WASHINGTON – U.S. Senator Claire McCaskill, the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee, today blew the whistle on a federal contract that left taxpayers on the hook for over $50 million in questionable costs, including seven luxury vehicles and $400,000 average salaries for significant others of corporate officers to serve as “executive assistants.”
“Whoever approved of this spending should be fired—it’s a slap in the face to Missouri taxpayers and the entire contracting process,” McCaskill said. “I’m going to get to the bottom of what happened with this contract and why a company with so many previous problems keeps getting contracts.”
In a letter to Secretary of Defense James Mattis, McCaskill demanded answers on the “Legacy East” contract, a project to provide counterinsurgency intelligence experts to mentor and train the Afghan National Security Forces, after the Defense Contract Audit Agency’s (DCAA) review of the contract called into question $50 million in expenses.
The audit revealed that a subcontractor, New Century Consulting (NCC), billed over $50 million in questionable costs to the Army through its contractor, Imperatis. The costs passed on to taxpayers included seven luxury cars—including Porsches, Alfa Romeos, a Bentley, an Aston Martin, and Land Rover. In addition, the significant others of the CEO and CFO were kept on payroll as “executive assistants,” despite the fact that these employees worked from home and never traveled to customer locations, and no documentation existed to prove they actually performed any work. Despite all this, in 2012 the average salary of these “executive assistants” reached approximately $420,000 each.
The DCAA also found that the company spent over $1,500 on alcohol, and $42,000 in cash on automatic weapons despite regulations or contract provisions prohibiting such expenditures. In addition, NCC had millions of dollars in other questioned or unallowable expenses, including severance payments, rent, unnecessary licensing fees, extensive austerity pay, and expenses for air travel for personal reasons.
In response, McCaskill is demanding answers, including:
- Information on which Department of Defense (DoD) officials had award, management, and/or oversight responsibilities related to the Legacy East contract between 2008 and 2013.
- The steps DoD is taking to recover the questioned costs.
- Whether the U.S. government has considered the contractor identified in this audit for suspension or debarment.
The DCAA conducted its review in part because McCaskill had previously demanded answers after an earlier audit of the contract by the Special Inspector General for Afghanistan Reconstruction revealed millions of dollars in questionable costs. The primary contractor, Imperatis, formerly Jorge Scientific, has previously drawn fire from McCaskill on multiple occasions, including in 2012 when video surfaced of Imperitis contractors intoxicated in what former employees called a pattern of inappropriate behavior. In 2016, Jorge Scientific/Imperatis defaulted on a major IT contract that had been awarded after McCaskill repeatedly raised concerns.
McCaskill is a leading voice in the Senate for saving taxpayer dollars through contracting reform and oversight. McCaskill waged a successful six-year effort to crack down on waste, fraud, and abuse in wartime contracting. Last year, McCaskill called for answers on why the U.S. Army, Air Force, and Bureau of Prisons hired a contractor, Glocoms, despite its history of poor contract performance. McCaskill has also successfully expanded protections for whistleblowers—who ?help to identify waste, fraud, and abuse—to government contractors, subcontractors, and others who the federal government directly or indirectly hires through bipartisan bills that have been signed into law.
Read McCaskill’s letter to Secretary Mattis HERE.