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DynCorp Defrauding Taxpayers for War Spending

November 30, 2009

Military contractor DynCorp has admitted that it violated the Foreign Corrupt Practices Act on $300,000 of payments to subcontractors that may have been used to bribe officials in exchange for swift issuance of visas and licenses needed to conduct overseas business. Dyncorp also continues to be under fire from lawsuits filed by Ecuadoran and Colombian citizens and three Colombian provinces, who charge that the company’s pesticide spraying for coca eradication was illegal and created health hazards and environmental harm. DynCorp subcontractor Agility was also recently charged for fraudulently billing the military on billions of dollars of food supplies.

A federal inspector looking into Iraq war spending in 2007 named DynCorp for tens of millions of dollars of accounting discrepancies, missing weapons, and unauthorized billings, including $4.2 million the company billed for building a police training camp that was never used. A former project manager working for a subcontractor under the direction of DynCorp told a Congressional committee that any questions raised about costs or billings would trigger intervention from DynCorp headquarters, which would “kill the question.” He told of “armored cars, weapons, and medical supplies (that) did not exist even though DynCorp had been paid for these items.” He related a “classic example” of DynCorp’s overbilling: DynCorp’s subcontractor bought laptops for $1400, then billed DynCorp $2800 for them, so the company could turn around the 100% markup to the US taxpayer.

Last year, Dyncorp was sued for fraud by an Afghan subcontractor who alleged the company failed to pay $7 million owed to them, threatened their workers, and stole $2.5 million worth of equipment. The company is also notorious for its employees’ involvement in Bosnian sex trade.

Herbert J. Lanese served as DynCorp’s President and CEO from 2006 through 2008; as a Director in 2009, he took home nearly $4.9 million.

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