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Officials: Alleged fraud leads to probe of defense contracting system

  • Story Highlights
  • Army is expected to announce this week the formation of a high-level task force
  • Rising number of criminal investigations prompts move, officials say
  • Military sources say the cases involve $5 billion worth of contracts
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From Barbara Starr and Mike Mount
CNN Washington Bureau
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WASHINGTON (CNN) -- Amid a rising number of criminal investigations into alleged fraud and abuse by defense contractors in Iraq, Afghanistan and Kuwait, the Defense Department and Army are assembling teams to investigate whether the contracting system should be overhauled, senior Pentagon and military officials said Tuesday.

Secretary Robert Gates "is concerned about the number" of criminal investigations of contractors, a top aide says.

"The secretary is concerned about the number of cases," said a top aide to Defense Secretary Robert Gates.

Since the Iraq war began in March 2003, at least 73 criminal cases alleging contractor misconduct have been opened, including allegations of bribery and fraud, according to the Army.

The Army said it wasn't clear how many of the cases have been closed, but 20 people have been indicted.

The inquiry was first reported in Tuesday editions of the New York Times.

Military sources say the cases involve $5 billion worth of contracts and allegations of up to $15 million in possible bribes.

The deals being investigated involve everything from supplying food, water and vehicles to weapons contracts. Military sources say there are no indications that U.S.-supplied weapons have gotten into the hands of insurgents, although they cannot rule out isolated instances.

Though some cases may be connected, officials said they do not see a broad conspiracy.

The number of cases and the continuing allegations of misconduct are the major concern, they said.

Gates is expected to send the Defense Department's inspector general, Claude Kicklighter, to Iraq to look into the problems.

And CNN has learned the Army is expected to announce this week the formation of a high-level task force of Army experts to look into the cases and determine whether the contracting system needs to be changed.

"DOD is concerned with the number of contracting improprieties that they have discovered," Pentagon spokesman Bryan Whitman said in a written statement.

"The [inspector general] will go to Iraq to look at contracting procedures overall and to look at what might be done to prevent in the future some of these things that various individual independent agencies have discovered and found which have identified shortcomings in the performance of some of our people and contractors out there."

The Army's Criminal Investigation Command, the Justice Department and the FBI are involved in the criminal investigations.

In addition, the Gates aide said U.S. government reports indicate thousands of U.S.-supplied weapons for Iraqi security forces are unaccounted for. E-mail to a friend E-mail to a friend

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