Scams of Immense Proportions, Redux

In a recent article for the Washington Post, Lisa Rein has reported the following troubling details about the way in which VA hospitals have been purchasing prosthetics for veterans:

“Employees in the purchasing department of a VA hospital in the Bronx had used government purchase cards like credit cards at least 2,000 times to buy prosthetic legs and arms for veterans.

“Each time they swiped the cards, it was for $24,999. That was precisely one dollar below VA’s charging limit for purchase cards.

“When word reached Congress about the $54,435,743 worth of prosthetics bought under such odd circumstances over two years—the subject of an inspector general investigation announced Monday—lawmakers demanded details. But they were told there was no documentation.

“VA officials had prepared to tell Congress that the records had been destroyed by Hurricane Sandy, according to previously undisclosed records, until a senior adviser in the Secretary’s office pointed out that the timing was wrong [the hurricaine predated many of the purchases] and the excuse wouldn’t hold up. . . .

“The Bronx case tipped Frye off to a wider use of purchase cards he said run afoul of federal rules. During an 18-month period that ended last year, he documented that up to $1.2 billion in prosthetics were bought with cards and without contracts.”

So, on the surface, the issue is that federal employees were skirting the rules in order to avoid having to do the paperwork related to contracted purchases. This interpretation of the events will most likely be used to reinforce the popular derogatory stereotype of the public employee as lazy and irresponsible.

Another possible interpretation is that the cuts to the federal workforce have made employees cut corners in order to keep up with their workload. The federal workforce is at its lowest level since the Kennedy administration, and the results of understaffing have been apparent in other ways in the VA hospital system.

There will be some who will argue that since the federal employees are so lazy or incompetent that the public services that they are attempting to provide should be privatized. But, these prostheses were being purchased from private corporations, and those corporations apparently were willing to accept a standard payment of $24,999 for the prostheses that they supplied. Since it is strains credulity that any of the prosthesis just happened to be priced at $24,999—never mind that they were uniformly sold at that price—there seems to have been some obvious collusion between purchasers and the sellers. Regardless of whether any federal employee illegally profited from this arrangement, it is clear that the corporations involved were very willing to accept the arrangement.

By extension, and on the basis of manifold other evidence, one can argue not only that privatization reduces oversight while not substantially improving services but also that the reduction in oversight almost guarantees that there will be no improvement in services.

We have seen this in the ways in which the online for-profit colleges and universities have operated. Likewise, if you have been following Diane Ravitch’s blog, you know that the corporate charter schools in many states are under investigation for all sorts of abuses of public financing and of the public trust.


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