06.26.08

Judiciary Committee Reports Leahy Bill To Address Wartime Fraud

The Senate Judiciary Committee today reported critical legislation to extend the window for the federal government to prosecute wartime contracting fraud, including fraud in Iraq and Afghanistan.  The Wartime Enforcement of Fraud Act (WEFA) was introduced in April by Committee Chairman Patrick Leahy (D-Vt.) and Committee Member Charles Grassley (R-Iowa).  The legislation would close a loophole in a World War II-era law that has allowed individuals and corporations to go unpunished for delivering defective products and overbilling for their services.

The bill updates a law that was enacted in 1942 that suspended the statute of limitations on contracting fraud during times of war.  The Wartime Suspension of Limitations Act of 1942 enabled the government to prosecute these offenses up to three years after the end of a declared war.  The Leahy-Grassley bill modifies the law to allow the prosecution of war time fraud in conflicts that have been authorized by congress, even though they aren’t declared wars.

“We should act now, as Congress did during World War II, to protect American investments during times of war,” said Leahy.  “This legislation is needed to ensure no one takes advantage of times of war to unfairly profit from contracting fraud.  I hope all Senators will join me and Senator Grassley in supporting this bill on the Senate floor.”

“Congress has a constitutional duty to ensure that taxpayer dollars are spent in a manner consistent with the spirit and intent of the law. This important legislation simply updates the existing law that dates back to World War II. It will help ensure that our criminal laws are not circumvented by contractors who defrauded the government during our conflicts in Afghanistan and Iraq,” Grassley said.

The bipartisan legislation would help federal prosecutors better handle the abuse of contracts that have been awarded on a cost-plus or no-bid basis.  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:

  • Suspends 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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Leahy statement on introduction of the Wartime Enforcement of Fraud Act of 2008

Section-by-Section Analysis (for background)

Text of Wartime Enforcement of Fraud Act 

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