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MediaWatch:Magazines
Heroes
The People vs. the War Profiteers
Vanity Fair Profiles One Lawyer's Crusade Against Contractor Fraud
10/15/2007 6:06 PM ET
WASHINGTON - FEBRUARY 14: Alan Grayson gestures during testimony before the Senate Democratic Policy Committee at the Dirksen Senate Office Building on Captiol Hill February 14, 2005 in Washington, DC.
Shaun Heasley/Getty
WASHINGTON - FEBRUARY 14: Alan Grayson gestures during testimony before the Senate Democratic Policy Committee at the Dirksen Senate Office Building on Captiol Hill February 14, 2005 in Washington, DC.
Alan Grayson wonders if it would be so outlandish to suggest that the same Justice Department accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes.

The lawyer has developed an expertise pursuing contracting fraud cases over the years, and views Department of Justice handling of Iraq-related charges of overbilling, double-billing, and other examples of contractor fraud as something distinctly different from usual operating procedures.

Billions of dollars of US taxpayer money has been lost to graft and fraud during the Iraq war--much of it to American contracting firms. Grayson considers the loss clear and simple theft, and war profiteering from the Iraq conflict to be "the crime of the century."

He tells Vanity Fair correspondent David Rose a troublesome account of his crusade against profiteers of the war on terror, and the obstruction he has faced by government officials seemingly content to keep the problem of fraud and corruption out of the public eye, even if that means it goes unpunished.

Based on Rose's overview of a number of cases, the ones most usually punished are the whistleblowers who have tried to hold their employers to account.

Grayson specializes in "qui tam" cases, those filed under a provision of the False Claims Act, which stipulates that anyone can file a case on taxpayers behalf to seek redress for fraud against the government. In successful cases, the contractor is compelled to pay back three times the amount stolen, with the original whistleblower earning 18% of the damages.

The Department of Justice will generally decide within 60 days whether or not to adopt the case as its own, taking on the cost to prosecute it. Until the DoJ has made its decision, the court filings remain sealed and all the cases participants are subject to a gag order.

Grayson had represented both contractors and whistleblowers on a "trickle" of qui tam cases over the years, most of which were quickly adopted by DoJ, but Rose writes that after Bush came to office and the war on terror began, the lawyer "quickly came to realize that the scale of fraud spawned in its wake was of a different order of magnitude."

Grayson says it's not unusual for the DoJ to request an extension on its consideration of a qui tam case for 6 or 12 months, but Iraq-related cases have seen repeated requests for extension, leaving a number of cases first filed in 2003 or 2004 lingering in legal limbo and sealed from public scrutiny.

"What you have here is a uniform practice that goes across an entire class of cases, something I've never seen before," says Grayson. "They're being treated in a fundamentally different way from normal cases that don't involve fraud in Iraq. They're being bottled up indefinitely."

Rose reports:

In fiscal year 2006, according to Taxpayers Against Fraud, the D.O.J. won damages in 95 separate qui tam cases in fields ranging from Medicare to homeland security, recovering a total of almost $3.2 billion. Yet not a cent of this sum arose from suits against contracting firms in Iraq. In four years, the total False Claims Act damages from Iraq amount to just $14 million, the result of four cases that were settled out of court, according to the D.O.J.

Nine other cases have been unsealed, but the D.O.J. decided not to intervene in any of them. Five promptly collapsed, because neither the whistle-blowers nor their lawyers were prepared to bear what might have been huge costs. That leaves four suits that are being fought in public, all by Alan Grayson.

Given that the same lawyers who are suppressing the Iraq cases continue to be cooperative on other matters, Grayson suspects that they are following orders from on high. Would it be so outlandish, he wonders, to suggest that the same Justice Department that has been accused of firing U.S. attorneys for political reasons might be suppressing war-related fraud claims for political purposes?

"I wish I could tell you about the ones that are under seal," says Grayson, "because some of them really are time bombs. They're literally burying these cases to keep the public from finding out about them, and to keep anything from being done on them. But it is a time bomb, because any normal amount of attention on these cases would result in massive amounts of money being recovered for the taxpayers."

Rose also highlights a number of known complaints about KBR, and points to the firm's ties to former Attorney General Alberto Gonzales, which seems to raise questions about the motivation behind the delays in the cases.

Grayson reports that every qui tam case concerning KBR he has brought before the DoJ has been represented by the Texas firm of Vinson & Elkins, the legal outfit that gave Gonzales his first lawyering job, made him its first minority partner, and donated large sums to his 2000 run for Texas Supreme Court.

However it has happened, Grayson is of the opinion that the sheer number of cases and the consistency with which governing authorities have obstructed their investigation points to a cover-up.

"What we have seen up to now is the worst of the worst in terms of a deliberate cover-up," Grayson says. But if and when it comes to an end, he thinks it's entirely possible that Congress will appoint a special prosecutor—one whose targets might one day reach "an extremely high level."

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