AIR: Nice Work If You Can Get It

"Contracting Rush for Security Led to Waste, Abuse." The headline of the Washington Post's lead story on May 22, 2005 was an eye-opener. Over the course of a 15-month investigation, veteran Post investigative reporters Scott Higham and Robert O'Harrow, Jr. had uncovered case after case of mismanagement and misuse of taxpayers' money by the U.S. government in its post-9/11 sprint to tighten national security. Their odyssey began with a tip from legendary Post reporter (now assistant managing editor) Bob Woodward. It led them to a secret world where politics, business and homeland security intersect to produce profit for a chosen few -- without necessarily making the country safer.

When Woodward told the investigative desk about a call from an unnamed source who claimed serious flaws in the way the Department of Homeland Security (DHS) does business, Higham and O'Harrow were assigned to the story. They learned, through a second anonymous tip, that a federal audit of the Transportation and Security Administration's (TSA) contracts contained evidence of some $700 million in misspending by companies hired by the agency to implement national safety programs -- and that many of these new systems simply did not work. But the contents of the audit were a closely held secret, and attempts to obtain other records were denied repeatedly. The reporters realized that federal contracts representing billions of tax dollars are cloaked in secrecy. Experienced in cultivating confidential sources, Higham found out the caller's identity and persuaded the person to meet with them face-to-face -- and provide a copy of the TSA audit.

With the audit in hand, the reporters had a virtual roadmap of abuse of the federal contracting system. It also became clear to them that Homeland Security, in its effort to meet Congress's demand for anti-terrorism measures in the chaotic weeks after 9/11, provided little if any oversight of the projects on which it had spent millions.

A company called Eclipse Events Inc., for example, was contracted to provide logistics for the hiring of airport screeners. The Post reported that, according to auditors, "$15 million in expenses submitted by Eclipse could not be substantiated." The paper also revealed that Eclipse's owner paid herself more than $5 million for nine months' work before taking a $270,000 pension. The major global consulting firm Accenture and its subcontractors were awarded a 10-year deal worth up to $10 billion to develop "a 'virtual border' that would electronically screen millions of foreign travelers." The system, the Post reported, is marred by obsolete technology and "a fingerprint system that does not use the government's state-of-the-art biometrics standard."

Higham and O'Harrow arranged to meet with Michael P. Jackson, Deputy Secretary of DHS, to get the agency's response to the allegation that it was authorizing rampant spending of tax dollars with little oversight. The Post reported that "Jackson praised government employees and said their efforts have made the country safer. But Jackson acknowledged that 'there were problems, and significant ones,' with some contracts."

The Post team also discovered a web of connections between Kentucky Congressman Hal Rogers (R-KY) -- the powerful leader of the House Appropriations Subcommittee on Homeland Security -- and businesses that bid for federal contracts. In one case, a company moved part of its business into Rogers' district and was later awarded a lucrative government contract.

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