SAIC Scandals

Thomas Drake’s revelations about National Security Agency’s contracts with SAIC — the (mostly) defense contractor Science Applications International Corporation — read like a how-to on purging the public purse. But there is more in SAIC’s four-decade history.

This past March, New York City fined SAIC half a billion dollars for what a prosecutor described as “the single biggest fraud” against the city. SAIC had repeatedly delayed work on a project to produce a computerized payroll system. So the original $70 million contract swelled to $700 million. Shell companies, money laundering, and overseas accounts kept the project alive until the city investigated. SAIC paid the $500 million to avoid criminal charges and keep the door open for more defense work.

In 1995, SAIC settled out of court with the Air Force, paying a $2.4 million fine, for falsifying test results and producing non-functioning navigation devices. (It still earned $22 million from the contract.)

In 2004, Defense Department auditors challenged SAIC’s padding an extra $10 million onto a contract to develop media in Iraq — finding “widespread, unsubstantiated equipment purchases.”

In 2005, the FBI wrote off more than $100 million and walked away from a flawed IT system the agency claimed was outdated before SAIC completed it.

Such numbers aren’t even a blip compared to SAIC’s $11 billion yearly earnings from the defense establishment.

Given the blur between SAIC and defense agencies — former defense secretary Robert Gates has served on its board — who’s surprised?

Leave a Reply

Your email address will not be published. Required fields are marked *

We collect email addresses for the sole purpose of communicating more efficiently with our Washington Spectator readers and Public Concern Foundation supporters.  We will never sell or give your email address to any 3rd party.  We will always give you a chance to opt out of receiving future emails, but if you’d like to control what emails you get, just click here.

Not yet a subscriber?

Support independent journalism with a subscription to our easy access digital edition—just $6.00 for 1 year (12 issues).

Sign me up!

Send this to a friend