Iraq contracts suit allowed to go ahead

The ruling by Judge TS Ellis was the first to decide how far the federal False Claims Act can be stretched to cover alleged theft in contracts on the battlefield, reports The Washington Post. The judge said, however, the Act would only cover alleged misused funds from American sources. Two former employees had sued Fairfax security firm Custer Battles LLC over the company\'s work on two contracts in Iraq. One contract was to provide security to Baghdad International Airport and another was for helping move new currency around the country. The workers claimed the company used shell companies in the Cayman Islands and elsewhere to submit phony bills to the US-led Coalition Provisional Authority. If the authority were an American agency, there would be little question that the whistle-blowers could pursue their suit under the Fair Claims Act, Ellis said. But because ‘the essential nature’ of the CPA is ‘shrouded with ambiguity’, he ruled, the case depended on the origins of the money at the heart of the allegations. Full report in The Washington Post