Misbehaving Contractors are Recovery Act Winners
Free market flawed, says survey
| Despite what you’ve heard, “free-market capitalism” is an oxymoron. Actually, capitalism -- that alliance of elite and state -- could not survive in a freed market, one where government defended rights. Markets don’t need control so much as governments need to not reward businesses who lie to the public but to punish them. To free the market, we need to replace taxes with the public recovery of rents and subsidies with a dividend to the citizenry in general. We trim, blend, and append two 2009 articles from (1) BBC News, Nov 9, on unpopularity of markets by James Robbins and (2) Clawback, Nov 13, on contractors by MLEE. |
by James Robbins and by MLEE
free market, capitalism, soviet union, berlin wall, financial crisis, regulation, contractors, misconduct Twenty years after the fall of the Berlin Wall, a new BBC poll has found widespread dissatisfaction with “free-market capitalism”.In the global poll for the BBC World Service, only 11% of those questioned across 27 countries said that it was working well.
Most thought regulation and reform of the capitalist system were necessary.
There were also sharp divisions around the world on whether the end of the Soviet Union was a good thing.
In 1989, as the Berlin Wall fell, it was a victory for ordinary people across Eastern and Central Europe. It also looked at the time like a crushing victory for “free-market capitalism”.
Twenty years on, this new global poll suggests confidence in free markets has taken heavy blows from the past 12 months of financial and economic crisis.
More than 29,000 people in 27 countries were questioned. In only two countries, the United States and Pakistan, did more than one in five people feel that capitalism works well as it stands.
Almost a quarter -- 23% of those who responded -- feel it is fatally flawed. That is the view of 43% in France, 38% in Mexico and 35% in Brazil.
And there is very strong support around the world for governments to distribute wealth more evenly. That is backed by majorities in 22 of the 27 countries.
JJS: Finally time to share the commonwealth?
If there is one issue where a global consensus seems to emerge from the survey it is this: there are majorities almost everywhere wanting government to be more active in regulating business.
JJS: Forget rules administered by bureaucrats. Just call on the police to arrest liars and frauds.
It is only in Turkey that a majority want less government regulation.
JJS: Why expand the powers of something as corruptible as politicians plus bureaucrats?
Opinion about the disintegration of the Soviet Union is sharply divided.
Europeans overwhelmingly say it was a good thing: 79% in Germany, 76% in Britain and 74% in France feel that way.
But outside the developed West it is a different picture. Almost seven in 10 Egyptians say the end of the Soviet Union was a bad thing and views are sharply divided in India, Kenya, and Indonesia.
JJS: When business competes, it creates wealth for everyone. But problems arise when government gives them something for nothing.
- Misbehaving Contractors are Recovery Act Winners
The federal government has awarded about $17 billion in direct contracts under the various provisions of the American Recovery and Reinvestment Act (ARRA). The public will never know how the Federal Awardee Performance and Integrity Information System, or FAPIIS, is used to vet contractors. Congress caved in to pressure from the contractor community and prohibited public disclosure of the database.
Fortunately, the non-profit Project On Government Oversight (POGO) created the Federal Contractor Misconduct Database (FCMD). The FCMD, which covers the 100 largest federal contractors, documents more than 700 cases of misconduct since 1995 that resulted in more than $26 billion in fines and penalties.
An examination of the national Recovery Act contractor spreadsheet shows that many of those companies appear in POGO’s database as having been involved in cases of misconduct. They account for more than $6 billion in Recovery Act contract awards. There are 12 contractors with more than one instance of misconduct and ARRA contracts of at least $150 million.* Here they are (listed by volume of ARRA contracts):
CH2M ($1.8 billion in ARRA contracts; 6 instances of misconduct with penalties of $2.8 million)
URS ($737 million in contracts; 4 instances and $2.4 million in penalties)
Northrop Grumman ($596 million in contracts; 29 instances and $821 million in penalties)
Battelle Memorial Institute ($522 million in contracts; 7 instances and $1.3 million in penalties)
Honeywell International ($472 million in contracts; 31 instances and $641 million in penalties)
Fluor ($469 million in contracts; 23 instances and $198 million in penalties)
SAIC ($312 million in contracts; 10 instances and $14 million in penalties)
Bechtel ($270 million in contracts; 15 instances and $359 million in penalties)
University of California ($270 million in contracts; 25 instances and $67 million in penalties)
Lockheed Martin ($180 million in contracts; 50 instances and $577 million in penalties)
University of Chicago ($163 million in contracts; 4 instances and $22 million in penalties)
Jacobs Engineering ($161 million in contracts; 2 instances and $37 million in penalties)
When the nation’s largest contractors have track records such as these, it is not surprising that Congress chose to keep its misconduct database a secret.
* In the case of joint ventures, the amount of the contract award is divided equally among the companies or institutions involved.
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Jeffery J. Smith runs the Forum on Geonomics.
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