Tag Archive: POGO


The Human Cost of Government Waste and Fraud

Thursday 02 September 2010

by: Dina Rasor, t r u t h o u t | Op-Ed

There is something missing in the constant political argument about the size of the federal government. Most of the American public want federal programs when needed for disasters, national defense, medical research and the Medicare and Social Security safety net. What the public has said in many polls is that they want not big or smaller government, but effective government. And there is a whole group of good government groups in Washington that work diligently on exposing government fraud and waste and trying to fix it.

One of these organizations, the Project On Government Oversight (POGO), has been exposing fraud and waste for almost 30 years.(Disclaimer: I founded POGO and still serve on its board of directors.) We have worked for decades to expose the wrongdoing and then push Congress and the administration to fix the problem so there won’t be more waste and fraud that so disillusions the public.

POGO’s former director of investigations, Beth Daley, worked on exposing MMS (Mineral Management Services, the bureaucracy that helped bring us the BP oil disaster) years before anyone else paid any attention to it. Through Beth’s and others’ work at POGO, the royalty program was changed and all the oil companies had to pay a fair price for the oil that was taken from federal lands. This lead to millions of dollars of income for the federal government. She was also a champion for national security whistleblowers and worked, as I have, to try to change the decades-long and insidious waste and fraud in the Department of Defense (DoD) and other national security agencies. It is so bad that the DoD now openly admits that it is unauditable, a dismal and awkward word that they use to say that they can’t really figure out where their money is and how much is stolen or wasted.

While POGO and other good government groups can, with small resources, expose fraud and waste, and suggest changes, it is up to the federal government to do true oversight on themselves to stop the fraud and waste, recover the fraudulent contract money (are you listening Department of Justice?) and reform the system. All we can do is embarrass them in public and try to demand accountability. Beth dedicated ten years of her life to this effort.

So, who really suffers from the fraudulent and wasteful spending? The bureaucracies get their money, the members of Congress get jobs in their districts and we put it on the federal credit card even though China owns a large portion of our debt. But there are programs that get cut or have less money because of Big Oil’s and Big Weapons’ wasteful and fraudulent spending. One of these areas is health research, something that the US excels at (versus health care) and we can lead the world in saving lives.

Why do I bring up health research as something that could have more funding if we got control of the fraud and waste in our government? Because Beth died in her sleep Sunday, August 22, at age 43 after an excruciating fight with cancer for seven years. She leaves behind a grieving family including twin seven-year-old girls. She had the type of cancer that was genetically based and prime for a cure with the newest genetic research breakthroughs. Unfortunately, she didn’t live to see that breakthrough. If the federal government had recovered just some of the waste and fraud that Beth uncovered in her years at POGO, perhaps that money could have been used to save her and so many others who face and fight cancer and other life-threatening diseases every day. That wasted money helped no one other than the recipients of the contracts and their government cronies.

President Eisenhower, a military man, said, “Every gun that is made, every warship launched, every rocket fired, signifies in the final sense a theft from those who hunger and are not fed, those who are cold and are not clothed.” I am realistic and know that we need to buy weapons to protect our country and we need oil to keep America moving. However, a modern-day version of the that quote could be that every fraudulent or wasteful government contract that the government allows and tolerates, steals federal funding away from health research to save lives and endless suffering, education that can lift people out of their poverty and misery and energy research and manufacturing that can perhaps give us even more national security by giving us energy independence.

Beth’s work will go on at POGO and other good government groups, but, after 30 years of exposing the fraud and waste, I am imploring all the branches of the federal government to look at what we and others uncover, recover the money and fix the problem and start seriously doing oversight on itself despite the cronyism and politics. The price of this fraud and waste seems at times to be vague, but the needless loss of just one mother to her young daughters is an illustration of the damage done. Ironically, Beth saved the government millions of dollars in oil royalties, but lost her life to a disease that still needs more research funding from that same government.

After uncovering fraud for 30 years and being very frustrated at the lack of government reform to stop it, I will be launching a new column for Truthout in the fall called “Solutions: Making Government Work.” I will be writing some of the columns myself with anonymous sources on small slices of solutions to march through the mounds of government waste and fraud and I will also have guest columnists who can put their name in the column and use the wisdom that they have seen in their neck of the bureaucracy to fix the system to stop or at least curb this needless government fraud and waste. I want to dedicate this new column to Beth’s memory and work in the hope of fixing the federal government, instead of just exposing the problems. To learn more about Beth’s amazing life, go

I invite Truthout readers to contact me if you have a realistic solution for a part of the federal government and would like me to write about it in the column or if you would like to submit a column. We all need to pick up where Beth had to stop and keep on in her memory to fix this problem that damages so much of our national life.

Link to original:  http://www.truth-out.org/the-human-cost-government-waste-and-fraud62911


Federal Contractor Misconduct Database – POGO


Link to Original Page:  http://www.contractormisconduct.org/index.cfm

The original page has better formatting and links to each particular item’s full story.  –GFS



About POGO’s Federal Contractor Misconduct Database (FCMD)

The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations.  In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data.  We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »


DispositionCourtMisconductEnforcement AgencyContracting PartyDateAmount

Boeing Company

Arms Export Control Act Violation (Transfer of Rocket Data to China)

SettlementCivilImport/ExportState Dept.International03/04/03  $ 6.0m

Beck v. Boeing (Gender Discrimination Class Action)

SettlementCivilLaborNon-GovernmentalNone07/16/04  $ 40.6m

Boeing Launch Services Suspension

Suspend/Debar – CompanyAdministrativeEthicsDefense – Air ForceDefense – Air Force07/24/03  $ 0.0m

Uncertified Welders (False Claims Act)

SettlementCivilGovernment Contract FraudDefense – ArmyDefense – Army04/04/03  $ 0.5m

Defective Pricing

Settlementundisclosed/unknownDefective PricingDefense – GeneralDefense – General08/13/98  $ 1.9m

Discriminatory Pay Disparities

SettlementCivilLaborLaborNone11/19/99  $ 4.5m

EEOC v. Boeing (Americans with Disabilities Act Discrimination)

SettlementCivilLaborEEOCNone12/14/01  $ 0.1m

777 Aircraft Program (Unallowed Costs)

SettlementAdministrativeDefective PricingDefense – GeneralDefense – General09/01/97  $ 6.0m

Improper NASA Invoices

SettlementCivilGovernment Contract FraudNASANASA11/09/00  Unknown

Defense Services to Russia and Elsewhere (Arms Export Control Act Violation)

Administrative AgreementAdministrativeImport/ExportState Dept.None09/29/98  $ 10.0m

Wedgetail Project (Arms Export Control Act Violation)

Administrative AgreementAdministrativeImport/ExportState Dept.Defense – Air Force03/30/01  $ 4.2m

Machine Tools Export Violation (China)

FineAdministrativeImport/ExportCommerceNone11/14/01  $ 2.1m

O’Connor v. Boeing

SettlementCivilEnvironmentNon-GovernmentalNone09/21/05  Undisclosed

Oberman v. McDonnell Douglas (C-17 overcharge)

SettlementCivilCost/Labor MischargeDefense – Air ForceDefense – Air Force11/19/97  $ 2.0m

Roby v. Boeing (Defective Chinook Helicopters)

SettlementCivilGovernment Contract FraudDefense – ArmyDefense – Army08/03/00  $ 54.0m

Delivering Military Aircraft Containing Russian Titanium (Berry Amendment Violation)

SettlementCivilGovernment Contract FraudDefense – Air ForceDefense – Air Force09/29/04  $ 7.4m

United States of America v. Darleen A. Druyun

Pleaded GuiltyCriminalEthicsDefense – Air ForceDefense – Air Force10/01/04  $ 0.0m

United States v. Michael M. Sears (Boeing CFO)

Pleaded GuiltyCriminalEthicsDefense – Air ForceDefense – Air Force02/18/05  $ 0.3m

Werbowsky, et al. v. Boeing et al. (Securities Class Action)

SettlementCivilSecuritiesNon-GovernmentalNone09/21/01  $ 92.5m

Violations of Anti-Trust Laws

Administrative AgreementAdministrativeAntitrustFTCNone12/05/96  $ 0.0m

United States ex rel. Smith, et al. v. Boeing (Using Defective Airplane Parts)

PendingCivilGovernment Contract FraudMultiple AgenciesMultiple Agencies04/18/06  $ 0.0m

Radioactive and Toxic Contamination

SettlementCivilHealthNon-GovernmentalNone01/11/06  Undisclosed

Pension and Benefit Plan Inquiry

PendingAdministrativeLaborSECNone10/21/04  $ 0.0m

Illegal Hiring of Government Officials and Improper Use of Proprietary Information

SettlementCivilEthicsMultiple AgenciesMultiple Agencies05/15/06  $ 615.0m

Oberts v. McDonnell Douglas Services/Boeing et al. (Responsibility for Medical Expenses)

PendingAdministrativeLaborLaborNone01/18/05  $ 0.0m

KC-135 and RC-135 Aircraft Parts Overbilling

SettlementCivilCost/Labor MischargeDefense – GeneralDefense – Air Force07/16/07  $ 1.1m

Arms Export Control Act Violation (QRS-11 Gyrochip)

SettlementAdministrativeImport/ExportState Dept.None03/28/06  $ 15.0m

Aircraft Quality Control Problems

FineAdministrativeConsumer AffairsTransportationNone08/02/00  $ 1.2m

Rocky Flats Radioactive Waste Pollution

Judgment Against DefendantCivilEnvironmentNon-GovernmentalEnergy06/02/08  $ 89.4m

USA v. Lesnik (Unauthorized Possession of Defense Information)

Pleaded GuiltyCriminalPoor Contract PerformanceJusticeDefense – General07/02/08  $ 0.0m

Exceeding Limits on Purchases From Foreign Suppliers

FineN/AImport/ExportState Dept.Defense – General06/30/08  $ 3.0m

Water Pollution (Simi Valley, CA)

FineAdministrativeEnvironmentState/LocalNone09/11/07  $ 0.5m

Total Number Misconduct Instances 29 $ 957.2m


Top 100 Contractors by contract dollar amount

Methodology of this ongoing effort

What’s new


Archive previous rankings and more

This is the letter sent out recently by Project On Government Oversight regarding their Federal Contractor Misconduct Database.

Enjoy!  -GFS





Breaking news: POGO has just released an updated and expanded version of our Federal Contractor Misconduct Database (FCMD), which now includes information on the misconduct history of the top 100 federal contractors.  The updated database also features several format changes and new search and sort functions that will make it more accessible and user-friendly.  POGO hopes that the FCMD will be used as a valuable tool to ensure that taxpayer dollars are only awarded to responsible contractors.



Click here to view the updated database.  And be sure to check out our press release to learn more.

Yesterday afternoon, President Bush signed into law the FY 2009 National Defense Authorization Act, which includes a provision to establish a government-wide database with information on the integrity and performance of federal contractors and grantees.  The good news is that the new government database will be modeled after our FCMD, but since the government’s version will not be made available to the public, we will continue to maintain our database as a free public resource with updated information on the misconduct of the top federal contractors.  We applaud the leadership of Rep. Carolyn Maloney (D-NY) and the efforts of countless Members of Congress who worked hard to ensure that the Defense Authorization Act included a provision to improve contractor accountability.



The FCMD now lists over 750 instances of contractor misconduct dating back to 1995, including government fraud and violations of environmental, securities, and labor laws.  Lockheed Martin still tops the list with 47 instances of misconduct, but it’s worth noting that 25 of the top 100 contractors appear to have a clean track record.



To coincide with the release of the updated FCMD and the passage of the Defense Authorization Act, POGO is also releasing a fact sheet that will hopefully dispel many of the myths surrounding a federal contractor responsibility database.  Click here to learn more.


Warm regards,




Danielle Brian

Executive Director

Project On Government Oversight

This came in the mail today.  I post it to share it with all of you.  -GFS



July 22, 2008


POGO Letter to the Boeing Company regarding Airtech International Inc.’s product substitution


Related: POGO Letter to the U.S. Air Force Suspension and Debarment Office, July 22, 2008.







July 22, 2008



Boeing Corporate Offices

100 North Riverside

Chicago, Illinois 60606


Boeing Commercial Airplanes

P. O. Box 3707

Seattle, Washington 98124


Boeing Integrated Defense Systems

P. O. Box 516

St. Louis, Missouri 63166



Re: Airtech International, Inc.


To Whom It May Concern:


My organization, the Project On Government Oversight, revealed in May that The Boeing Company, along with other aerospace manufacturers, was being supplied with bogus materials by a composite materials supplier called Airtech International, Inc.  See: http://www.pogo.org/p/transportation/ta-080522-faa.html


As you know, your company requires strict compliance with its materials specifications.  Many of Boeing’s specifications state that suppliers cannot change material after qualification unless material is re-qualified. For example, attached are numerous Boeing specifications which state that a supplier cannot change material, its source, or the methods of manufacture after the material is qualified without a re-qualification of the material. [Attachment A]


Airtech, on a vast scale, has supplied bogus materials or changed the manufacturer or manufacturing process without proper notification to its customers, according to a 2006 Army Criminal Investigation Command letter to the Air Force, which states, “At one time or another, Airtech has supplied some fours of nonconforming product to every aircraft manufacturer in the world.”  Boeing is explicitly stated as a company which Airtech defrauds. Also, as stated by the Army letter, “Airtech at its own discretion, routinely changes the composition, the manufacturer or the manufacturing process of products without disclosure to its customer, which in most case would require requalification of the product.”  [Attachment B]


One of the greatest risks is that “These products are originally qualified for safety concerns. Changes to the products or processes could result in contaminations to the end product, which could result in the loss of parts or safety issues if the part is put into use,” according to the Army.  Specifically, instances of product substitution were confirmed at Vought Aircraft on its subcontract work on manufacturing of the longeron accessory compartment in the Boeing C-17 program for the U.S. Air Force.   [Attachment B]


Does the Army Criminal Investigation Command letter concern Boeing since it was concluded that Airtech, on a vast scale, is falsifying certifications on shipment to you and your subcontractors?


Why is Airtech still an approved Boeing supplier if they are changing material after qualification?


On your specifications [Attachment C], release film, flash tapes and peel plys are considered contact material and, in some cases, peel ply is a secondary bonding material on both composite parts and metal bond parts. Does Boeing consider this a safety concern since, as stated by the Army, if contaminants are left on the finished part due to substitution, this can ultimately contribute to composite delamination or other safety or maintenance issues?


If you have any questions or request assistance or further information, do not hesitate to contact me at 202-347-1122.





Nick Schwellenbach


Project On Government Oversight


To See Attachments, go to document at www.pogo.org.  Support Project On Government Oversight!







Last Inspector’s Blog – Fighting FAA & Boeing Fraud from the 737 to the 787

Alert From the Project On Government Oversight Supporting their Op-Ed in the Seattle Post-Intelligencer  

Monday, May 12, 2008, 12:14 AM
Posted by Administrator (www.thelastinspector.com)



If you thought the last blog was noteworthy, check out this alert on the Project On Government Oversight’s website, which gives facts and data backing up their op-ed in the Seattle Post-Intelligencer that showed that Boeing and the FAA knew my report on massive rollerstamping fraud by BCA inspectors was correct. Yet over the years they knew it was the status quo at BCA they did nothing about this fraud allowing defects of unknown number and severity to deliver to airline and government customers. In fact, the STA (Special Technical Audit) of BCA in 1999/2000 was actually used to further weaken an already ineffective quality system, rather than to make it more effective, as an reasonable person would deduce was what was needed.

This effort to weaken and make “less prescriptive” Boeing’s already sievelike quality system was called the “Quality Management System,” or QMS. Why would Boeing further weaken such a compromised quality assurance department as documented in the STA? Because, of course, as noted on my website, Boeing management was always aware rollerstamping was going on on a massive scale in QA because it was Boeing management who wanted that fraud to take place for cost and production flow reasons. And they knew they could count on their counterparts in the FAA to look the other way.

In January, 2002, I began my effort to end the rollerstamping in Boeing QA after my manager of the time proved to me it was Boeing management directed fraud, by going to the FAA. After several rounds of trying to get the FAA and Boeing Headquarters management to end that fraud placing passenger and crew lives at extra risk for a few more bottom line dollars for Boeing, Boeing dared me to go public, knowing they had FAA management to cover for their continuing fraud. The FAA had reliably done so since at least the 1999 STA.

That’s where the “Dual Failures” charade came in, which began, not coincidentally, just after I last spoke with Boeing about the subject, in October, 2003. This was a cover for Both FAA and Boeing management should I go public, as they and I expected I would. However, due to aforesaid reasons, I was unable to do so in a timely manner. They thought that I had decided to not go public after all, so they dropped this “Dual Failures” cover up project. More proof of Boeing/FAA management complicity in ensuring the rollerstamping quality system at BCA can continue. What more proof does DOT OIG Inspector General Scovel need to investigate the crooks in the FAA “overseeing” Boeing Type and Production Certificates? You have to wonder at what point they will step up and do their jobs in this critical area. Corrupt FAA mmanagement are not going to out themselves. Real oversight of BCA is needed now that will not only restore Boeing’s quality system to minimum standards, but also restore Boeing’s and/or the FAA’s oversight of Boeing supplier’s compliance with minimum quality system standards, which the OIG has documented serious noncompliances with. The root causes of both are the same–corrupt BCA and FAA management.



May 8, 2008

Internal Boeing Documents Support Whistleblower’s Allegations: Aircraft Quality Control Problems Cited

For Immediate Release
Contact Nick Schwellenbach (202) 347-1122

Internal Boeing documents obtained by the Project On Government Oversight show that the allegations of a former Boeing quality control inspector facing criminal charges have merit. Quality control problems at Boeing increase the likelihood that defective aircraft parts end up on planes and flaws in the manufacturing of planes remain uncorrected. This can potentially threaten public safety and drive up the cost of aircraft maintenance. These documents are linked at the bottom of this release.

Gerald Eastman, the former Boeing inspector, is facing a second trial of criminal charges for disclosing Boeing information to the press. His first trial last month resulted in a mistrial when jurors could not agree on whether Eastman committed “computer trespass.” Mr. Eastman claims that his involvement with the press stemmed from the lack of corrective actions taken by Boeing and the government in response to his disclosures of wrongdoing to them.

An internal Boeing memo sent to Boeing employees in October 2000 stated that misuse of “production stamps” or “roller-stamping” can result in negative consequences for the company and the individual misusing their stamp. Roller-stamping is the misuse of production stamps to stamp work on critical parts and assemblies as complete and fully inspected when there has only been a cursory inspection, if one at all, of the part or assembly in question. Eastman’s central claim is that he had perceived widespread “roller-stamping” and Boeing did little to curtail the practice.

“These documents show that Eastman clearly had a reasonable basis for his belief roller-stamping was occurring,” according to Nick Schwellenbach, POGO investigator. “It’s one thing to break company policy on releasing documents and getting fired, it’s another matter to file criminal charges. Who do the prosecutors work for?”

The Boeing memo came months after the Federal Aviation Agency conducted a special technical audit of Boeing that concluded that there were systemic quality control problems. The 2000 FAA special technical audit found “in some cases, manufacturing planning was not adequate, requirements were not followed, inspections were not specific, or personnel were not knowledgeable about requirements.” Thus, “parts, assemblies, and installations are released through the system that do not conform” to approved designs. Also, in 2000, the FAA proposed “a record $1.24 million in civil penalties against Boeing for inadequate supplier oversight and for failing to quickly report cracked parts on two older jetliners,” according to a news report (James Wallace, “FAA Audit Rips Boeing Over 100 Production, Design Problems Detailed; Company Plans Corrective Action,” Seattle Post-Intelligencer, August 11, 2000.).

Years later, roller-stamping was still occurring when Eastman acted on his concerns.

Boeing certainly was aware of the practice because a Boeing document dated January 2004, states that, “There appears to be a systemic issue within BCA [Boeing Commercial Aircraft] involving parallel process breakdowns of mechanics and inspectors involved in assembling and inspecting aircraft, assemblies and parts.” The 2004 document also states that the FAA examined 55 issues at Boeing between 2002 and 2003 and found that “24% of these issues have involved instances where the mechanic and inspector created and accepted nonconforming conditions”—i.e. roller-stamping.

In further support of Eastman’s claims, other Boeing employees became whistleblowers when they reported that Boeing supplier Ducommun was regularly supplying non-conforming parts to Boeing, according to the whistleblowers’ False Claims Act lawsuit obtained by POGO. Now-former Boeing employees Taylor Smith, Jeannine Prewitt and James Ailes were then retaliated against by management because Boeing allegedly did not want to deal with the repercussions of their findings.

For additional information

Boeing Commercial Airplane Group memorandum, Use of personal stamps in our production system ,” October 31, 2000.

Federal Aviation Administration, Special Technical Audit of Boeing Commercial Airplane Group ,” December 1, 1999, through February 11, 2000.

Boeing Airplane Program Systemic Issues Chartered Team 1, Investigation of ‘Dual Failures ,'” January 2004.

United States of America ex rel Taylor Smith, Jeannine Prewitt and James Ailes vs. The Boeing Company and Ducommun, Inc. , Federal District Court of Kansas. Filed on March 11, 2005.

Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government.