Procuring Protection: Using the False Claims Act to Combat Human Trafficking by Government Contractors

Transcription

1 Procuring Protection: Using the False Claims Act to Combat Human Trafficking by Government Contractors By Caitlin Grimmer Traffickers are criminals. Governments which alone have the power to punish criminals and provide legal recourse to survivors cannot waver in their efforts to confront modern slavery. 1 The U.S. Department of State In Greek mythology, Eurystheus ordered Heracles to perform twelve impossible labors in order to atone for his prior crimes. 2 His second labor was to slay the Hydra of Lerna. 3 This beast, which boasted anywhere between nine and one hundred heads, would only die if her immortal head was cut off; all other heads would simply double. 4 The task, impossible by Heracles himself, required the assistance of Iolaus to cauterize each wound until the warrior could find the immortal limb and kill the creature. 5 Like Heracles, the U.S. Government cannot, on its own, eliminate human trafficking from government contracting; it must rely upon a modern-day Iolaus: qui tam relators. The Hydra: Human Trafficking Perpetrated by Government Contractors A group of female hairstylists in Fiji has been given the opportunity of a lifetime: in exchange for submitting their resumes, passports, and a commission for a local recruitment firm in the form of a recruitment fee, they will be taken to Dubai to work in a luxury hotel earning almost five times their current rate in their home country. 6 The women board the plane en route to the United Arab Emirates, but do not know that a transfer on the tarmac is in store for them. 7 Unbeknownst to these women, they will be taking a flight to Iraq or Afghanistan to join the ranks of U.S. contractors foreign workers, known as third-country nationals (TCNs). 8 Elsewhere in the warzone, workers from South Asia organize a protest against the substandard living conditions in Baghdad. 9 Specifically, TCNs protest the fact that a catering subcontractor, hired by prime contractor KBR, housed approximately 1000 workers in windowless warehouses for the past three months. 10 For these 1000 men, there were only twelve toilets, little food, and no pay. 11 But despite these apparent violations of U.S. law and human rights, the Government continued to award both KBR and the subcontractor new contracts. 12 The story, recounted from thousands of victimized TCNs, is always the same. In a distant village, young men read an advertisement and are enticed to work in foreign countries for between $1000 and $3000 per month. 13 They instead arrive in Iraq or Afghanistan to find they will be working for $150 to $500 per month after paying recruiters for the opportunity with loans that have interest rates of approximately thirty to fifty percent. 14 Young women, attracted to About the Author CAITLIN GRIMMER is a J.D. candidate at The George Washington University Law School for 2014 and the Senior Articles Editor of the Public Contract Law Journal. The author would like to thank her mother, Teri Grimmer, and sister, Dr. Elsbeth Grimmer, DVM, for their unending love and support. The author would also like to thank Prof. Mark Nackman and Abby Cohen for their multitude of helpful comments and edits. This Note is dedicated, in loving memory, to Gwyneth Grimmer. This article was previously published in the Public Contract Law Journal (Fall 2013). Journal of Contract Management / Summer

2 the possibility of working in Dubai or other wealthy nations as makeup artists or hairdressers, arrive in war-torn zones and face sex trafficking, sexual assault, or slave labor, while unable to return home because the subcontractor has seized their passports and visas. 15 Such stories seem like unconscionable tales of fiction, yet the Commission on Wartime Contracting in Iraq and Afghanistan (the Commission) found that a prime contractor, SABRE International, paid Ugandan guards only about $700 per month but charged the U.S. Government $1700 per month per guard. 16 The Commission documented that contractors would withhold pay to TCNs until contract completion in order to prevent the workers from quitting and returning home. 17 On May 1, 2010, TCNs working on a military base in Baghdad rioted, protesting the lack of food, inadequate living conditions, and missing wages. 18 Their stories, like countless untold experiences of men and women around the globe, carry a common thread: those seeking to provide for their families through better opportunities than those available in their impoverished home countries are cruelly deceived into working on military bases in the Middle East. 19 Promises from recruiters, who tell prospects of lucrative job opportunities in distant lands, target workers from poor countries such as Nepal, India, the Philippines, and Uganda in order to maintain a steady supply for the U.S. military s invisible army to provide base services such as construction, security, and food services. 20 Assigning blame solely to contractors, however, is difficult and imprudent when a problem like human trafficking spans the globe and remains un-checked by a multitude of governments and international organizations. 21 Instead, resolving this issue requires cooperation from the contractors, subcontractors, and the U.S. Government to implement a system that can effectively monitor and prevent human trafficking. 22 As with the battle against the hydra, 23 the Government cannot combat the issue alone and will require full compliance by both prime contractors and subcontractors. For the Government to combat human trafficking effectively, though, it must find the immortal head while cauterizing offshoots. Therefore, in order for the Government to enforce its zero-tolerance policy for human trafficking, it must make a serious effort to enforce its regulations, hold contractors accountable for their violations, and ultimately utilize the labors of a modern-day Iolaus. This Note will analyze the new regulations for enforcing the Government s zero tolerance policy regarding human trafficking. 24 First, this Note will define human trafficking and its history within government procurement. Second, this Note will discuss Executive Order 13627, the current laws regarding human trafficking and procurement, and the Executive Order s requirement to update the Federal Acquisition Regulation (FAR). 25 Third, this Note will analyze the Government s past enforcement of the zero tolerance policy and project its level of success if substantial change is not taken. Finally, this Note will make recommendations to improve enforcement against both prime contractors and subcontractors by advocating a change in the False Claims Act to permit whistleblowers to raise qui tam suits. Counting the Many Heads: Defining the World of Human Trafficking According to the State Department s annual Trafficking in Persons Report, approximately twenty-seven million people are currently victims of human trafficking. 26 Consequently, the Trafficking Victims Protection Act (TVPA) finds that [a] t least 700,000 persons annually, primarily women and children, are trafficked within or across international borders [and a]pproximately 50,000 are trafficked into the United States each year. 27 Importantly, human trafficking is not limited solely to sex trafficking and the sex industry. 28 The crime also includes forced labor and involves significant violations of labor, public health, and human rights standards worldwide. 29 The TVPA, however, limits the definition of human trafficking only to severe forms, which consist of: 1. Sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained [eighteen] years of age; or 2. The recruitment, harboring, transportation, provision, or obtaining of person for labor or services, through the use of force, fraud, or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage or slavery. 30 Although there are varying domestic and international definitions of human trafficking, [n]either the U.S. nor the [United Nations (U.N.)] definition of the term requires trafficking victims to be physically moved across international borders. 31 The TVPA does not define forced labor 32 but does define involuntary servitude as any scheme intended to cause a person to believe that, if the person did not enter into or 60 Summer 2014 / Journal of Contract Management

3 continue that person or another would suffer serious harm or the abuse or threatened abuse of the legal process. 33 FAR defines forced labor as: [K]nowingly providing or obtaining the labor or services of a person 1. By threats of serious harm to, or physical restraint against, that person or another person; 2. By means of any scheme, plan, or pattern intended to cause the person to believe that, if the person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint; or 3. By means of the abuse or threatened abuse of law or the legal process. 34 Approximately 600,000 to 800,000 trafficked individuals are annually exploited through forced labor and commercial sex exploitation. 35 TCNs are defined as foreign workers hired by a government contractor or subcontractor in support of U.S. military or diplomatic missions [primarily] in Iraq and Afghanistan. 36 Indeed, according to the Commission on Wartime Contracting in Iraq and Afghanistan: The number of contractor employees supporting Defense, State, and USAID operations in Iraq and Afghanistan exceeded 260,000 in 2010-a number larger than the U.S. military and federal-civilian workforce in theater. More than [eighty] percent of the contractor employees were local or third-country nationals, not U.S. citizens. 37 Due to globalization, the problem of human trafficking has grown into a many-headed hydra where contingency contractors, labor brokers, and criminal organizations extort the multitude of people willing to work. 38 Along with substandard living conditions, exploitation, and the presence of unauthorized workers, the Commission also found that TCNs were lured with promises of work in Kuwait at good wages, and upon arrival were routed to Afghanistan and paid wages lower than promised. 39 The Commission noted that in areas such as Iraq and Afghanistan, subcontractors come from cultures where bribes and kickbacks are common, and the United States lacks jurisdiction or leverage over foreign subcontractor[s]. 40 Prime contractors, often unknowingly, violated the regulations and did not use all their capacities to supervise their labor brokers or subcontractors. 41 Overall, the Commission found that current laws, regulations, and prohibitions have been unsuccessful in thwarting human trafficking. 42 The primary failure to prevent human trafficking stems from enforcement and oversight issues. 43 Because there is a lack of guidance on how to monitor subcontractors for human trafficking, often prime contractors correctly supervise neither subcontractors nor the labor brokers in charge of TCN employment. 44 Due to this lack of oversight, the Government and American taxpayers end up indirectly funding these human rights violations. 45 Regulations requiring that the contractor act only once it becomes aware 46 of a violation motivates the prime contractor to turn a blind eye and utilize subcontracting in order to limit liability. 47 Arguably, federal regulations create a reverse incentive to avoid awareness of the violations and instead discourage active investigation. 48 The Commission estimates that, in general, [a]t least $31 billion, and possibly as much as $60 billion has been lost to contract waste and fraud in Iraq and Afghanistan. 49 The American Civil Liberties Union (ACLU) explains that a percentage of this general waste and fraud will be pocketed by the subcontractor and recruiters rather than paid to the TCNs. 50 In addition to their lost wages and inadequate pay, TCNs face other issues, including substandard living and working conditions; exposure to sexual assault, death, and grave injuries; and possible desertion in Afghanistan or Iraq upon contract termination. 51 The Warriors that Perished Before: How Prior Legislation Was Ineffective and Why History Repeats Itself with Executive Order The Promise of Change and Enforcement: Executive Order As the largest single purchaser of goods and services in the world, the United States Government bears a responsibility to ensure that taxpayer dollars do not contribute to trafficking in persons. 52 -President Barack Obama On September 25, 2012, President Obama issued Executive Order (EO) in order to strengthen protections against trafficking in persons in federal contracting. 53 Emphasizing the Government s zero-tolerance policy and the burden of preventing the expenditure of tax dollars on human trafficking, the Administration called for three major changes: (1) re-establishing the zero-tolerance policy and providing additional tools, training, and clarity to contractors to comply with regulations; (2) anti-trafficking provisions that would be added to the FAR within 180 days from the promulgation of the Executive Order; and, (3) guidance and training to be promulgated for agencies in order to enforce said regulations. 54 Journal of Contract Management / Summer

4 Pursuant to the EO, the FAR Council was given 180 days to amend the FAR to prohibit contractors and subcontractors from engaging in practices such as: (1) fraudulent recruiting, including withholding information on the true nature of the position or other aspects of the job such as, inter alia: wages, benefits, location, and job hazards; (2) charging recruitment fees; (3) withholding identification documents; and (4) failing to pay for the return transportation costs for a TCN performing work outside of the United States. 55 Additionally, contractors with work outside the United States exceeding $500,000 must now also maintain a compliance plan and an awareness program (on the contractor or subcontractor s website, no less) that informs employees about: (1) a policy to prevent human trafficking by employees; (2) consequences for employees that engage in trafficking; (3) an employee reporting process for trafficking activity that prohibits retaliation; (4) recruitment and wage plans; (5) a housing plan that meets the host country s housing and safety standards; and (6) procedures to prevent subcontractors from trafficking. 56 Finally, each contractor and subcontractor must certify, both before the award of a contract and each year during performance, that it has a compliance plan to prevent trafficking-related activities, and either to the best of its knowledge and belief, neither it nor any of its subcontractors has engaged in any such activities; or, if abuses have been found, the contractor or subcontractor has taken the appropriate remedial and referral actions. 57 The EO also promised that the FAR would include a provision requiring contractors and subcontractors to cooperate fully in providing reasonable access [for agencies] to conduct audits. 58 Under that provision, contractors would be required to notify the agency s Inspector General if they become aware of human trafficking activities and maintain a compliance plan. 59 Finally, the EO directed the administrator for Federal Procurement Policy to create guidance and training on the applicable law and requirements for prohibiting human trafficking and tracking reported cases. 60 The Historical Development of Overlapping, Ineffective Laws and the FAR The primary laws Congress enacted to prohibit and address human trafficking include the Trafficking Victims Protection Act of 2000 (TVPA) and the TVPA reauthorizations. 61 The TVPA is the main statute both prohibiting human trafficking for federal contractors abroad and allowing the Government to have a jurisdictional hook to apply anti-trafficking regulations against government contractors acting outside the United States. 62 The Government can also prosecute contractors under military law pursuant to the Military Extraterritorial Jurisdiction Act of 2000 (MEJA). 63 However, pursuant to a 2004 amendment, MEJA only applies to contractors working in conjunction with DoD missions. 64 If the contractor is working in support of another agency, then MEJA will not apply. 65 The last major resource left to protect victims from human trafficking perpetrated by government contractors is the FAR. FAR (a) prohibits prime contractors and subcontractors, during the period of contract performance, from [e]ngaging in severe forms of trafficking [p]rocuring commercial sex acts [and] [u]sing forced labor. 66 The regulation also requires that prime contractors and subcontractors notify the violating employees and take action against them. 67 However, if there is an awareness program in place at the time of the violation, the Contracting Officer may consider it as a mitigating factor when pursuing any of the remedies pursuant to FAR (e). 68 Under FAR , it is up to the contractor to notify the Contracting Officer of any violations. 69 Such remedies the Contracting Officer may pursue include: (1) removal of the violating employee; (2) [r]equiring the Contractor to terminate a subcontract; (3) [s]uspension of contract payments; (4) [l]oss of award fee ; (5) [t]ermination of the contract for default or cause or (6) [s]uspension or debarment. 70 On March 7, 2013, the Trafficking Victims Protection Reauthorization Act (TVPRA) for 2013 was signed into law as an amendment to the Violence Against Women Reauthorization Act of Additionally, on January 2, 2013, President Obama signed the National Defense Authorization Act for Fiscal Year 2013 (NDAA). 72 Within the NDAA, Title XVII (sections 1701 to 1708) pertains to Ending Trafficking in Government Contracting. 73 However, it primarily provides for similar requirements found in the Executive Order. 74 The Act merely requires that contractors conduct due diligence and certify that: (1) they will implement a compliance plan to prevent or detect trafficking, (2) they will implement procedures to prevent, monitor, detect, and terminate a subcontractor subgrantee, or employee of the recipient, or (3) to the best of the representative s knowledge, neither the contractor, subcontractor, subgrantee, nor recipient engages in trafficking Summer 2014 / Journal of Contract Management

5 Trying to Slay the Beast: Putting the Law into Action and Why Past Enforcement of the Current Laws have Failed The main issue plaguing the U.S. Government in preventing and prohibiting human trafficking is, predominately, the Government itself. 76 In fact, despite the Government s claim of a zero-tolerance policy, these cases are rarely prosecuted. 77 Accordingly, under MEJA, there have only been twenty-seven prosecutions, fifteen of which were against civilian contractors and only for sexually based crimes such as assault or possession of child pornography. 78 In fact, in 2010 there were fifteen cases brought under MEJA against Third Country/Foreign National Contractors. 79 Of those fifteen, five were not referred to the U.S. Attorney s Office, two were pending, and eight had been declined by the U.S. Attorney s Office for prosecution. 80 In totality, the DoD has made little, if no, use of MEJA. 81 Furthermore, MEJA does not mandate enforcement by the actual contractor; instead, the DoD Inspector General (DoD-IG) is exclusively responsible for informing the Attorney General whenever he or she reasonably suspects a violation. 82 Moreover, the FAR fails to remedy the injury caused by the violating employee or subcontractor. 83 If the Contracting Officer determines that there has been a violation of the human trafficking regulations, termination of the employee or subcontractor may be all that is necessary to satisfy the FAR s requirements. 84 There is concern that once such a subcontractor is terminated, they can simply leave without providing the injured TCN a return ticket home from the base. 85 The FAR s vocabulary is currently both too narrow (in that it limits victims remedies) and overbroad (in that it fails to include major violations) when addressing human trafficking. 86 For example, the FAR stipulates that the contractor may be able to remedy the violation by terminating the violating employee; however, the FAR does not include a prevention clause for the rehiring of the violating employee. 87 Furthermore, the FAR incentivizes the contractor to relax vigilance in checking for human trafficking violations, as the contractor will not have to take action unless the contractor itself becomes aware of a violation. 88 As the Commission on Wartime Contracting noted: Some prime contractors, although not themselves knowingly violating the prohibitions on trafficking, have not proactively used all their capacities to supervise their labor brokers or subcontractors. For such prime contractors, agencies and have not effectively applied positive and negative incentives in the contracts they award. 89 There are two proposed federal rules looming on the horizon for federal contractors: (1) a general FAR provision prohibiting human trafficking and (2) a human trafficking provision aimed specifically at DoD contractors. 90 Depending upon the promulgated final rules, federal contractors may be required to follow substantially new procedures in order to warn employees of the dangers of human trafficking or ferret out the problem. 91 Ultimately, the U.S. Government has not prosecuted any contractors for trafficking, forced labor, or any other labor abuse under MEJA or TVPA. 92 The TVPA, after its 2008 reauthorization, permitted the Offices of Inspector General for DoD, [Department of State], and [the United States Agency for International Development (USAID)] to regularly investigate contracts for evidence of human trafficking and forced labor. 93 However, the Government still does not aggressively investigate or prosecute cases of human trafficking by government contractors. 94 Compounding the problem, the Government is left with a system where: (1) federal agencies weakly investigate and refuse to prosecute; 95 (2) the contractor must self-report under the FAR; 96 (3) remedies do not assist the TCN, 97 who is, after all, the actual victim; and (4) there is no overall enforcement, consequences for violations, or any incentive to not traffic TCNs (because ultimately it is relatively cheaper to continue violating trafficking laws). 98 Relying on Iolaus to Kill the Hydra: Using the False Claims Act (FCA) Using FCA to Combat Human Trafficking The Commission on Wartime Contracting recognized that, in general, lack of enforcement leads to continued fraud in contracting. 99 Specifically, it noted: The sheer number of contracts for Iraq and Afghanistan points to a high potential for fraud. However, of the 332 cases that the task force reported as being closed, the Department of Justice told the Commission that it charged only 150 individuals and companies. Few cases of wartime-contracting fraud are actually prosecuted. Many of the cases are closed for a variety of reasons including a lack of evidence, the difficulty of investigating them, and the cost of prosecution. 100 Indeed, during the Committee on Oversight and Government Reform s hearing on whether contractors were exploiting workers, when asked if the correct policies and procedures were in place, Sam W. McCahon, a specialist in Journal of Contract Management / Summer

6 the field of human trafficking related to government contracts and founder of McCahon Law Office, LLC, replied: I do believe we have the right regulations in place. The problem is transparency and reporting. There are not enough agents on the ground to report this conduct. It has to be the responsibility of the prime contractor. But now the prime contractor has no incentive and all the disincentive in the world to report the conduct. It makes the prime contractor look bad if they do report it, and they get no incentive for engaging in reporting. 101 Given the invisibility of human trafficking to the Department of Justice, reason dictates that investigation and evidence collection should come from those already witnessing such events. If the problems are the lack of enforcement and oversight by the Government, then why does the Government not rely on those that are on the ground and witnessing such events? Ideally, if the cost of prosecution is a factor in not following through on reported violations, the Government would benefit by permitting qui tam suits. 102 This Note proposes that if the FAR was modified to require contractors to certify that they would not and will not support or conduct human trafficking (either primarily themselves or through their subcontractors), such a modification would create both an implied and an express certification under the FCA as a condition of payment. 103 Rather than submitting a compliance plan 104 for the agency to never read or investigate, a whistleblower should be able to prove his or her case in court in order to hold a contractor liable under the FCA for trafficking humans and fraudulently overcharging the Government for, inter alia, wages it never paid or food it never provided. 105 Currently, EO calls for a FAR update to include a requirement for a compliance plan (to be provided to the Contracting Officer if requested), an awareness program to teach employees not to traffic in persons, and a process for employees to report infractions without fear of retaliation. 106 As seen before, the Government s failure to prosecute and follow through on grave violations when such requirements were not necessary seems to foreshadow a similar passivity in monitoring and pursuing claims when the only requirements will be a compliance program, training, and a formal process for employees to lodge their complaints. 107 Federal contractors would be more on guard and incentivized to patrol, investigate, and prevent human trafficking (by both their employees and their subcontractors) if the threat of a lawsuit could come from its own employees. The False Claims Act provides for the civil prosecution of contractors who make false claims to the Government. 108 Section 3730(b)(1) of Title 31 U.S.C. permits a qui tam suit where a private individual, in place of the Government, brings suit for violations of the FCA. 109 Thus, the first step to create a potential FCA claim would be a new clause in the FAR requiring contractors to provide certification to the Government that they: (1) will not, either themselves or their subcontractors, participate in any behavior related to human trafficking, or (2) will take immediate and swift action to address any reports they receive of trafficking activity, and (3) will issue a report to the inspector general of the agency they are contracted with. 110 If, however, the contractor either: (1) submits certification and a whistleblower has substantial evidence that the contractor was participating in human trafficking, (2) takes no action on trafficking they were aware of, or (3) fails to notify the Government of the issue; then said whistleblower or relator would have the beginning of a qui tam claim under the FCA. 111 The Commission on Wartime Contracting noted that the practices related to human trafficking permit the possibility of fraud to exist because trafficking activity often goes unreported and remains secret. 112 Furthermore, the ACLU demonstrated that when human trafficking is involved and subcontractors pocket extra money in lieu of providing the necessary wages and living conditions for TCNs, then the prime contractor has implicitly and knowingly created a false claim to the Government, even if the prime contractor is unaware. 113 That claim, pursuant to the FCA, is a request for money or property from the U.S. Government. 114 Moreover, the request can be made in two ways: (1) directly to the Government or (2) via a third party that is working as a subcontractor of the primary contractor. 115 To knowingly submit a false record to the Government, the contractor can: (i) [have] actual knowledge of the information; (ii) [act] in deliberate ignorance of the truth or falsity of the information; or (iii) [act] in reckless disregard of the truth or falsity of the information. 116 Under this framework, the contractor would be legally obligated to follow through on a complaint concerning human trafficking, otherwise the contractor would be vulnerable to a qui tam suit by a whistleblower. 117 For example, the contractor could become subject to the FCA in two main ways. 118 First, on a cost reimbursable contract, if the contractor either submitted or permitted a subcontractor to submit a record that the contractor knew contained claims for salaries not being paid to the TCNs, then the contractor would have 64 Summer 2014 / Journal of Contract Management

7 submitted a false claim to the Government. 119 Second, if an employee submitted a human trafficking complaint to the contractor, the contractor refused to investigate the issue, and there was sufficient evidence to bring to court via a qui tam suit, then the contractor would be liable under FCA for deliberately ignoring the truth or falsity of the claim before submitting it to the Government for payment. 120 Additionally, the contractor would be incentivized to respond to complaints concerning human trafficking because the FCA permits higher liabilities as well as treble damages. 121 Considering that enforcement has been the largest issue plaguing the Government in its zero-tolerance policy, 122 the FCA can help empower victims to enforce the policy on behalf of the Government. 123 For example, the Government could pursue litigation against contractors engaging in human trafficking, a relator could bring an action, or the relator could begin the process and permit the Federal Government to intervene if it deemed there was sufficient evidence to the claim. 124 Overall, the contractor would be incentivized to prohibit human trafficking because there would finally be enforcement on the ground its own employees. 125 Finally, the prime contractor could utilize flow-down contract clauses whereby the subcontractor becomes liable for violating U.S. requirements to refrain from human trafficking. 126 Under a flow-down system, the certification required by the prime contractor to the Government would also be required by the subcontractor, therefore making the subcontractor liable for a lawsuit by the prime contractor should a qui tam relator sue the prime for a violation. 127 Counter-arguments against using the FCA On February 12, 2013, the FAR Council issued its notice that it was requesting comments regarding EO The ACLU s report on human trafficking presented a plan requiring: (1) prevention; (2) monitoring and investigation; and (3) prosecution or punishment for violations. 129 In order to enforce and prevent human trafficking violations, the report recommended that the U.S. Government enforce ten requirements: 1. Prohibit human trafficking regulations without exception. 2. Hold prime contractors responsible for the subcontractor s or its own violations of TCNs rights. 3. Have prime contractors directly hire TCNs. 4. Have passport access for TCNs. 5. Prohibit exploitative contracts by giving the TCN the contract prior to leaving his or her home country. 6. Require compliance with labor laws for fair pay and vacation and sick time. 7. Have safe living and working conditions. 8. Require medical care and insurance under the Defense Base Act. 9. Permit contact with the TCNs families at home. 10. Require the TCN s return home without deduction from the TCN s wages. 130 While many of these recommendations would assist in the battle against human trafficking, the problem still remains that there are not enough agents on the ground to report this conduct. 131 Because of the lack of jurisdiction in prosecuting foreign subcontractors, 132 the Government has been slow to respond in punishing contractors or subcontractors for violating anti-trafficking regulations. 133 For the United States to have a true zero-tolerance policy, the Government must enforce and prosecute those involved. That is why the most effective solution to resolving this global problem is to allow qui tam suits against offending contractors. Cauterizing the Wound: Conclusion The U.S. Government has been cutting away at the manyheaded hydra, but is failing to cauterize the wounds and thus is allowing more heads to sprout. High levels of fraud and waste have been noted countless times by multiple commissions and committees. 134 Countless administrations have promised reform and a crackdown on preventing human trafficking. 135 But each time change has arrived, whether by enforcement or legislation, it has had no effect on contractors because the threat of a sanction carried little to no weight. 136 In conclusion, updating the FAR to require certification by contractors and thus enlisting the FCA in the fight against human trafficking by government contractors can help resolve the lack of enforceability and reduce the waste and fraud plaguing areas of war-zone contracting. Additionally, allowing whistleblowers to bring qui tam suits will incentivize Journal of Contract Management / Summer

8 contractors to actively investigate claims and root out human trafficking caused by either their employees or subcontractors. Thus, the Government can begin to resolve the issues of fraud, TCNs can safely contract and provide necessary services for U.S. soldiers abroad, and the Government can begin to stand firmly on two feet and not waver in [its] efforts to confront modern slavery. 137 JCM ENDNOTES 1. Office to Monitor & Combat Trafficking in Persons, U.S. Dep t of State, Trafficking in Persons Report 8 (2012) [hereinafter 2012 Trafficking in Persons Report]; see also Office to Monitor & Combat Trafficking in Persons, U.S. Dep t of State, Trafficking in Persons Report 10 (2013) [hereinafter 2013 Trafficking in Persons Report] ( To prevent such lapses, government efforts to identify victims must go well beyond laws guaranteeing certain mechanisms, rights, or status. Governments need to seek to implement proactive systematic identification strategies designed to fit the wide range of settings and circumstances in which victims have been or might be found. ). 2. Robert Graves, The Greek Myths 101 (1957) (vol. 2). 3. Id. at Id. at Id. 6. Sarah Stillman, The Invisible Army, The New Yorker, June 6, 2011, at See id. at Id. at David Isenberg & Nick Schwellenbach, Documents Reveal Details of Alleged Labor Trafficking by KBR Subcontractor: The Najlaa Episode Revisited, Project on Gov t Oversight (June 14, 2011), Adam Ashton, US Subcontractor Keeps 1,000 Asians Confined in Iraq Warehouse, The Christian Sci. Monitor (Dec. 3, 2008), available at Middle-East/2008/1203/p99s02-wome.html. 11. Id. 12. Isenberg & Schwellenbach, supra note Am. Civil Liberties Union, Victims of Complacency: The Ongoing Trafficking and Abuse of Third Country Nationals by U.S. Government Contractors (2012) [hereinafter ACLU Report]. 14. Id. at See id. at 15, 20, 22, Comm n on Wartime Contracting in Iraq and Afghanistan, Transforming Wartime Contracting: Controlling Costs, Reducing Risks 93 (2011) [hereinafter CWC Final Report]. 17. Id. at Stillman, supra note 6, at This riot was not an isolated incident. See, e.g., ACLU Report, supra note 13, at 5 ( Most recently, in December 2011, dozens of Ugandan [Third Country Nationals (TCNs)] held a series of rallies in Baghdad; their employer, a U.S.-based contractor, had left them stranded-with no pay and no return airfair-upon losing its USG contract as a result of the military drawdown. ). 19. See Stillman, supra note 6, at ACLU Report, supra note 13, at 5, 20; see also Stillman, supra note 6, at See ACLU Report, supra note 13, at 21; 2013 Trafficking in Persons Report, supra note 1, at See infra notes and accompanying text. 23. Supra notes 3-5 and accompanying text. 24. See generally Exec. Order No , 3 C.F.R. 309 (2012). 25. See generally id. at Trafficking in Persons Report, supra note 1, at 7. Only 40,000 victims of trafficking had been identified between 2012 and Id. at 7. According to the State Department, a mere fraction of the more than [twenty-six] million men, women, and children who are estimated to suffer have been recognized by government as such. Id. It should be noted that there is no one universal definition of human trafficking. See id. at 29. The best description, provided by the State Department, is to describe human trafficking as an umbrella consisting of, inter alia, compelled commercial sexual exploitation, prostitution of both minors and adults, debt bondage, and/or forced labor. Id. The Trafficking Victims Protection Act of 2000 (TVPA), illustrates the variation of the definition of the word by providing multiple examples, from forced performance in sex acts to forced labor. See 22 U.S.C. 7102(8)-(9) (2006) U.S.C. 7101(b)(1). 28. Id. 7101(b)(3). 29. Id. Accordingly, the TVPA demonstrates that the definition of human trafficking can and does vary, depending on the various human rights standards and definitions used. See id. This Note will limit the definition of human trafficking to the United States legally defined terms and will not discuss international governments and organizations approaches and definitions to combating human trafficking. 30. Id. 7102(8). The TVPA s definition is too narrowly tailored to grant effective protection to victims. See infra notes and accompanying text. The TVPA defines a victim of trafficking as a person subjected to an act or practice described in paragraph (8) [severe forms of trafficking in persons] or (9) [sex trafficking]. 22 U.S.C. 7102(14). Consequently, in order for an individual to qualify for protection under the TVPA, they must have been subjected to a severe form of human trafficking or a form of sex trafficking which creates a paradox. See id. As explained in the State Department s 2012 Trafficking in Persons Report, [e]xploitation lies at the core of modern slavery, 2012 Trafficking in Persons Report, supra note 1, at 9, yet the U.S. Government defined human trafficking only to only encompass sex trafficking and severe forms of trafficking. 22 U.S.C. 7102(8)-(9), (14)(2006); see 66 Summer 2014 / Journal of Contract Management

9 also Liana Sun Wyler, Cong. Research Serv., R42497, Trafficking in Persons: International Dimensions and Foreign Policy Issues for Congress 6 (2012) (noting that the definition of human trafficking varies both in international treaties and domestic law; such difference can trigger different policy consequences ); Labor Abuses, Human Trafficking and Government Contractors: Is the Government Doing Enough to Protect Vulnerable Workers?: Hearing Before the Subcomm. on Tech., Info., Policy, Intergovernmental Relations and Procurement Reform of the H. Comm. on Oversight and Gov t Reform, 112th Cong. 4 (2012) [hereinafter Labor Abuses Hearing] (statement of Sen. Rob Portman) ( Broadly defined, it means forced labor and severely coercive labor practices including the practice of recruiting workers who leave home based on fraudulent promises about working conditions or wages and including confiscating passports, charging workers recruitment fees that consume more than a month s salary, and creating indentured, servitude type conditions. It includes unlawful restrictions on the ability of workers to return home and sometimes failure to assist in the repatriation when jobs are over. ). 31. Wyler, supra note 30, at 6. Wyler notes that the U.S. definition, set forth in TVPA, is more restrictive than the United Nations (U.N.) definition because the U.N. s purpose was to promote international cooperation and the U.S. s was aimed at measuring international progress in halting human trafficking. Id.; see also 22 U.S.C. 7102(8). 32. See 22 U.S.C The TVPA was renewed on March 7, 2013, as an amendment to the Violence Against Women Reauthorization Act of 2013, Pub. L. No , , 127 Stat. 54, (2013) (codified as amended at 22 U.S.C. 7103). The National Defense Authorization Act for Fiscal Year 2013, Pub. L. No , 126 Stat (2013), the appropriations act for the Department of Defense and for defense activities of the Department of Energy, implements many of the same definitions and requirements of the TVPA, with some slight alternations to the TVPA language. See id U.S.C. 7102(5). [T]he primary international definition of forced labor can be found in [International Labor Organization Convention (ILO)] No. 29, the Forced Labour Convention of 1930, which defines forced or compulsory labour as all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily. Wyler, supra note 30, at FAR U.S.C (Congressional Findings). 36. See ACLU Report, supra note 13, at CWC Final Report, supra note 16, at Id. at Id. at Id. at Id. at Id. 43. See Labor Abuses Hearing, supra note 30, at 4-5 (statement of Sen. Rob Portman). 44. Id.; see also CWC Final Report, supra note 16, at See ACLU Report, supra note 13, at See Exec. Order No. 13,627, 3 C.F.R (2012). 47. John G. Bradbury, Note, Human Trafficking and Government Contractor Liability: Is FAR A Step in the Right Direction?, 37 Pub. Cont. L.J. 907, 916 (2008). 48. Id. at 916, 918. Under the Federal Acquisition Regulation (FAR), as long as the contractor is not aware of the violations, its liability is limited. See FAR (d)(1). As soon as the contractor becomes aware, it must then report the infractions and/or resolve the infractions. Id. There is thus a greater incentive for the prime contractor to hire a foreign subcontractor outside of the jurisdiction of the United States, so that if the subcontractor is involved in human trafficking (either directly or indirectly via a recruiter), the prime contractor can remain unaware of the infraction and not face liability from the U.S. Government. See Bradbury, supra note 47, at CWC Final Report, supra note 16, at ACLU Report, supra note 13, at 28. The prime contractor will typically subcontract out for labor, taking only an administrative percentage fee from the top of the total amount allotted to the contractor to hire the labor. Id. The subcontractor then hires a recruiter to recruit workers from impoverished areas. Id. The recruiter receives recruitment fees from the workers, in addition to the money paid to them by the subcontractor. Id. The subcontractor will then typically cut corners and underpay the TCNs and have a surplus or savings out of the total allotted amount of money from the U.S. Government. Id. In total, the recruiter ends up making a profit (recruiter fees from TCNs plus payment from subcontractor) and the subcontractor pockets the original contract leftovers. Id. The American Civil Liberties Union (ACLU) demonstrated, in a hypothetical example, that $120,000 allotted to hire ten TCNs for one year results in a fraudulent profit of approximately $30,000 in illegal recruitment fees ($15,000 each to the recruiter and subcontractor) and $58,000 in surplus that is pocketed by the subcontractor by not providing adequate housing, food, and salary. Id. 51. See id. at 29-30, Exec. Order No. 13,627, 3 C.F.R. 310 (2012). 53. Id. at Id. at , Id. at ; see also Protections Against Trafficking in Persons in Federal Contracts, 78 Fed. Reg (Feb. 12, 2013). As of this writing, the FAR Council has not updated the FAR to reflect the requirements issued in Executive Order (EO) 13627, but on February 12, 2013 the FAR Council announced that it was requesting comments that it would use to inform the development of regulations and other guidance to implement the [EO] and new statutory provisions. Id. The Council held a public meeting to receive oral comments on March 5, Id. It issued proposed regulations on September 26, Federal Journal of Contract Management / Summer

10 Acquisition Regulation; Ending Trafficking in Persons, 78 Fed. Reg (Sept. 26, 2013). Significantly, the proposed language omits qualifying language and appears to apply to any federal contractor, subcontractor, or employee, irrespective of whether the prohibited conduct occurred in the performance of a Government contract. W. Barron A. Avery, FAR Council issues wide-ranging proposed anti-trafficking regulations, Lexology (Sept. 27, 2013), www. wileyrein.com/publications.cfm?sp=articles&id= Exec. Order No. 13,627, 3 C.F.R Id. 58. Id. at Id. (emphasis added). Again, if the contractor becomes aware, then the contractor would be required to report. FAR (d)(1). If the contractor remains unaware, the contractor is neither liable nor required to inform the Inspector General. See id. Accordingly, contractors may be reticent to answer calls to avoid generating reports. See Stillman, supra note 6, at Exec. Order No. 13,627, 3 C.F.R. 313; see also Are Government Contractors Exploiting Workers Overseas? Examining Enforcement of the Trafficking Victims Protection Act: Hearing before the Subcomm. on Tech. Info. Policy, Intergovernmental Relations, and Procurement Reform of the H. Comm. on Oversight and Gov t Reform, 112th Cong. 3 (2011) [hereinafter Government Contractors Hearing] (statement of Rep. James Lankford, Chairman, Subcomm. on Tech. Info. Policy, Intergovernmental Relations, and Procurement Reform) ( This is not a case where clear law is lacking; it seems to be a case where enforcement is lacking. ). 61. Wyler, supra note 30 (Summary). Other legislation addressing human trafficking such as the Child Soldiers Prevention Act of 2008, the Tariff Act of 1930, and other various trade preference programs authorized by Congress, Wyler, supra note 30, at 1, are beyond the scope of this Note. 62. Brittany Warren, Note, If You Have a Zero-Tolerance Policy, Why Aren t You Doing Anything? : Using the Uniform Code of Military Justice to Combat Human Trafficking Abroad, 80 Geo. Wash. L. Rev. 1255, 1263 (2012). TVPA was originally passed in 2000 and was amended by subsequent reauthorizations in 2003, 2005, and Id. at The TVPA was renewed on March 7, 2013, as an amendment to the Violence Against Women Reauthorization Act of 2013, Pub. L. No , , 127 Stat. 54, (2013) (codified as amended at 22 U.S.C. 7103). 63. See 18 U.S.C (2006); see also ACLU Report, supra note 13, at ACLU Report, supra note 13, at Warren, supra note 62, at FAR (a). 67. FAR (b), (c). 68. FAR (b). 69. FAR (d)(1). 70. FAR (e). 71. See Violence Against Women Reauthorization Act of 2013, Pub. L. No , , 127 Stat. 54, (2013) (codified as amended at 22 U.S.C. 7103). 72. National Defense Authorization Act for Fiscal Year 2013, Pub. L. No , 126 Stat (2013). 73. Id. at Brittany Prelogar, Laura Ardito, & Michael Navarre, Steptoe & Johnson LLP, New Human Trafficking Laws and U.S. Government Initiatives Make Anti-Trafficking a Compliance Priority for Businesses in 2013 (2013), available at www. steptoe.com/publications-pdf.html/pdf/?item_id= See National Defense Authorization Act for Fiscal Year (a) (emphasis added). Here, the contractor would merely have to, to the best of their knowledge, not engage in trafficking, leaving no true means of enforcement for that prohibition, but only more rhetoric. See supra notes and accompanying text. 76. See Stillman, supra note 6, at 61 (noting that when reporting a rape of a TCN, the U.S. Army s emergency sexual-assault hotline remained unanswered and [d] espite several calls over several days, the number simply rang and rang ); see also Labor Abuses Hearing, supra note 30, at 8 (statement of Sen. Connolly) ( We noted that there virtually had never been a prosecution on this charge even though it was a widespread practice in both Iraq and Afghanistan with contractors or subcontractors. Very few debarments or suspensions of contractors even though it was again well known as a widespread practice. ); ACLU Report, supra note 14, at Wyler, supra note 30, at 23 ( [M]any experts have questioned why such cases rarely result in criminal prosecution or other enforcement measures. Though there are anti-trafficking laws, regulations, and zero-tolerance policies in place, some question whether they are effectively enforced. ). 78. Warren, supra note 60, at U.S. Dep t of Def., MEJA (18 U.S.C et. seq.), Federal Prosecutions, and Alternative Article 2, UCMJ Dispositions, As of June 30, 2010, Dep t of Def. 2 (2010), available at Id. 81. See id.; ACLU Report, supra note 13, at 44 ( In the twelve years since Congress passed the statute, however, the [DoD Inspector General (DoD-IG)] has referred remarkably few cases to [the Department of Justice (DoJ)] for prosecution. ). Importantly, in 2006 Congress amended the Uniform Code of Military Justice (UCMJ) to expand jurisdiction to include civilian contractors. Id. at 45. However, the DoD has hardly used this amendment because of the apparent constitutional challenges that would arise from applying military jurisdiction over civilian contractors to situations other than formal wars. Id. 82. ACLU Report, supra note 13, at See FAR (e). 68 Summer 2014 / Journal of Contract Management