Pentagon still doing business with contractor that allegedly spent tax dollars on luxury cars
A contractor is accused of bilking DOD out of $50 million.
A military contractor that just last year was accused of having cheated the Pentagon out of more than $50 million is still actively working on at least one government contract, according to a new report from the office of Sen. Claire McCaskill, D-Mo., the top Democrat on the Senate Homeland Security and Government Affairs Committee.
Secretary of Defense James Mattis, appearing at a Senate committee hearing Thursday, said that an ongoing investigation into the contractor, New Century Consulting (NCC), will likely result in criminal charges but could not explain why the Pentagon has not terminated the NCC contract or barred the company from doing work for the government.
“I would like somebody to respond to me, why in the world we are still doing business with these crooks?” McCaskill asked Mattis during Thursday’s Senate Armed Services Committee hearing.
NCC, a British company, is currently the subcontractor on a project run by Raytheon, a major U.S. defense contractor. Neither NCC nor Raytheon responded to requests for comment.
NCC came under fire last year after a McCaskill report charged that, as a subcontractor on a project in Afghanistan between 2008 and 2013, it had billed the government for $51 million in improper expenses.
Top NCC officials expensed Porsches, a Bentley and an Aston Martin, according to McCaskill's report, which was based on an audit by the Defense Contract Audit Agency (DCAA). The NCC officials also inflated their salaries and billed roughly $200,000 for salaries for their spouses, according to the audit.
The contract was for a program called Legacy which was, in part, supposed to help beef up the intelligence capacity of Afghan security forces.
McCaskill’s report also concludes that NCC, the subcontractor, originally developed and pitched the contract and steered it towards a specific contractor, then known as Jorge Scientific Corporation. Jorge came under its own scrutiny when some of its employees were caught on cellphone video in 2012 staggeringly drunk and high on narcotics.
NCC is under investigation by the Army’s Criminal Investigative Command, which Mattis noted as the reason he could not comment in detail on the case.
But despite the very public revelations of allegedly misspent taxpayer funds in August 2017 and the fact that it is currently under investigation, NCC has continued to work on at least one DOD contract, as a subcontractor under Raytheon, a major U.S. defense contractor.
During the hearing, McCaskill noted that the military is not legally required to wait until an investigation is complete before it suspends or debars a company from doing business with the U.S. government, but that it has not elected to do so in this case.
“I am not going to shut up about this until somebody is held accountable for people driving Bentleys,” McCaskill said.
“Senator, hundred percent with you on this,” Mattis said. Noting that the contract that landed NCC in hot water originated before his tenure, he added, “I wish I’d been here in the job in 2012.”