Bush Administration, DOJ Blocking Iraq Fraud Suits

Peter Keisler, the acting US attorney general, covered up evidence of alleged widespread contracting fraud in Iraq by preventing whistleblowers' complaints from being investigated, according to a prominent fraud attorney.

Alan Grayson, an attorney who has represented scores of whistleblowers in suits against companies that were awarded hundreds of millions of dollars in government contracts related to Iraq reconstruction, blamed the Bush administration for the lack of government action on Iraq fraud.

In an interview with Truthout, Grayson said Keisler has purposely delayed investigations into Iraq contractor fraud because of Keisler's political allegiance to the Bush administration. Keisler has refused to prosecute whistleblower lawsuits because Bush "does not want more bad news coming out of Iraq," Grayson said, adding "to have an entire class of cases treated this way is truly unprecedented. I've been doing this for 20 years and I've never seen it before."

Keisler was appointed by President Bush to serve as the acting attorney general after Alberto Gonzales resigned in September. In July 2003, Keisler, became the assistant attorney general in charge of the civil division, roughly three months after the invasion of Iraq. Among its responsibilities, the civil division of the Department of Justice (DOJ) is tasked with enforcing contract fraud laws and investigating whistleblower complaints. A former law clerk for Judge Robert Bork and former Regan administration lawyer, Keisler is a co-founder of the conservative Federalist Society.

During his time at DOJ, Keisler led the Bush administration's successful legal fight to deny habeas corpus rights for prisoners held at the Guantanamo Bay detention facility. Keisler recently resigned his post as assistant attorney general, saying he planned to spend time with his family. Keisler was nominated by the Bush administration to serve as a Federal Judge on the Washington DC Court of Appeals in 2006, but the Senate has not yet taken up his confirmation. He has failed to be confirmed by the Senate in two previous appointment attempts by Bush.

At a Senate Democratic Policy Committee hearing September 21 on Iraq war contractors, Senator Byron Dorgan (D-N. Dakota) said there "has been a staggering amount of contract abuse, the worst in our history."

In a hearing last week, Congressman Ike Skelton, chairman of the House Armed Services Committee, said Iraq contractor fraud remains a serious issue. "As has been reported in the press, the Inspector General and the Army have uncovered a cluster of fraud and corruption problems arising out of a series of support contracts, many of which were let from an office in Kuwait. As of August 28, the Army reported that it had 76 cases of fraud and corruption under investigation, had obtained 20 indictments, and had uncovered over $15 million in bribes. The people involved ranged from civilians and enlisted military personnel to relatively senior officers," Skelton said.

Yet, under Keisler's leadership, the DOJ civil division has refused to join any whistleblower suits against Iraq war contractors. DOJ work on behalf of whistleblower lawsuits against companies in other sectors has continued unabated.

The DOJ did not return calls for comment.

Keisler apparently took responsibility for the lack of Iraq fraud prosecutions in a keynote speech to the Taxpayers Against Fraud watchdog organization. The speech, however, was "off the record" and a transcript has not been made publicly available.

During his appearance before the Senate Democratic Policy Committee, Grayson said "Under the False Claims Act, the Attorney General is supposed to join with whistleblowers to prosecute and punish war profiteers. The sad truth is that the Bush Administration has not even tried to do this. On the contrary, it has done all it could to prevent this." The DOJ has not joined a single Iraq contracting fraud case brought by a whistleblower to date.

Under the False Claims Act, established by President Lincoln as a result of fraud and war profiteering during the civil war, any citizen has the ability to sue a company for fraud on behalf of the US government. In what is know as a qui tam action, a whistleblower can recoup legal fees and a percentage of the money the lawsuit recovers for the government. When a qui tam action is brought by a whistleblower, it is placed under seal to allow the government to review the case and to investigate the accused company in secret.

The DOJ has refused to join 12 such cases and an estimated 50-70 cases remain under seal. By delaying their decision on whether or not to join these cases, the DOJ has kept whistleblowers and their lawyers from going public with their fraud accusations and has kept the accused companies out of court.

Despite a rejection from the government, Grayson has decided to move forward with five of his pending cases against Iraq war contractors, three against the Halliburton Company and two against Custer Battles LLC.

Beth Daley, the director of the Project on Government Oversight, described the DOJ's lack of action on Iraq fraud cases as "breathtaking," and as "a travesty of justice." According to Daley, "When you see what has happened with the Iraq fraud cases, you have to wonder if the DOJ has succumbed to political partisan interests rather than fighting corruption, which is their mission. This has huge implications for our democracy; to lose the most important corruption fighting agency to political agendas would be quite sad. It means that corruption has been allowed to fester."

According to Patrick Burns, a spokesman for Taxpayers Against Fraud, the DOJ has suffered from a lack of staff and resources. Burns says the DOJ has a huge waiting list for fraud cases filed by whistleblowers. Burns added, "the DOJ civil division is a-political. Keisler is as straight a stick as you will get. He is a good lawyer and I have never felt the slightest subterfuge from him."

Previously, Burns told the Boston Globe, "Basically, they [the US government] have done nothing, and it is hard to explain what is going on there, other than direct orders from the very top of government," Burns continued, "It can no longer be explained by incompetence alone."

Matt Renner is an assistant editor and Washington reporter for Truthout.

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