The Valdosta Daily Times
May 15, 2008 12:28 am
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The U.S. Army released a statement Wednesday concerning an ongoing investigation into fraudulent insurance practices by companies with military contracts in Iraq. Contracts for work on restoring the power grid, according to the Associated Press, were awarded to two companies, which the Army later discovered were owned by cousins working out of the same warehouse in Iraq. The government was defrauded out of hundreds of thousands of dollars, uncovered so far, with one official claiming that the issue “is bigger than we think.”
The investigation is ongoing, but no arrests have been made and the government hasn’t been reimbursed for the fraudulent overpayments. However, the discovery has led to “hurried changes in the way many contracts are handled by the U.S. Army,” according to the AP.
At Moody Air Force Base, subcontractors were asked Tuesday at a town hall meeting to not give up, but to not expect much help from the government either. The $10 million owed is only a portion of the estimated $40 million paid to Carabetta Construction on the Magnolia Grove privatized housing project, and only a very small portion of the overall $3 billion contract for housing work at more than a half dozen military bases. All work has stopped, the Carabettas were allowed to sell off some of the projects, and still have a say so in the sale of the one here in Valdosta.
When Undersecretary of the Air Force Bill Anderson was pressed on why the government simply didn’t bail out the subs, as $10 million is apparently a pittance in the Congressional budget, he stated that any bailout was detrimental to everyone as not only would it help to bail out the Carabettas, it would also have an adverse effect on future construction projects at Moody. Anderson assured the subs that it was in their best interest to sit back, relax and allow the Air Force to continue negotiating for an agreement with a buyer for the property. Even though he stated the Air Force is not responsible for the debacle, the subs are supposed to trust them now when they say they’re only here to help.
Anderson stated that there was an ongoing criminal investigation by the Department of Justice into the issue, although no one locally can recall being interviewed and Lowndes County Sheriff Ashley Paulk’s overtures to assist in the investigation were rebuffed. Sen. Saxby Chambliss of Georgia came to Moody AFB to issue a request in October of 2007 for a complete and full investigation with a report due in six months. The request was co-sponsored by Sen. Mark Pryor of Arkansas, as Little Rock AFB falls in his jurisdiction and is also one of the failed Carabetta projects. Six months has come and gone. No report has been released.
To date, just as with the Army situation, no one has been held accountable, no money has been reimbursed, no investigation seems to be yielding any results, and the money has disappeared without a trace, or an audit, according to Anderson.
The government doesn’t appear to have the manpower to investigate millions of dollars in potentially fraudulent projects, and yet finds the time routinely to prosecute young military members for infractions that are relatively minor by comparison. A quick Internet search revealed scores of cases with airmen sentenced for fraud, including one in which four young airmen, who each defrauded the government out of $7,000 to $10,000 in overpayments for basic housing allowances, were sentenced to at least eight months of confinement, fines and dishonorable discharges upon the completion of their sentence.
It sure seems like something is wrong with this picture.
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