Fraud crackdown comes with a loophole

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" WASHINGTON - A Bush administration plan to crack down on contract fraud has a multibillion-dollar loophole: The proposal to force companies to report abuse of taxpayer money will not apply to work overseas, including projects to secure and rebuild Iraq and Afghanistan.

For decades, contractors have been asked to report internal fraud or overpayment on government-funded projects. Compliance has been voluntary, and over the past 15 years the number of company-reported fraud cases has declined steadily.

Now, the Justice Department wants to force companies to notify the government if they find evidence of contract abuse of more than $5 million. Failure to comply could make a company ineligible for future government work.

The proposed rules, which are in the final approval stages, specifically exempt "contracts to be performed outside the United States," according to a notice published last month in the Federal Register.

Critics including the watchdog group Taxpayers Against Fraud said the overseas exemption raises suspicions."

Fraud crackdown comes with a loophole - Yahoo! News
 
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