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Analysis

Key Trends in POGO’s Revamped Contractor Misconduct Database

Energy companies BP and Exxon Mobil, pharmaceutical producers GlaxoSmithKline and Merck, and defense/aerospace titans Lockheed Martin and Boeing are tops in misbehavior among Uncle Sam’s leading sellers of goods and services. This and many other intriguing trends can be found in the Project On Government Oversight’s Federal Contractor Misconduct Database.

POGO’s redesigned and upgraded database now profiles 206 of the federal government’s largest contractors. Recent additions include multinational holding company Berkshire Hathaway; petrochemical giants Compañía Española de Petróleos, S-Oil, and Total; private spaceflight company SpaceX; and health insurer UnitedHealth Group.

The database contains nearly 2,500 resolved and pending misconduct instances dating back to 1995. Over these 20 years, the entities in POGO’s database have paid at least $92 billion in fines, settlements, and court judgments. We say “at least” because many instances were settled confidentially or were resolved among multiple wrongdoers without a clear breakdown of how much each paid.

A relative handful of contractors are responsible for the majority of the instances and penalties. BP alone accounts for more than 37 percent of the penalty total, most of which stems from government and private legal actions over the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico. Pharmaceutical manufacturers GlaxoSmithKline, Pfizer, Merck, and Schering-Plough (which merged with Merck in 2009) account for almost 27 percent of the total with a combined $24.6 billion in misconduct penalties in cases alleging unsafe drugs, financial irregularities, and illegal marketing practices.

Misconduct by fossil fuel and pharmaceutical contractors now outpaces that by military hardware contractors in terms of penalty amount and number of instances. Exxon Mobil leads all contractors in the database with 84 instances of misconduct, and BP, Glaxo, Chevron, and Royal Dutch Shell rank among the top 10. But defense manufacturers still rank high on the instance count. Lockheed Martin and Boeing have the second and fourth highest number of resolved misconduct instances with 79 and 63, respectively. General Electric ranks fifth with 59.

It should be noted that many contractors in the database have relatively “clean” misconduct histories. POGO has not found any instances of misconduct for 57 contractors. An additional 29 have only one instance. By contrast, the other 120 contractors—nearly 60 percent of the entities in our database—are recidivists.

Of the 17 different types of misconduct included in the database, labor and environmental violations are the most common, accounting for a combined 40 percent of the resolved instances. Violations relating to government contracts—fraud, cost/labor mischarging, poor performance, and defective pricing—account for 22 percent of the instances.

Another fascinating trend revealed by our data is the relative scarcity of criminal actions involving federal contractors. Less than 7 percent of the instances are criminal prosecutions. This is in line with the findings of government watchdog group Transactional Records Access Clearinghouse, which caused a stir last month when it reported that federal criminal prosecutions of corporations declined by nearly one-third over the past 10 years. Hopefully, this will change with the Justice Department’s new corporate crime-fighting policy.

Many of the contractors in POGO’s database have landed in the news recently for admitted or alleged misconduct:

These are among the thousands of instances in the database, most of which have downloadable source documents. In addition, with a single mouse click or finger tap, you can export misconduct data into a spreadsheet-ready file. We encourage you to dive into the data and take full advantage of the site’s features. You may be surprised by what you find.