Contracts going to tax cheats
Government contracting -- a growing form of privatization, which turns over public work to private interests -- is one of the biggest cesspools of corruption and scandal in our country today.
Regular Facing South readers are familiar with the endless stories of cost-overruns, fraud, profiteering and other misdeeds of the contracting class, from Iraq to the Gulf Coast. Usually, these violations of the public trust don't lead to a crack-down on contracting abuse; indeed, the corporations found guilty of looting public assets are rewarded with yet more contracts.
The General Accounting Office just released a report which adds another layer of scandal to contracting: the fact that many of the companies receiving tax-payer money are themselves tax cheats. The Associated Press reports:
Government contractors who owe millions of dollars in back taxes bought luxury cars, boats and multimillion-dollar properties. Some failed to pay taxes but gambled company money.
One in 10 companies contracting with the General Services Administration from October 2003 through June 2005 owed back taxes, [Sen. Norm] Coleman's [R-MN] panel, the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, learned Tuesday. Their debts total $1.4 billion.
"In an age of increasingly tight fiscal discipline, that $1.4 billion could be put towards our homeland security, our children's education or job-training programs," Coleman said. "It adds insult to injury that these tax deadbeats are actually paid enormous amounts of money every year from American tax coffers."
Tough words from Sen. Coleman -- although where has he been in pushing for a Truman Commission to rein in war profiteers? (the House version of a bill proposing such a commission, I understand, died on the House floor today, with votes along party lines)
You can read the full GAO report here. (pdf)
Chris Kromm is executive director of the Institute for Southern Studies and publisher of the Institute's online magazine, Facing South.