The great contracting scandal.

• Author: Peters, Charles
• Position: Government contracts

I

A little-known truth about Washington has become more evident through recent news about three seemingly unrelated subjects: Iraq, Katrina, and the nation's richest counties.

Let's start with the last first. America's three richest counties are all in Washington's suburbs. The Wall Street Journal offers a two-word explanation for this phenomenon: government contractors. They have become wealthy courtesy of the United States taxpayer, and these counties are where they live.

As for how they became wealthy, two words again go a long way towards telling the story: Iraq and Katrina. Enormous sums have been appropriated by Congress for reconstruction in Iraq and Louisiana and Mississippi. Yet one report after another has described how little evidence there is on the ground that this money has accomplished its mission. Where, then, is the money? You guessed it. A very considerable portion of it is lining the pockets of those contractors.

Clever contractors have learned to promise anything to get a government contract. They know that government contracting officers are under pressure from their top administrators and from the White House and Congress to at least create the appearance of action. This is exactly what signing a contract does.

The contracting officers are relatively easy marks. After all, they are paid an average of only $57,000 a year. But their bosses, the congressmen and the White House, are also too easy to satisfy, because they are so eager for the appearance of activity. And all too often reporters are gulled into thinking that appropriations and contracts are in themselves action and fail to follow up to see if what's supposed to get done actually gets done.

Contracting out also satisfies conservative ideologues who do not want to face the fact that adding functions to government may require additional employees. If the work is done under contract, the people who do it are employees of the contractors, not of the government. Thus the IRS is now hiring outside collection agencies to collect back taxes. This despite the fact that the IRS knows that adding employees of its own would do the job for considerably less--three cents a dollar collected, compared to 22 to 24 cents for the contractors--according to David Cay Johnston of The New York Times.

II

The Clinton administration went in for a bit of this sort of thing. Boasting as they did of downsizing the government, they were not averse to using contracts to hide additional...