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Washington D.C. — The leader of the nation’s largest independent union of federal employees today offered strong support for legislation that seeks to ensure that private contractors are current in their federal tax obligations before they can receive a contract for goods or services from a federal agency.

“It is clear that tens of thousands of private companies continue to take advantage of the vast majority of taxpayers who comply with their tax responsibilities,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU).

“These outlaw contractors short-change the Treasury by failing to pay billions of dollars in taxes due—taxes that have to be made up from general revenues,” she said, “yet government agencies continue to award them taxpayer money in the form of federal contracts.”

The NTEU leader added: “It is time for this absolute outrage to stop.” She called it “another example of the serious issues raised by the runaway contracting practices of this administration.”

NTEU is supporting legislation—H.R. 1870—introduced by Rep. Edolphus Towns (D-N.Y.) that would allow the IRS to reveal to federal agencies whether prospective contractors had any outstanding tax obligations prior to an agency awarding a contract.

In recent years, the Government Accountability Office (GAO) has reported repeatedly that thousands of federal contractors—serving such key agencies as the Departments of Defense, Justice

and Homeland Security—owe billions in unpaid taxes. Much of the unpaid liability, GAO has said, is in the form of unpaid payroll taxes, made up of money withheld from the pay of employees but not turned over to the Internal Revenue Service.

Just yesterday, GAO presented testimony on this issue to the House Oversight and Government Reform Subcommittee on Government Management, Organization and Procurement.

The GAO representative identified instances in which owners of companies doing business with the government used funds that should have gone to the Treasury to pay for a variety of luxury items, including boats, sports cars, homes and other real estate both in this country and abroad, gambling and other uses.

As the largest independent federal union, NTEU represents some 150,000 employees in 31 agencies and departments.