Monday, August 20, 2007

Pentagon paid $1 million to ship two 19 cent washers

HA! I'm back. We had a lot of stuff to do on Congresswoman Bachmann last week. But I'm back and have I got a story for YOU!:

Pentagon Paid $998,798 to Ship Two 19-Cent Washers
Tony Capaccio
Thu Aug 16, 3:16 PM ET

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina -- twin sisters -- exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled ``priority'' were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

(For sheer, unadulterated BALLS, I have to give this private sector contractor the prize.

C&D and two of its officials were barred in December from receiving federal contracts. Today, a federal judge in Columbia, South Carolina, accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.

Corley, 46, was fined $750,000. She faces a maximum prison sentence of 20 years on each count and will be sentenced soon, McDonald said in a telephone interview from Columbia. (The Pentagon investigator) said (Corley's) sibling died last year.

(My condolences.)

Corley didn't immediately return a phone message left on her answering machine at her office in Lexington...

(She's still counting her money. "Let the damn phone ring... eighteen million and one, eighteen million and two (hums "God Bless A-mericaaaa...")

`Got More Aggressive'

C&D's fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service's chief agent in Raleigh, North Carolina, said in an interview. ``As time went on they got more aggressive in the amounts they put in.''

(Wow! And it took 'em seven years to catch 'em. Why rob banks, when you can do this?)

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said

(Twenty million dollars for shipping? That's the first thing they tell you when you bid on Ebay, "you gotta watch those shipping charges, that's how the sellers get ya." How do they rationalize shipping charges like that? "Let's see...They want this humvee evergreen air-freshener shipped "Next Day Priority Air"...Okay, that'll run ya...oh, what the hell, it Christmas, let's call it $293,000..." Where are those guys who talk up the virtues of the private sector when you need 'em?)

``The majority, if not all of these parts, were going to high-priority, conflict areas -- that's why they got paid,'' Stroot said. If the item was earmarked ``priority,'' destined for the military in Iraq, Afghanistan or certain other locations, ``there was no oversight.''

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000.

(I'd have liked to have been a fly on the wall for that moment. "Hey, what's this--$998,798? For two little metal washers? That can't be right. Must be something special about 'em...")

That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

("Nope, that's's the exact same order from two weeks ago...and we paid it...hmmm...and it doesn't include the price of the washers themselves... which comes to (hits adding machine) thirty-eight cents, for both... Jeez, I only make thirty thou a year auditing these bills for the government...maybe I should get into this 'metal washer shipping' business thing, it must be some kind of frikkin' gold mine...")

...``C&D was a rogue contractor,'' (Pentagon investigator) Stroot said. While other questionable billing has been uncovered, nothing came close to C&D's, she said. The next-highest billing for questionable costs totaled $2 million, she said.

(That was for FedEx'ing that "Bush/Cheney" bumpersticker to Kabul.)

Stroot said the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and ``high- end automobiles'' that the sisters spent the money on.

``They took a lot of vacations,'' she said.

(Yeah, but in their defense--some of those parts are hard to get these days. I mean, $998,000 to ship two 19 cent metal washers to Texas--sure, that sounds like a lot, but the alternative is, you send some guy off the base to go out and get the part in town, and he's got carfare, you've got to buy him lunch, and then you get down to Ace Hardware and maybe they've got the washer and maybe they don't, the kid forgot to bring the cracked old washers with him and the old guy in the hardware store has to guess, kind of "eye-ball it..." And then if it's wrong, you got to send the kid back, two or three times. It's a royal pain in the ass.)



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