Investigative Group

Clinton’s State Department Blew $6 Billion In Contracts And We’re About To Learn Why

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Democratic presidential nominee Hillary Clinton may soon have to answer questions about an estimated $6 billion in contract mismanagement, fraud and incompetence that happened under her watch at the Department of State.

Non-profit government watchdog Cause of Action Institute (CofAI) filed a Freedom of Information Act request Friday for records related to a March 2014 management alert issued by the department’s Inspector General (IG).

“The total value of the contracts the [IG] reviewed exceeded $6 billion,” the DofAI’s FOIA request said. “Many of these cases arose during the tenure of Secretary Hillary Clinton.” Clinton was the country’s top diplomat from January 2009 to February 2013.

The IG alert that unveiled the mismanagement was based on three investigations and two contract-related audits.

The alert revealed that State Department officials lost contract files and maintained incomplete contract files, thus exposing taxpayers “to substantial financial losses.” Federal law and State Department policy requires maintenance of all files required to document a government procurement from start to finish.

In a blistering summary, the IG alert said such failures create “conditions conducive to fraud, as corrupt individuals may attempt to conceal evidence of illicit behavior by omitting key documents from the contract file. It impairs the ability of the department to take effective and timely action to protect its interests and, in turn, those of taxpayers. Finally, it limits the ability of the government to punish and deter criminal behavior.”

Among the examples cited by the IG were:

• Modifications and task orders were awarded to a company owned by the spouse of the State Department official managing the $52 million contract. The contract’s file was missing documentation reflecting those modifications and task orders, an IG investigation uncovered.
• A State Department contracting officer on a contract valued at $100 million falsified technical review information and provided the contractor with advance pricing information.
• Forty-eight of the 82 files the IG reviewed related to $2.1 billion in contracts supporting the U.S. mission in Iraq lacked required documentation.
• None of the files reviewed by the IG for eight contracts issued by the department’s Bureau of African Affairs and valued at $34.8 million contained required documentation.

The CofAI said “the public has a significant interest in knowing whether the department implemented the recommendations the [IG] made in its previous reports … the requested records will further inform the public about the resolution of contract management problems with the Department of State.”

The State Department has 20 working days to prepare an initial response to CofAI’s request.

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