Shocking Fraud In U.S. War Contracts

Chronicle (Levin), 6 August 1949, Page 5

Shocking Fraud In U.S. War Contracts

Received Fridav. 5.20 p.m. WASHINGTON, August 4. Mr. Lipdsav Warren, United Stqtes Comntro'ller-General, in a report to Congress today disclosed what he called shocking evidence of fraud, collusion and "brihery on the part of former Armv officers in the award of -wartime Government contracts. Mr. Warren said the General Accqunting Office had found 6.280.000 dollars " in imoroper payments "induced hv fraud" in connection •with the settleiment of Government contracts. He said these renresented only a samnling, and he hesitated to ^hess the entire extent of fraud and overpayments. Mr. Warren said his department had found cases where Government officers and employees subsequently were given jobs by contratcors in return for assistance in securing Government contracts. His department also discovered a scheme whereby 20 per cent of the contract prices was handed back to certain Government reoresentatives either directly or to their relatiyes or through dummy corporations. Other Government employees received sums from contractors ramring up to 7600 dolliars. Mr. Warren said his department discovered instances of deliberate intent by contractors to defraud the Government in settling war contracts. These contractors concealed falsified material f.acts in connection with their operations, their costs of doing business, and their expenditures. The Department discovered at least 472 cases involving fraud out of 9195 cases examined.