Darrell Issa | Serving California's 49th District

Investigating an Alleged $500 Million Contracting Fraud at the IRS

March 4, 2013

As a watchdog of taxpayer money, I am investigating possible contracting fraud at the Internal Revenue Service (IRS).  A whistleblower tip has led me to demand answers from the U.S. Department of the Treasury to determine if a personal relationship between an IRS employee and the owner of a private computer company resulted in a series of government contracts worth nearly $500 million.

In 2012, Signet Computers, a company specializing in Information Technology (IT) issues, received federal contracts totaling approximately $500 million – all but $180,835 of them from the IRS.  Prior to this, the company did not receive any federal awards.

The fact that Signet Computers received a half-billion dollars worth of contracts in a matter of months, despite no track record of past performance, raises many serious questions.  Further evidence suggests Signet Computers may have deceived the U.S. Small Business Administration in order to help win IRS contracts.

I have demanded that the Treasury Department – which oversees the IRS – turn over related documents.  More information will help determine why the IRS awarded these contracts.

Last year, the federal government spent $81 billion on IT systems and programs.  According to some experts, the cost to taxpayers of IT waste could be as high as $20 billion per year.  I have introduced legislation to address this problem and will continue to pursue allegations of government fraud and corruption.

Click here to watch my discussion with Fox News about the IRS investigation