Where’d the Homeland Security Money go?

A special report in the Washington Times revealed a shocking amount of waste in the Post 9/11 gold-rush to find contractors for airport screeners and other positions.

Three years ago, Sunnye L. Sims lived in a two-bedroom apartment north of San Diego, paying $1,025 in monthly rent. Then she landed a dream job, with $5.4 million in pay for nine months of work. In 2002, her tiny company secured a no-bid subcontract to manage logistics on an urgent federal project to protect the nation’s airports in the wake of the Sept. 11, 2001, terrorist attacks. … With little experience, her tiny company was asked to help set up and run screener-assessment centers in a hurry at more than 150 hotels and other facilities. Her company eventually billed $24 million.

The company, Eclipse Events Inc., was among the most important of the 168 subcontractors hired by prime contractor NCS Pearson Inc. The cost of the overall contract rose in less than a year to $741 million from $104 million, and federal auditors concluded that $303 million of that spending was unsubstantiated.

The level of abuse here is staggering.

From TFA:

The auditors said $15 million in expenses submitted by Eclipse could not be substantiated. For example, auditors were able to find supporting documents for only $326,873 of the $5.8 million that Eclipse spent directly on accounting, administration, consulting, management and contract labor.

This woman paid herself US$ 5.4 million in compensation as “President/Owner” and gave herself a US$270,000 pension. Sim’s company, Eclipse events, was formed after it had acquired the contract and dissolved shortly after it finished.

There are other cases of abuse too. A federal audit revealed a trail of expense abuse:

• $526.95 for one phone call from the Hyatt Regency O’Hare in Chicago to Iowa City.
• $1,180 for 20 gallons of Starbucks Coffee — $3.69 a cup — at the Santa Clara Marriott in California.
• $1,540 to rent 14 extension cords at $5 each per day for three weeks at the Wyndham Peaks Resort and Golden Door Spa in Telluride, Colo.
• $8,100 for elevator operators at the Marriott Marquis in Manhattan.
• $20/hr temporary workers billed at $48/hr
• Subcontractors signing out $5,000 cash without supporting documents
• $377,273.75 in unsubstantiated long-distance phone calls
• $514,201 to rent tents that flooded in a rainstorm
• $4.4 million in “no show” fees for candidates who did not appear for tests
• $15 and $20 an hour security guards billed to the government at $30 and $40 an hour.

But it doesn’t stop there. The US-VISIT programme, a project to implement border security screening has had serious concerns raised about its ability to be effective due to its use of ageing technology. Documents and interviews with those familiar with the program reveal concerns that basic procedures to ensure that taxpayers get full value from government contractors are being neglected. Although US$1 billion has been spent or budgeted for US-VISIT, the project is fraught with problems, including a fingerprint system that isn’t compliant with the US Government’s biometric standard. It’s no wonder that less than 1 percent of foreign visitors are being fully screened.

From TFA:

US-VISIT director James L. Williams defended the program’s strategy, saying officials plan to phase in new technology over the next decade while taking steps in the next several years to maintain security with current technology. He said people should understand that US-VISIT is in its infancy.

Williams said he is relying heavily on Accenture because the government cannot undertake the complex technological assignment without the expertise of private industry. He said he is proud that the losing bidders have not challenged the award to Accenture and its subcontractors, known as the Smart Border Alliance.

“Accenture was clearly the best value,” Williams said.

This would be the same Accenture that used to be known as Anderson Consulting, part of Arthur Anderson of Enron fame. This would also be the same Accenture that in 1998 was contracted to provide a welfare system for Ohio by a man who after awarding the contract to Accenture, took a job at Accenture paying US$10,000/month. Earlier, a woman employed by Accenture to land state contracts for them started working for the Ohio welfare director’s office and was implicated in the subsequent investigation.

This is also the same Accenture that billed Nebraska US$24 million over the original estimate in a project that the state auditor called “the most wasteful I have ever heard of. Its like pouring money down a deep dark hole.”

This is the same Accenture that implemented the New York ‘Connections’ Child Monitoring System using IBM hardware. The system was nearly 3 years overdue, and cost the US taxpayer more than 3 times the original price tag, a staggering US$362 million up to early 1999. Accenture projected 5,448 billable days for the project, yet it grew to over 28,000.

But, I digress.

According to one article, reams of government reports, testimony and interviews have documented rising costs and specific flaws in some of the major systems underway, such as:

• The contract to hire airport passenger screeners grew to $741 million from $104 million in less than a year. The screeners are failing to detect weapons at roughly the same rate as shortly after the attacks.
• The contract for airport bomb-detection machines ballooned to at least $1.2 billion from $508 million over 18 months. The machines have been hampered by high false-alarm rates.
• Radiation-detection machines worth a total of a half-billion dollars deployed to screen trucks and cargo containers at ports and borders have trouble distinguishing between highly enriched uranium and common household products. The problem has prompted costly plans to replace the machines.

So where is all the money going? According to the Washington Times, the largest single contract is that of the Integrated Coast Guard Services (US$ 553.8 million). The US Coastguard and Transport Security Administration combined are responsible for 56% of DHS spending. Since 2001, annual spending on contracts managed by the DHS or predecessors more than doubled from US$2.5 billion to US$5.8 billion.

It is truly shocking to see all those taxpayer dollars go to waste. The question is, will the U.S. government wake up and pull the plug, or will the money keep on pouring down the hole?