WASHINGTON — Companies fraudulently collected at least $100 million in federal contracts from a $4 billion government program designated for disabled military veterans who run small businesses, congressional investigators charge.

The Small Business Administration failed to check if companies were eligible for the no-bid contracts for veterans with service-related injuries, allowing, for example, a contracting employee at a military base in Tampa, Fla., to improperly funnel a $900,000 Air Force contract to his wife's firm.

Moreover, because there are few penalties for companies found ineligible, many were still being handed tens of millions of dollars in government work even after they were found to be flouting the rules, according to the report released today by the Government Accountability Office.

In many cases, small business owners falsely claimed they had a service-related injury to get the federal work — such as a $7.5 million FEMA contract for Hurricane Katrina work — and were only caught when competitors protested. In other situations, the small veteran-owned businesses were legitimate but then improperly passed the work to large or foreign-based corporations.

"It is absolutely unacceptable that some businesses have been allowed to fraudulently and shamefully profit at the expense of our veterans," said Rep. Glenn Nye, D-Va., who chairs a House subcommittee on small business contracting.

Nye said he plans to hold hearings and work to develop legislation to hold firms accountable.

By The Associated Press