid contracts for Katrina work.

Not only that, many of the contracting practices blamed for wasteful spending in Iraq--including the ``cost-plus'' provisions that guarantee profits to contractors no matter how much they charge, or how well or poorly they perform--are being used in the gulf coast.

American taxpayers and the people of the gulf coast can't afford reconstruction based on the Halliburton business model of waste, fraud, and abuse. We must increase oversight and accountability in Iraq, and we must demand the same accountability here at home.

A growing number of reports demonstrate why this bill is needed.

Since November 2003, Congress has appropriated $21 billion for Iraq reconstruction and relief. On a bipartisan basis, this Congress has given the President everything he has asked for to support his ambitious plans to rebuild Iraq.

Earlier this week, Stuart Bowen, the Special Inspector General for Iraq Reconstruction, told the Senate Armed Services Readiness Subcommittee that nearly all of that money is either spent or obligated, and what remains, ``will not permit completion of all projects that were envisioned.''

We know how dangerous Iraq has become, not only for our troops but also for everyone involved in reconstruction. Dangerous conditions there have caused many setbacks and delays, and they have forced USAID, the Department of State, and others to devote increasing amounts of money to security, rather than reconstruction. Security is and will remain a serious problem, but it is by no means the only reason that the United States Government has spent billions of dollars for Iraqi reconstruction--and Iraq still struggles to rebuild.

The reports of the Special Inspector General for Iraqi Reconstruction fully address the serious security challenges our men and women in Iraq face today, and every day, but they also paint a grim picture of conditions in Iraq, and of poor planning, execution, and oversight of reconstruction efforts by the administration.

Let me be very clear: These failings are not the fault of our troops or of the men and women of USAID, of the Department of State, and other agencies that are risking their lives and working heroically to help the Iraqi people rebuild their shattered nation and create a better future, and they deserve our thanks and respect.

The Special Inspector General found that the CPA--the Coalition Provisional Authority--burned through nearly $100 million in Development Fund for Iraq money with few records to show for how that money was spent. In many instances, the money simply vanished. That is simply inexcusable.

In the town of Hillah, for example, the Special Inspector General found that the CPA left $7 million worth of projects uncompleted. The money allocated for these projects is missing.

Thanks to the good work of Special Inspector General Bowen, the American criminal justice system is going to hold at least a few people accountable.

Unfortunately, because of poor recordkeeping, there may be no way now to trace and recover all of the billions of dollars that have disappeared in Iraq.

But where we can track fraud and overbilling to specific companies, why would we give more money to these same offenders?

This week, the President sent Congress a budget proposal for next year that cuts Medicare, Medicaid, student loans, veterans' health, and many other vital programs America depends on.

I am deeply concerned about the deficits that have built up under this President. In 5 years, we've gone from a $5 trillion projected surplus to multi-trillion dollar projected deficits as far as the eye can see. We must restore fiscal sanity to the Federal budget. But before we cut health care for seniors and veterans or student loans, we should cut out the waste, fraud, and abuse in Federal reconstruction contracts.

We must ensure that reconstruction dollars meant to help Katrina victims rebuild their lives are not diverted to irresponsible contractors seeking to pad their bottom lines. Whether the work is done in Iraq or in Louisiana, Alabama, or Mississippi, there must be honesty, transparency, and accountability.

General John Abizaid, the commander of the U.S. Central Command, has said that the key to military success in Iraq ``is whether we can learn from our mistakes.''

Five months ago, when the President addressed the Nation from Jackson Square in New Orleans, he said, ``Americans have every right to expect a more effective response in a time of emergency. When the federal government fails to meet such an obligation, I, as President, am responsible for the problem, and for the solution. This government will learn the lessons of Hurricane Katrina.''

This is the test. If we are serious about correcting mistakes, there must be accountability. We cannot reward companies that have cheated the American people with even more taxpayer dollars, with little or no oversight. Our troops who are risking their lives deserve better. Our fellow American citizens who are struggling to rebuild their lives and communities in the gulf coast deserve better. And the American taxpayers who are paying the bills deserve better.

We have the biggest economy in the world. We don't need to rely on just a few privileged firms to do America's work. We don't need over- billers, underperformers, chiselers, and cheats to do America's work.

America's work and American taxpayer dollars should go to companies that believe in accountability, responsibility, and honest work for an honest dollar.

There are countless firms that fit that bill--in the gulf coast region, in Illinois, and across America. By weeding out companies that have cheated taxpayers, my bill will assure that those hard-working firms have a fair shot to compete for Federal reconstruction dollars in Iraq and at home.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I am pleased to introduce two joint resolutions appointing two individuals to the Smithsonian Board of Regents. The joint resolutions are cosponsored by Senators Frist and Leahy. Alan Spoon and Phillip Frost have been approved and recommended for appointment by the Smithsonian Board of Regents. I ask unanimous consent that the text of the resolutions and the biographies of both gentlemen be printed in the Record. I ask the Senate to approve the resolutions.