NEW YORK MarketWatch — Swindlers, con men, and thieves could siphon off as much as $50 billion of the government’s planned stimulus package as the money begins flooding the economy in coming months, according to David Williams, who runs Deloitte Financial Services Advisory and counsels clients on fraud prevention.

Williams predicted that about $500 billion of the total $787 billion stimulus would be channeled into the traditional procurement network for government contracts, while the rest will be spent directly by the government or outside the corporate network.

“The rule of thumb typically is that of the about $500 billion worth of money that’s going to run through the procurement process, somewhere between 5% and 10% of that usually finds it way into potential problems,” Williams said. “That’s sort of the benchmark that I use.”

Companies will face increased pressure to try to stem the tide, and need to be prepared to safeguard data as well as the cash, according to Williams.

Williams said this week that the money flowing from the current stimulus package is particularly vulnerable to fraud because almost all movement of money is now done electronically.

“We’re telling our clients to be very careful and to make sure their firms are resilient in terms of dealing with the potential opportunities for fraud and waste,” Williams said.

That means keeping an eye out for the traditional scams such as billing for services not performed. But it also means firms must become even more diligent about electronic records and network security.

“It becomes ever more important that firms remain diligent about their data,” Williams said.

via Stimulus fraud could hit $50 billion – MarketWatch.

Fast Tube by Casper

Thomas Paine on our current circumstances and what should be done. Get involved in a tea party rally. Send your tea bags to congress

Written by Senator Tom Coburn
Tuesday, 10 February 2009

[Senator Coburn recently gave this speech on the floor of the Senate]

We are going in exactly the wrong direction. We ought to be standing on the principles that made this country great.

There ought to be a review of every program in the Federal Government that is not effective, that is not efficient, that is wasteful or fraudulent, and we ought to get rid of it right now. We ought to say, Gone, to be able to pay for a real stimulus plan that might, in fact, have some impact.

I would be remiss if I didn’t remind everybody that next week we are going to hear from the Obama administration wanting another $500 billion. Outside of this ["stimulus" bill], they are going to want another $500 billion to handle the banking system.

I want to make sure the American people know what is in this Stimulus bill. I think once they know what is in this bill, they are going to reject it out of hand. Let me read for my colleagues some of the things that are in this bill.

The biggest earmark in history is in this bill. There is $2 billion in this bill to build a coal plant with zero emissions. That would be great, maybe, if we had the technology, but the greatest brains in the world sitting at MIT say we don’t have the technology yet to do that.

Why would we build a $2 billion powerplant we don’t have the technology for that we know will come back and ask for another $2 billion and another $2 billion and another $2 billion when we could build a demonstration project that might cost $150 million or $200 million? There is nothing wrong with having coal-fired plants that don’t produce pollution; I am not against that. Even the Washington Post said the technology isn’t there. It is a boondoggle. Why would we do that?

We eliminated tonight a $246 million payback for the large movie studios in Hollywood.

We are going to spend $88 million to study whether we ought to buy a new ice breaker for the Coast Guard. You know what. The Coast Guard needs a new ice breaker. Why do we need to spend $88 million? They have two ice breakers now that they could retrofit and fix and come up with equivalent to what they needed to and not spend the $1 billion they are going to come back and ask for, for another ice breaker, so why would we spend $88 million doing that?

We are going to spend $448 million to build the Department of Homeland Security a new building. We have $1.3 trillion worth of empty buildings right now, and because it has been blocked in Congress we can’t sell them, we can’t raze them, we can’t do anything, but we are going to spend money on a new building here in Washington.

We are going to spend another $248 million for new furniture for that building; a quarter of a billion dollars for new furniture. What about the furniture the Department of Homeland Security has now? These are tough times. Should we be buying new furniture? How about using what we have? That is what a family would do. They would use what they have. They wouldn’t go out and spend $248 million on furniture.

How about buying $600 million worth of hybrid vehicles? Do you know what I would say? Right now times are tough; I would rather Americans have new cars than Federal employees have new cars. What is wrong with the cars we have? Dumping $600 million worth of used vehicles on the used vehicle market right now is one of the worst things we could do. Instead, we are going to spend $600 million buying new cars for Federal employees.

There is $400 million in here to prevent STDs. I have a lot of experience on that. I have delivered 4,000 babies. We don’t need to spend $400 million on STDs. What we need to do is properly educate about the infection rates and the effectiveness of methods of prevention. That doesn’t take a penny more. You can write that on one piece of paper and teach every kid in this country, but we don’t need to spend $400 million on it. It is not a priority.

How about $150 million for a Smithsonian museum? Tell me how that helps get us out of a recession. Tell me how that is a priority. Would the average American think that is a priority that we ought to be mortgaging our kids’ future to spend another $150 million at the Smithsonian?

How about $1 billion for the 2010 census? So everybody knows, the census is so poorly managed that the census in 2010 is going to cost twice what it cost 10 years ago, and we wasted $800 million on a contract because it was no-bid that didn’t perform. Nobody got fired, no competitive bidding, and we blew $800 million.

We have $75 million for smoking cessation activities, which probably is a great idea, but we just passed a bill, the SCHIP bill, that we need to get 21 million more Americans smoking to be able to pay for that bill. That doesn’t make sense.

How about $200 million for public computer centers at community colleges? I mean, did we talk with Dell and Hewlett-Packard and say, How do we make you all do better? Is there not a market force that could make that better? Will we actually buy on a true competitive bid?

No, because there is nothing that requires competitive bidding in anything in this bill. There is nothing that requires it. It is one of the things President Obama said he was going to mandate at the Federal Government, but there is no competitive bidding in this bill at all.

We have $10 million to inspect canals in urban areas. Well, that will put 10 or 15 people to work. Is that a priority for us right now?

There is $6 billion to turn Federal buildings into green buildings. That is a priority, versus somebody getting a job outside of Washington, a job that actually produces something, that actually increases wealth?

How about $500 million for State and local fire stations? Where do you find in the Constitution us paying for local fire stations within our realm of prerogatives? None of it is competitively bid.

Next is $1.2 billion for youth activities. Who does that employ? What does that mean?

How about $88 million for renovating the public health service building? You know, if we could sell half of the $1.3 trillion worth of properties we have, we could take care of every Federal building requirement and backlog we have.

Then there’s $412 million for CDC [Centers for disease Control] buildings and property. We spent billions on a new center and headquarters for CDC. Is that a priority? If we are going to spend $412 million on building buildings, let’s build one that will produce something, one that will give us something.

How about $850 million for that most “efficient” Amtrak that hasn’t made any money since 1976 and continues to have $2 billion or $3 billion a year in subsidies?

Here is one of my favorites: $75 million to construct a new “security training” facility for State Department security officers. We already have four other facilities already available to train them. But they want theirs. By the way, it is going to be in West Virginia. I wonder how that got there.

So we are going to build a new training facility that duplicates four others that we already have that could easily do what we need to do. But because we have a stimulus package, we are going to add in oink pork.

How about $200 million in funding for a lease – not buying, but a lease – of alternative energy vehicles on military installations?

We are going to bail out the States on Medicaid. Total all of the health programs in this, and we are going to transfer $150 billion out of the private sector and we are going to move it to the Federal Government. You talk about backdooring national health care.

Henry Waxman has to be smiling big today. He wants a single-payer Government-run health care system. We are going to move another $150 billion to the Federal Government from the private sector.

We are going to eliminate fees on loans from the Small Business Administration. You know what that does? That pushes productive capital to unproductive projects. It is exactly the wrong thing to do.

We are going to spend $524 million for information technology upgrades that the Appropriations Committee claims will create 388 jobs. If you do the math on that, that is $1.5 million a job. Don’t you love the efficiency of Washington thinking?

We are going to create $79 billion in additional money for the States, a “slush fund,” to bail out States and provide millions of dollars for education costs. How many of you think that will ever go away?

Once the State education programs get $79 billion over 2 years, do you think that will ever go away? The cry and hue of taking “our money” away, even though it was a stimulus and supposed to be limited, it will never go away. So we will continue putting that forward until our kids have grandkids of their own.

There is about $47 billion for a variety of energy programs that are primarily focused on renewable energy. I am fine with spending that. But we ought to get something for it. There ought to be metrics. There are no metrics. It is pie in the sky, saying we will throw some money at it.

Let me conclude by saying we are at a seminal moment in our country. We will either start living within the confines of realism and responsibility or we will blow it and we will create the downfall of the greatest nation that ever lived.

This bill is the start of that downfall. To abandon a market-oriented society and transfer it to a Soviet-style, government-centered, bureaucratic-run and mandated program, that is the thing that will put the stake in the heart of freedom in this country.

I hope the American people know what is in this bill. I am doing everything I can to make sure they know. But more important, I hope somebody is listening who will treat the “pneumonia” we are faced with today, which is the housing and mortgage markets. It doesn’t matter how much money we spend in this bill. It is doomed to failure unless we fix that problem first.

Failing that, we will go down in history as the Congress that undermined the future and vitality of this country. Let it not be so.

The market’s inability to rally signals that investors see no immediate end for the recession, which is already 14 months old and one of the most severe in decades. Investors also haven’t been impressed with two major economic initiatives from the Obama administration this week, an economic stimulus package and a mortgage relief plan.

“It is definitely, definitely a blow to psychology,” said Quincy Krosby, chief investment strategist at The Hartford, referring to the Dow’s finish. “There is more pessimism in the market as to when the economy is going to pick up steam.”

via Newsmax.com – Despite Stimulus, Bailouts, Dow Plunges Below Key Threshold.