Call it the punchline to the tremendous fraud that occurred under the control of the Coalition Provisional Authority.
In March, a jury ordered a defense contractor to pay more than $10 million in damages and fines. Custer Battles was accused of inflating invoices through a string of shell companies in the Caymans, among other profiteering techniques.
The plaintiffs were two former Custer Battles employees who sued under a federal whistle-blower statute that allows them to sue on behalf of U.S. taxpayers; the Bush administration declined to help with the suit.
But despite the lack of any help from the government on behalf of which they were suing, the pair won.
On Friday, though, a judge overturned the decision because he said it hadn’t adequately been demonstrated that the CPA was an arm of the U.S. government. It was “principally controlled” and funded by billions in U.S. taxpayer money, yes, but “this degree of control did not rise to the level of exclusive control required to qualify as an instrumentality of the U.S. government,” the judge wrote in his opinion. Because “it was created through and governed by multinational consent,” U.S. taxpayers can’t get any of their money back from war profiteers.
So the unique structure of the CPA, which made it so vulnerable to fraud, is also what makes it impossible to sue. Brilliant.
That doesn’t mean, however, that criminal investigations of the fraud under CPA won’t proceed. Stuart W. Bowen, Jr., the Special Inspector General for Iraq Reconstruction, told Congress earlier this month that they have “82 open investigations into alleged fraud, corruption, bribery, kickbacks, and gratuities” under CPA. 25 of those cases are awaiting prosecution at the Department of Justice, he said.
