IRAQ Conflict and Reconstruction WhistleBlowers
Sun Feb 11, 2007 14:53

IRAQ Conflict and Reconstruction WhistleBlowers

Congress originally passed the False Claims Act during the Civil War in order to counteract rampant fraud by profiteers who sold shoddy goods to the Union Army at inflated prices. In the more than 150 years since that time, the defrauders have gotten much more sophisticated in their methods of bilking the government, but the game remains the same. Corruption, waste, and fraud, still play a large role in any theater of conflict, and throngs of unscrupulous contractors still seize on the haste and laxed oversight in times of war to swindle Uncle Sam.

The conflict in Iraq has proven to be fertile ground for such fraud. Vast portions of the U.S. security, reconstruction, and humanitarian efforts in Iraq are being farmed out to private contractors, either directly or through affiliated agencies and organizations. The monies allocated for these efforts are substantially unprotected and there are insufficient internal controls on use of the funds. For example, recent audits by the U.S. Special Inspector General for Iraq Reconstruction determined that more than $100 million in cash simply could not be accounted for.

Other audits found that the government has been asleep at the wheel while contractors have feasted on the unguarded funds. Some of the more brazen examples include: $362 million recorded under the vendor name "Dummy Vendor", $186 million spent to construct a series of primary healthcare centers, most of which were never built or completed; and, the submission (and payment) of invoices on numerous canceled contracts.

This is precisely the type of fraud Congress hoped to expose by empowering whistleblowers to come forward and sue under the False Claims Act. The provisions of the FCA are more than adequate to address fraud on federal monies no matter who is administering them. So, for example, defrauding a U.S.-funded NGO or a prime contractor performing work for the U.S. military violates the FCA, thus a whistleblower can sue the defrauders on behalf of the government.

There are also billions of dollars worth of non-U.S. funds at risk for fraud in Iraq. Money from the sale of Iraqi oil and various repatriated funds belong to the Iraqi people and have been used by various Iraqi governmental bodies for reconstruction and humanitarian efforts. These monies are particularly at risk for fraud due to the high degree of corruption throughout the present Iraqi government. Iraqi law can also reward whistleblowers for coming forward to expose the fraud. For example, the Coalition Provisional Authority Rule 59, entitled, AProtection and Fair Incentives for Government Whistleblowers," allows an award of up to 30% of all funds recovered as a result of the assistance of a whistleblower.

The following list shows the types of activity for which whistleblowers can claim a bounty under the FCA and, in some circumstances, under Iraqi law:
# diversion of government monies to personal profits or non-authorized uses;
# use of inflated invoices to overbill for goods or services;
# reporting inflating costs on a cost reimbursement or "costs plus" contract;
# falsifying data used to negotiate a fixed fee contract;
# knowing or reckless violation of contract terms (such as testing of goods, quality of goods, and services), particularly when coupled with a false certification or representation about the goods or services

If you are aware of any of the foregoing types of fraud, you may be able to recover significant rewards by filing a qui tam lawsuit. As experienced whistleblower attorneys, Loevy & Loevy can help. Our attorneys have experience in litigation involving the Iraq conflict, as well in proving FCA cases against U.S. defense contractors. We also have the ability to affiliate with Iraqi attorneys when needed to investigate and pursue qui tams arising in Iraq.

We always maintain the strictest confidentiality for our clients (including written non-disclosure agreements upon request) and never use client information for any purpose other than to pursue the client's case. We also understand the serious Career Concerns for many of our clients who are considering blowing the whistle, and we can advise you throughout the process.

If you are considering bringing a whistleblower claim relating to fraud in the Iraq conflict or reconstruction and would like to consult about your options or ask any questions you can reach our attorneys in the U.S. by calling area code 312-243-5900. You can also email us at We treat all inquiries as privileged and confidential attorney-client communications. We work only on a contingency basis and so you will never be required to pay out of pocket for our services.


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