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Monday, March 09, 2009

Fraud: The 7% solution

So how much government fraud is typical? I've never seen a rule-of-thumb number before this one:

"Fraud typically gobbles up around 7% of all big contracts. Mr. Devaney punched in the numbers. "Wow, $55.1 billion," he recalled thinking. "That's a lot of money."

"A hard-nosed Interior Department inspector general who helped lock up the agency's No. 2 official along with the lobbyist Jack Abramoff, Mr. Devaney now has one of the most delicate jobs in Washington.

"As head of the administration's new Recovery Act Accountability and Transparency Board -- already dubbed the Rat Board -- he must ensure that the spending proceeds smoothly and relatively fraud-free. But any success he has in sniffing out malfeasance could be politically damaging to Mr. Obama, providing fodder for conservatives who say the package is ripe for abuse."

I'm not surprised at the number, but I wonder where it comes from.