Leahy, Grassley Wartime Fraud Legislation

Press Release

LEAHY, GRASSLEY INTRODUCE WARTIME FRAUD LEGISLATION
Bill Would Extend Law To War Fraud Related To Iraq, Afghanistan

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Sen. Chuck Grassley (R-Iowa) today introduced legislation to improve the enforcement of contracting fraud in the wars in Iraq and Afghanistan. The Wartime Enforcement of Fraud Act (WEFA) would close a loophole in current law and give the government the power to prosecute contracting fraud, even after the wars are over. If passed, the government could prosecute individuals or corporations that commit criminal fraud in government contracts delivering defective products or overbilling the government.

The legislation would update a law first passed by the Congress during World War II that suspends the statute of limitations for contracting fraud offenses during times of war. The Wartime Suspension of Limitations Act became law in 1942, and allowed the government to investigate and prosecute contracting fraud up to three years after the end of a war. The 66-year-old law, however, does not apply to the conflicts in Iraq and Afghanistan, which are not declared wars.

The Leahy-Grassley bill introduced Friday would update the World War II-era law to apply when Congress specifically authorizes the use of military force, as well as during declared wars. Under WEFA, an official act of the president or a concurrent resolution of Congress would officially conclude the war and start the tolling of the statute of limitations. The legislation would also extend the statute of limitations from three to five years after the end of hostilities, consistent with the current statute of limitations for criminal offenses.

"In times of war, we often do not learn about serious fraud until years after the fact," said Leahy. "What we do know is that tens of billions of dollars are unaccounted for, and potentially lost to fraud. The problem is not new, and Congress has the opportunity now to address it, starting with the wars in Iraq and Afghanistan."

"This legislation makes sure the law Congress passed during World War II applies to criminal conduct by contractors involved in military actions authorized under the War Powers Act, such as the conflicts in Iraq and Afghanistan," said Grassley. "The law already on the books is designed to allow prosecutions of criminal fraud after the war is ended so that investigations don't have to occur while conducting military operations. Our bill would update this law by making the suspension period equal to the statute of limitations for criminal fraud. It's a common sense reform that's good for taxpayers and good for public confidence that war contracting is not a free-for-all with no criminal accountability."

In the last six years, billions of dollars have been awarded in contracts to companies that have delivered defective products, including unsafe bullet proof vests and faulty ammunition, to American troops in Afghanistan and Iraq.

The Wartime Enforcement of Fraud Act would:

* Suspend the statute of limitations for war contracting fraud when Congress has authorized the use of military force consistent with the War Powers Resolution, and apply current law suspending the statute of limitations to the wars in Iraq and Afghanistan.
* Extends the statute of limitations from three to five years after the end of a war, consistent with the current statute of limitations for criminal offenses.
* Mandates that the tolling of the statute of limitations period must be an official act of the president with notice to Congress, or a concurrent resolution of Congress
* Clarifies that the term "war" includes Congressional authorizations for the use of military force consistent with the War Powers Resolution

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