GAO: Fraud in Gov't Contracts for Disabled Vets

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Congressional investigators have uncovered serious fraud in another government program.

This one was designed to give contracts to small businesses run by disabled veterans. But investigators say at least $100 million went to companies that are not small businesses or even run by veterans.

"Fraud in this program means that honest veterans who own a small business lose out on projects to impostors who, in many cases, aren't small businesses or even veterans," said Rep. Nydia Velazquez, D-N.Y., chairwoman of the House Committee on Small Business, who requested the report.

"Given the sacrifices our veterans have made, we owe them a program that works and helps them compete for their fair share of government contracts," she said.

The Small Business Administration failed to check if the companies were eligible. And many of the companies were still being handed tens of millions of dollars even after they were found to be fraudulent.

"By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the veterans program," investigators wrote.

President Barack Obama will sign an executive order next week aimed at cracking down on government waste and fraud. Officials say part of that order will impose penalties on contractors, such as suspension, if they fail to report and return improper payments made by the government.

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