[mburbank]

WASHINGTON, Oct. 31 /U.S. Newswire/ -- The final version of the $87 billion spending bill for Iraq and Afghanistan is missing provisions the Senate had passed to penalize war profiteers who defraud American taxpayers. House negotiators on the package refused to accept the Senate provisions.

The Senate provision was authored by Sen. Patrick Leahy (D-Vt.), Sen. Dianne Feinstein (D-Calif.), and Sen. Richard Durbin (D-Ill.). It was one of the last major sticking points this week as negotiators worked through the compromise appropriations bill. The conferees narrowly defeated the amendment after lengthy debate, with House negotiators offering no substitute and no willingness to compromise, despite repeated offers from Senate conferees to negotiate the language. Republican and Democratic Senate conferees consistently supported the provision, which had been unanimously accepted during Senate Appropriations Committee markup of the bill. Leahy, Feinstein and Durbin are members of the Appropriations Committee and also of the Judiciary Committee, which has jurisdiction over the criminal justice system.

"Congress is about to send billions and billions of dollars to a place where there is no functioning government, under a plan with too little accountability and too few financial controls," said Leahy. "That's a formula for mischief. We need strong disincentives for those who would defraud taxpayers, and removing this protection is another major blot on this bill."

"We are about to spend a lot of money in Iraq, quickly and with few real controls on how it is spent," said Feinstein. "The least we can do is prevent private companies from taking advantage of the American Government, its people, and the men and women who are risking their lives every day to make Iraq, and the world, a better, safer place to live. It was a mistake to strip the anti-profiteering provision from the conference report, and restoring it through this bill would send a clear signal that this kind of activity will not be tolerated."

"When the Senate Appropriations Committee considered this supplemental request, Senators Leahy, Feinstein, and I joined together to criminalize war profiteering -- price gouging and fraud -- with the same law that was passed during World War II. Yet this amendment, was stripped out of the final bill," said Durbin. "I fail to understand how anyone can be opposed to prosecuting those who want to defraud and overcharge the United States government and the American taxpayers."

U.S. fraud statutes protect against waste of tax dollars at home, but none expressly prohibit war profiteering and none expressly confer extraterritorial jurisdiction overseas. The Leahy-Feinstein-Durbin amendment would criminalize "war profiteering" -- overcharging taxpayers for any good or service with the specific intent to excessively profit from the war or reconstruction efforts in Iraq. The bill also prohibits fraud and false statements in any matter involving a contract or the provision of goods or services in Iraq. These new crimes would be felonies, subject to criminal penalties of up to 20 years in prison and fines of up to $1 million or twice the illegal gross profits of the crime. Leahy described it as "strong and focused sanctions" that are narrowly tailored to criminalize and create tough criminal penalties for fraud or excessive profiteering in contracts, here and abroad, related to the war or reconstruction efforts in Iraq.

Leahy, Feinstein and Durbin will re-introduce the legislation again as a separate bill and will work to win its passage. But because criminal penalties cannot be made retroactive, the absence of penalties in this supplemental appropriations bill will hamper efforts to crack down on war profiteering that involves funds from this bill.