Saturday, October 22, 2011

Pentagon Buys from Crooks

I have a simple rule of thumb, if someone tries to rip me off I never do business with them again. I'd rather starve than shop at Walmart; I'd rather use a crystal set than buy another modem from Best Buy.
My internet connection is a little slow.
The Pentagon isn't so picky. In the past decade the Defense Department has thrown over $1 trillion at companies that have a proven history of defrauding them. There are lots of reasons for this.
  • Some of the fraud profit works its way back to the DoD in the form of bribes for future contracts.
  • Some of the fraud profit go to buying congressmen who insure there are no laws to prevent corrupt businesses from contracting with the US government.
  • Some of the fraud profit goes to providing tchotchkes to procurement officers. It's amazing how far a few worthless trinkets go to buying the undying loyalty of DoD employees.
  • Some of the fraud profit go to hiring former DoD employees at fat salaries mostly to party with current DoD employees. (An "Ethics Opinion" is a meaningless gesture. The point of hiring former DoD procurement officers is not to gain some kind of special access or knowledge but to convince current DoD procurement officers that rich rewards await in the future for anyone who cooperates now.)
  • Some of the fraud profit goes to paying inadequate fines and penalties for getting caught.
Of course most of the fraud profit goes to top executives in the form of bonuses.

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