Senator Pushes for Answers on $50 Million Army Contracting Scandal

FILE - In this Jan. 9, 2018, file photo, Senate Finance Committee member Sen. Claire McCaskill, D-Mo., asks a question during a Senate Finance Committee hearing on Capitol Hill in Washington. (AP Photo/Carolyn Kaster, File)
FILE - In this Jan. 9, 2018, file photo, Senate Finance Committee member Sen. Claire McCaskill, D-Mo., asks a question during a Senate Finance Committee hearing on Capitol Hill in Washington. (AP Photo/Carolyn Kaster, File)

A Democratic senator chastised U.S. Army leaders today while pushing for more information involving a British firm that allegedly used U.S. military contracting dollars to buy high performance cars and other luxuries at the cost of American taxpayers.

In August 2017, the Defense Contracting Auditing Agency completed an audit New Century Consulting, a military subcontractor.

"This audit we know includes questioned costs amounting to over $50 million, including Bentleys, Alfa Romeos, assistant salaries of $420,000," Sen. Claire McCaskill of Missouri said during an April 12 Senate Armed Services Committee hearing.

The contracting scandal deals with the "legacy program," an effort to build the intelligence capacity of Afghanistan and Iraq, said McCaskill, who has been involved with the oversight of the program since 2012.

"It is so discouraging to me, after all the work we have spent on contracting after the war contracting commission, after all the reforms we have done on contracting, that we have not yet figured out how to get at these abuses," she said.

Michael Grunberg, chief executive officer of New Century Consulting, said the company is being portrayed unfairly and that it strives to follow federal acquisition rules, according to an Aug. 9, 2017 report by the Associated Press.

McCaskill said she sent a letter to Defense Secretary James Mattis last August, demanding more information on the audit.

"We are being told we can't get the audit because the audit agency is worried that that, if they publicly disclose some to the audits, that that would discourage contractors in the future because there financial information would become public," McCaskill said.

McCaskill then asked Secretary of the Army Mark Esper and Chief of Staff of the Army Gen. Mark Milley if they were familiar with the issue and whether they were "actually strategizing" to fix the problem.

"Give me some good news about how you view this problem and please tell me that a senator 20 years from now is not going to be sitting here going how in the world are taxpayers paying for Alfa Romeos and Bentleys," McCaskill said.

Esper said he is familiar with the case and is working to resolve the issue.

"I will tell you in the four months I have been on the job, I have met with contracting command twice; as recently as three weeks ago I had a conversation with my senior acquisition executive. It is something that Gen. Milley and I recognize is a challenge," Esper said.

"We need to have clear metrics that hold leaders accountable."

Milley agreed that the case represents a serious problem in the contracting community.

"What you are describing is unacceptable," Milley said. "It smacks of corruption and criminal activity. It's unacceptable and the people have to be held accountable."

Matthew Cox can be reached at matthew.cox@military.com.

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