Manning leaked his information to the WikiLeaks site, and the video from the helicopter incident in particular set off a storm of controversy.  In terms of the hundreds of thousands of diplomatic cables that Manning claimed to have leaked, only one appeared on WikiLeaks--a cable which summarized the U.S.  Embassy's discussions with Iceland regarding the strange nation's debt problems (one cause of which apparently was Icelanders' superiority complex, which convinced many life-long fisherman that they were professional investors).

The big question now is whether Manning did a public service by leaking these documents and videos or just got carried away in his quest for attention. Manning had drifted from job to job, and at one point found himself  homeless. In introducing himself to Lamo, Manning wrote that he was facing discharge for an ''adjustment disorder." Manning also assaulted a fellow soldier, and wrote that he had been ignored by his fellow soldiers to the point that he felt like all had left were his laptop, some books, and ''a hell of a story.''

Manning's leaked video has been compared to The Pentagon Papers, which detailed the U.S. government's activities in Vietnam and revealed that four presidential administrations had misled the public regarding their intentions in the area. The Pentagon Papers were leaked to The New York Times by Daniel Ellsberg in 1971.

Bradley Manning is a different breed of whistleblower from those typically involved in exposing fraud against the government, and his case will continue to generate controversy. On the one hand, he exploited his access to sensitive information, violated the trust the military put in him, and potentially put U.S. soldiers and diplomatic relations at risk. On the other hand, he exposed the ugly side of war, one from which most Americans are shielded.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

According to the Florida AG's office, here is the activity in which Office Depot engaged, prompting the investigation:

Bait and switch overcharging of state and local agencies by setting low fixed price for core items and then publishing catalog and website information that leads purchasing agents from low cost items to much higher priced alternative items.

Just as we rely on our defense contractors to provide the F-22s our tax dollars pay for, so de we rely on office supply companies to provide the staplers we contract for at the agreed price. It takes the efforts of both law enforcement as well as citizens to hold fraudsters accountable. For example, a former Lockheed  employee filed a lawsuit against his former employer alleging that it knowingly used defective materials in constructing the F-22's skin.

The point of all this is that fraud can occur whether you're talking the mundane (staplers) or the extraordinary (radar-evading jets). Fraud is fraud!

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

In the first case, a subcontractor of Sikorsky agreed to pay $1.2 million to settle a FCA claim. Ceradyne, Inc., of Costa Mesa, CA, allegedly failed to ballistically test armor plating it installed near the pilot and copilot in Black Hawk helicopters.  The Black Hawk is used by the Army, Navy, Air Force, and Marines. Ceradyne allegedly failed to conduct the tests between 1992 and 2006, so there is potentially  a whole generation of Black Hawks out there that is not providing adequate protection for its crew members.

The second case also involves helicopters. This time, Bell Helicopter Textron realized that it (oops) overcharged the government for helicopters and services. Bell already paid more than $12.8 million in 2006 to settle its billing mistakes. Now, Bell must pay an additional $3.7 million to settle any claims the U.S. may have against the subsidiary Bell Helicopter Textron Canada Limited as a result of intra-company charges that led to more overbilling. This case comes under the umbrella of the National Procurement Fraud initiative, which is designed to identify this type of fraud early on. Unfortunately, military contractors are good at staying one step ahead of the government.

In the third leg of the military contractor fraud triumvirate is a case involving M24o and M249 machine guns.  A former employee of defense contractor Northside Machine Company accused his employer of ordering him to approve gun parts that didn't meet quality standards for troops and then (surprise!) firing him for blowing the whistle. Northside provides trigger assemblies and other parts for M240s and M249s, which are widely used by the military. A federally funded research group found that 30% of troops surveyed reported that the M249 had simply stopped firing during combat, which is probably not the best thing when some insurgent is trying to take you out!

UPDATE: Maybe this should actually be called a quadumvirate! The Army has announced that it is recalling 44,000 advanced combat helmets manufactured by Hebron, OH-based ArmorSource LLC. Apparently the helmets (already issued to soldiers worldwide) do not meet military specs. So now, it looks like tax dollars are being spent to send soldiers out in helicopters with inadequate armor to fight with guns that don't shoot while wearing helmets that may not offer enough protection!

This article is brought to you by The Qui Tam Team, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Even though the DOJ has just joined a whistleblower lawsuit against KBR, the Army has announced a $568 million no-bid contract with the company through 2011 for military support services in Iraq.

KBR allegedly accepted meals, sports tickets, and golf outings from two freight forwarding companies.

KBR denies the allegations, of course, and in a statement said that "Gifts of dinners, baseball tickets and other similar items would violate KBR policies." This is sort of like saying, "It would just be so awful if some (hypothetical, of course) company bribed officials. Nothing specific, other than dinners and baseball tickets...er..." KBR went on to say that maybe, possibly, if this hypothetical naughty company did give any gifts, they would have been less than $20,000. No big deal, right?

The problem is that this kind of behavior ends up costing taxpayers money in the end. Although the government hasn't definitively stated whether the kickbacks cost taxpayers money yet, there is a strong possibility that KBR passed up companies offering lower costs for those that bought the best dinners and seats for games. Choosing a supplier on the basis of the gifts they provide shifts a government contractor's priorities away from where they belong (providing the best value to the taxpayer) and warps the "bidding" process into one in which the contractor puts its own interests first.  Fortunately, there are whistleblowers out there to help keep contractors like KBR in check.

This article was sponsored by The Qui Tam Team, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Now, the government has extended the indictment to two of Agility's subsidiaries: DGS Holdings and KSCc. The company has been doing extremely well financially up until now, so it remains to be seen how the extra indictments will affect things. On April 11th, Agility posted a 22 percent rise in fourth-quarter profit--evidence that its enormous military contracts are an extremely lucrative business, even if it involves vast overchargings for a couple of bananas or some Romaine.

Today's overpriced banana is the modern version of the $600 toilet seat--the modern military outsources even the most mundane details, not just procurement of equipment. Although the extensive use of contractors puts the military at a much higher risk of being subjected to fraud, this does not excuse any contractor who overcharges for goods and services. It's taxpayers who ultimately end up footing the bill.

UPDATE: As we were writing this post,  it was announced that Agility has lost its contract to supply food to troops in Iraq! Agility stated on the Kuwaiti Stock Exchange website that another company had been appointed to take over its duties, but that Agility would continue on for six more months.

This dramatic turn of events was brought about by a whistleblower without whom Agility's fraud may never have come to light. The company could have gone on overcharging the military and taxpayers for many more years, but fortunately  in sixth months we won't be buying any more overpriced Iceburg lettuce from this outfit.

• Exposing troops to unsafe food, water, and toxic fumes. KBR allegedly loaded ice for the troops onto trucks that were still contaminated with bodily fluids and other biohazards from bodies, and allegedly mismanaged the burn pits it used to dispose of medical waste and bodies so poorly that a stray dog was seen running around a base with a human arm in its mouth.
• Health problems related to its massive burn pits. Plaintiffs alleged that their family members died as a result of exposure from toxic fumes emitted from KBR's flaming garbage pits in Iraq and Afghanistan. Pretty much anything not tied down was allegedly tossed into these pits, including the aforementioned arm.
• Forcing Nepalese workers to work in Iraq, where they were kidnapped and killed. The workers were allegedly recruited in Nepal by KBR and its Jordanian contractor and told that they would be working in a luxury hotel in Jordan. However, they were taken instead to Iraq where, on the way, their unprotected convoy was attacked and all but one were kidnapped and murdered.
• KBR is also facing a criminal investigation as a result of electrocution deaths of soldiers. 18 soldiers have been electrocuted, most while showering, as a result of improperly installed or maintained electrical equipment.

Now, in the latest legal snafu, the U.S. Department of Justice has sued KBR for allegedly knowingly including impermissible costs for private security  in bills submitted to the Army between 2003 and 2006.  According to the lawsuit, KBR violated a service contract by failing to obtain authorization from the government for private security subcontractors. KBR, on the other hand, claims that the government was the one in breach of contract because it failed to provide adequate protection for KBR employees, requiring KBR to hire its own guns.

With all this litigation as a result of what appears to be serious mismanagement and lack of oversight, we need to question whether military contractors are providing taxpayers the best value for their money. It's important for more whistleblowers to bring fraud by military contractors to light so we can start getting our  ill-gotten tax dollars back!

As we blogged previously, the False Claims Act celebrated its birthday on March 2nd. In honor of unofficial False Claims Act week, here are the most important amendments to the FCA over the years.

In 1943, the act was amended, and its power seriously limited.  Congress decided that the act was being abused, and decided to defang the FCA. The relator’s share of the proceeds was reduced, and the relator's right to bring a qui tam suit was eliminated if the government had prior knowledge of the fraud--even if the government had known about the fraud but made no attempt at self-help in order to correct the problem! All of this basically rendered the FCA useless.

After 1943, qui tam suits came to a screeching halt. The FCA was basically a castrato until 1986, when amendments were passed to strengthen the act in part due to President Reagan’s consternation over the amount of government money being lost to waste. This was during the time that the $900 toilet seat and the $500 dollar hammer entered the American consciousness. The 1986 amendments greatly strengthend the FCA and made it the fraud-fighting tool it is today.  Among the amendments were an increase in the relator's share, granting of treble damages, and whistleblower protections for employees. Iowa Senator Chuck Grassley helped make the 1986 amendments possible, and he continues to be a champion in the fight against fraud.

In 2009, the most significant changes to the FCA since the 1986 amendments were implemented through the Fraud Enforcement and Recovery Act of 2009 (FERA). FERA expands the scope of the FCA, and, among other things, increases protections for qui tam relators beyond employees to include contractors and agents. FERA also redefines a “claim” for FCA purposes to include “any request or demand, whether under a contract or otherwise for money or property and whether or not the United States has title to the money or property” that is 1) presented directly to the United States, or 2) “to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a government program or interest’ and the government provides or reimburses any portion of the requested funds.”

Based on the legislative history following 1986, Congress seems to have come to its senses regarding the FCA. Hopefully legislators will continue to amend the FCA only in ways that further strengthen it.

Regarding unscrupulous military contractors, Abraham Lincoln opined

Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the Nation while patriotic blood is crimsoning the plains of the South and their countrymen moldering the dust.

Considering what transpired during the Civil War, it's easy to understand how Lincoln came to this conclusion. During the Civil War, military contractors sold sick and mangy mules and horses, defective rifles and ammunition, rancid rations, and other second-rate provisions to the Union Army.

Further discussion of the Act's history may be found in United States ex rel. Williams v. NEC Corp., 931 F.2d 1493, 1496-98 (11th Cir. 1991) and United States ex rel. S. Prawer & Co., 24 F.3d at 324-26.

Although defective helicopters may have replaced mangy mules,  the False Claims Act remains an effective tool for fighting fraud 147 years since its passage. The beauty of the FCA is its adaptability--it is now used to fight fraud in areas far beyond its original intent.

Lincoln Fabrics Ltd., a Canadian company (visit its website and see how it touts the military applications of its products), wove the fabric which was used in the manufacture of vests sold by several companies. The government alleged that Zylon degraded quickly, especially in hot and humid conditions, and that Lincoln knew about the problems as early as 2001 but continued to manufacture and sell the fabric until 2005. At that point, the National Institute of Justice issued a report detailing Zylon's degradability, and its use was stopped.

Lincoln will pay the government $4 million to settle the lawsuit, and it joins several other scurrilous members of the body armor industry that have gotten themselves entangled in FCA suits based on their use of Zylon. The U.S. has already settled with some companies for $54 million, and the hits keep on coming. There are lawsuits pending against Toyobo Co., Honeywell Inc., Second Chance Body Armor, Inc. and First Choice Armor Inc.

In February 2009, shipping company APL Ltd. agreed to pay the government $26.3 million to resolve a qui tam case alleging that the company submitted false claims in connection with its contract to transport thousands of containers to Iraq and Afghanistan. The government alleged that APL overcharged and double-billed for certain services. An APL employee discovered what the company was doing, and filed a qui tam suit.

In March 2009, Sikorsky Aircraft Company, which manufactures the storied Black Hawk helicopter for various branches of the military, agreed to pay the government $2.9 million to settle claims that it failed to install required safety equipment. Under Sikorsky's contract, it was obligated to install certain armored plates in Black Hawks to ensure that they could withstand combat. Fortunately no injuries resulted from the fraud, but it was fraud nonetheless because Sikorsky claimed payment for non-compliant goods.

In April 2009, Northrup Grumann agreed to pay the government $325 million to settle a qui tam suit alleging that a company Northrup Grumann purchased in 2002, TRW, made defective parts for spy satellites. TRW worked with another company to cover up malfunctions in satellite parts, which resulted in delayed satellite launches and failures in orbit. This enormous settlement was the largest ever for a qui tam claim alleging procurement fraud.

In August2009, another aircraft company entered into a multi-million dollar settlement to resolve a qui tam suit. Boeing Company agreed to pay the government $25 million to settle allegations that it performed defective work on the entire KC-10 Extender fleet (the KC-10 Extender performs the delicate task of mid-flight refueling for the Air Force). The original qui tam claim alleged that Boeing had performed faulty work while installing insulation in the KC-10. During the government's investigation, it found that Boeing had also overcharged the government for this faulty work by inflating the number of hours necessary and charging an excessive hourly rate.

In November 2009, the Department of Justice joined a qui tam suit against Public Warehousing Company (PWC) and  The Sultan Center Food Products Company (TSC), Kuwaiti-based companies that supplied food to troops in the Middle East. The suit alleges that the companies violated the False Claims Act by overcharging the government for locally available produce, and also by failing to pass along to the government cost savings obtained through rebates. PWC has contracts worth billions of dollars to supply food to troops in Kuwait, Iraq, and Jordan.