lily
03-11-2008, 10:56 PM
Ah....the good life in the land of milk and honey, where the no bid cotracts flow like milk and the money and kickbacks are as sweet as honey. (http://www.washingtonpost.com/wp-dyn/content/article/2008/03/11/AR2008031101739.html?hpid=moreheadlines)
Ashcroft Claims 'No Conflict' in $50M No-Bid Contract
By Dan Eggen
Washington Post Staff Writer
Tuesday, March 11, 2008; 3:04 PM
Former attorney general John D. Ashcroft today strenuously defended a
government-sanctioned contract that could earn his consulting firm more than
$50 million, saying there is no conflict of interest in the appointment made
by one of his former U.S. attorneys.
Ashcroft has come under scrutiny from Democratic lawmakers since he accepted
a no-bid contract to oversee the operations of an Indiana medical equipment
company which is accused of giving kickbacks to doctors. He was chosen by
U.S. Attorney Christopher Christie of New Jersey, a Republican who once
worked for Ashcroft.
"There is not a conflict," Ashcroft said. "There is not an appearance of
conflict."
Ashcroft's testimony to the House Judiciary Subcommittee on Commercial and
Administrative Law marked his first appearance before Congress since he left
his post as head of the Justice Department in late 2004, officials said.
In addition to defending his current work, Ashcroft used the occasion to
herald some of his accomplishments as attorney general, including generally
declining crime rates and aggressive anti-terrorism programs.
Ashcroft is now a lobbyist who runs his own Washington consulting firm, The
Ashcroft Group, which was awarded a contract last fall to oversee the
operations of Zimmer Holdings of Warsaw, Ind. Zimmer avoided criminal
prosecution for allegedly paying doctors to use its products, according to
the settlement.
The deal is expected to earn Ashcroft's firm between $28 million and $52
million over 18 months, according to financial filings.
The subcommittee's chairwoman, Rep. Linda Sanchez (D-Calif.), said today
that the deal "appeared to be a backroom, sweetheart deal," because Ashcroft
was chosen by Christie without competition.
Sanchez also said that, until this week, "the parties to these agreements
were operating in a Wild West environment with no laws and no Justice
Department guidelines."
The Justice Department on Monday imposed new restrictions on such monitoring
agreements, requiring U.S. attorneys to obtain approval from Justice
headquarters for such agreements and to form special committees to review
potential applicants for the assignments.
Ashcroft said that outside monitors, which have been used increasingly in
corporate fraud cases in recent years, save taxpayers money by avoiding
costly prosecutions and forcing companies to follow the law.
"This hearing cost far more in tax dollars than my monitorship will cost,
because it did not cost taxpayers one thin dime," Ashcroft testified. Under
the arrangements, the cost of the monitoring is borne by the company, which
agrees to pay to avoid criminal prosecution.
The practice has become more popular since the 2002 indictment of accounting
firm Arthur Andersen LLP, which folded after being convicted of obstructing
justice and put most of its employees out of work. Prosecutors view deferred
prosecutions, with monitor arrangements, as a way to avoid closing a company
altogether while ensuring compliance with the law.
Typically, U.S. attorneys defer the threat of prosecution as a way of
maintaining some leverage over the companies' future conduct. Such deferred
prosecutions have mostly been used for nonviolent juvenile and drug
offenders, rather than for large corporations suspected of criminal
wrongdoing.
Ashcroft Claims 'No Conflict' in $50M No-Bid Contract
By Dan Eggen
Washington Post Staff Writer
Tuesday, March 11, 2008; 3:04 PM
Former attorney general John D. Ashcroft today strenuously defended a
government-sanctioned contract that could earn his consulting firm more than
$50 million, saying there is no conflict of interest in the appointment made
by one of his former U.S. attorneys.
Ashcroft has come under scrutiny from Democratic lawmakers since he accepted
a no-bid contract to oversee the operations of an Indiana medical equipment
company which is accused of giving kickbacks to doctors. He was chosen by
U.S. Attorney Christopher Christie of New Jersey, a Republican who once
worked for Ashcroft.
"There is not a conflict," Ashcroft said. "There is not an appearance of
conflict."
Ashcroft's testimony to the House Judiciary Subcommittee on Commercial and
Administrative Law marked his first appearance before Congress since he left
his post as head of the Justice Department in late 2004, officials said.
In addition to defending his current work, Ashcroft used the occasion to
herald some of his accomplishments as attorney general, including generally
declining crime rates and aggressive anti-terrorism programs.
Ashcroft is now a lobbyist who runs his own Washington consulting firm, The
Ashcroft Group, which was awarded a contract last fall to oversee the
operations of Zimmer Holdings of Warsaw, Ind. Zimmer avoided criminal
prosecution for allegedly paying doctors to use its products, according to
the settlement.
The deal is expected to earn Ashcroft's firm between $28 million and $52
million over 18 months, according to financial filings.
The subcommittee's chairwoman, Rep. Linda Sanchez (D-Calif.), said today
that the deal "appeared to be a backroom, sweetheart deal," because Ashcroft
was chosen by Christie without competition.
Sanchez also said that, until this week, "the parties to these agreements
were operating in a Wild West environment with no laws and no Justice
Department guidelines."
The Justice Department on Monday imposed new restrictions on such monitoring
agreements, requiring U.S. attorneys to obtain approval from Justice
headquarters for such agreements and to form special committees to review
potential applicants for the assignments.
Ashcroft said that outside monitors, which have been used increasingly in
corporate fraud cases in recent years, save taxpayers money by avoiding
costly prosecutions and forcing companies to follow the law.
"This hearing cost far more in tax dollars than my monitorship will cost,
because it did not cost taxpayers one thin dime," Ashcroft testified. Under
the arrangements, the cost of the monitoring is borne by the company, which
agrees to pay to avoid criminal prosecution.
The practice has become more popular since the 2002 indictment of accounting
firm Arthur Andersen LLP, which folded after being convicted of obstructing
justice and put most of its employees out of work. Prosecutors view deferred
prosecutions, with monitor arrangements, as a way to avoid closing a company
altogether while ensuring compliance with the law.
Typically, U.S. attorneys defer the threat of prosecution as a way of
maintaining some leverage over the companies' future conduct. Such deferred
prosecutions have mostly been used for nonviolent juvenile and drug
offenders, rather than for large corporations suspected of criminal
wrongdoing.