Guest Post by Matt Taibbi
When the Defense Department flunked its first-ever fiscal review, one of our government’s greatest mysteries was exposed: Where does the DoD’s $700 billion annual budget go?
A retired Air Force auditor — we’ll call him Andy — tells a story about a thing that happened at Ogden Air Force Base, Utah. Sometime in early 2001, something went wrong with a base inventory order. Andy thinks it was a simple data-entry error. “Someone ordered five of something,” he says, “and it came out as an order for 999,000.” He laughs. “It was probably just something the machine defaulted to. Type in an order for a part the wrong way, and it comes out all frickin’ nines in every field.”
Nobody actually delivered a monster load of parts. But the faulty transaction — the paper trail for a phantom inventory adjustment never made — started moving through the Air Force’s maze of internal accounting systems anyway. A junior-level logistics officer caught it before it went out of house. Andy remembers the incident because, as a souvenir, he kept the June 28th, 2001, email that circulated about it in the Air Force accounting world, in which the dollar value of the error was discussed.
Wanted to keep you all informed of the massive inventory adjustment processed at [Ogden] on Wednesday of this week. It isn’t as bad as we first thought ($8.5 trillion). The hit . . . $3.9 trillion instead of the $8.5 trillion as we first thought.
The Air Force, which had an $85 billion budget that year, nearly created in one stroke an accounting error more than a third the size of the U.S. GDP, which was just over $10 trillion in 2001. Nobody lost money. It was just a paper error, one that was caught.
“Even the Air Force notices a trillion-dollar error,” Andy says with a laugh. “Now, if it had been a billion, it might have gone through.”
Years later, Andy watched as another massive accounting issue made its way into the military bureaucracy. The Air Force changed one of its financial reporting systems, and after the change, the service showed a negative number for inventory — everything from engine cores to landing gear — in transit.
Freaked out, because you can’t have a negative number of things in transit, Air Force accountants went back and tried to reverse the mistake. In doing so, they somehow ended up adding more than $4 billion in value to the Air Force’s overall spare-parts inventory in a single month.
This suspicious number is still there. You can see a sudden spike in the Air Force’s working-capital fund’s stagnant spare-parts numbers. It was $23.2 billion in 2015, $23.3 billion in 2016, $24.4 billion in 2017, and then suddenly $28.8 billion in September 2018.
That doesn’t mean money was lost, or stolen. It does, however, mean the Air Force probably has less inventory on hand than it thinks it does.
Now retired, Andy sometimes visits his neighborhood library, which uses RFID smart labels, or radio frequency identification, allowing it to know where all its books are at all times.
Meanwhile, the Air Force, which has a $156 billion annual budget, still doesn’t always use serial numbers. It has no idea how much of almost anything it has at any given time. Nuclear weapons are the exception, and it started electronically tagging those only after two extraordinary mistakes, in 2006 and 2007. In the first, the Air Force accidentally loaded six nuclear weapons in a B-52 and flew them across the country, unbeknownst to the crew. In the other, the services sent nuclear nose cones by mistake to Taiwan, which had asked for helicopter batteries.
“What kind of an organization,” Andy asks, “doesn’t keep track of $20 billion in inventory?”
Despite being the taxpayers’ greatest investment — more than $700 billion a year — the Department of Defense has remained an organizational black box throughout its history. It’s repelled generations of official inquiries, the latest being an audit three decades in the making, mainly by scrambling its accounting into such a mess that it may never be untangled.
Ahead of misappropriation, fraud, theft, overruns, contracting corruption and other abuses that are almost certainly still going on, the Pentagon’s first problem is its books. It’s the world’s largest producer of wrong numbers, an ingenious bureaucratic defense system that hides all the other rats’ nests underneath. Meet the Gordian knot of legend, brought to life in modern America.
AT THE TAIL end of last year, the Department of Defense finally completed an audit. At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate.
The audit is the last piece in one of the great ass-covering projects ever undertaken, also known as the effort to give the United States government a clean bill of financial health. Twenty-nine years ago, in 1990, Congress ordered all government agencies to begin producing audited financial statements. Others complied. Defense refused from the jump.
It took a Herculean legislative effort lasting 20 years to move the Pentagon off its intransigent starting position. In 2011, it finally agreed to be ready by 2017, which turned into 2018, when the Department of Defense finally complied with part of the law ordering “timely performance reports.”
Last November 15th, when the whiffed audit was announced, Deputy Secretary of Defense Patrick Shanahan said it was nothing to worry about, because “we never expected to pass it.” Asked by a reporter why taxpayers should keep giving the Pentagon roughly $700 billion a year if it can’t even “get their house in order and count ships right or buildings right,” Shanahan quipped, “We count ships right.”
This was an inside joke. The joke was, the Pentagon isn’t so hot at counting buildings. Just a few years ago, in fact, it admitted to losing track of “478 structures,” in addition to 39 Black Hawk helicopters (whose fully loaded versions list for about $21 million a pop).
That didn’t mean 478 buildings disappeared. But they did vanish from the government’s ledgers at some point. The Pentagon bureaucracy is designed to spend money quickly and deploy troops and material to the field quickly, but it has no reliable method of recording transactions. It designs stealth drones and silent-running submarines, but still hasn’t progressed to bar codes when it comes to tracking inventory. Some of its accounting programs are using the ancient computing language COBOL, which was cutting-edge in 1959.
“These systems,” as one Senate staffer puts it, “were not designed to be audited.”
If and when the defense review is ever completed, we’re likely to find a pile of Enrons, with the military’s losses and liabilities hidden in Enron-like special-purpose vehicles, assets systematically overvalued, monies Congress approved for X feloniously diverted to Program Y, contractors paid twice, parts bought twice, repairs done unnecessarily and at great expense, and so on.
Enron at its core was an accounting maze that systematically hid losses and overstated gains in order to keep investor money flowing in. The Pentagon is an exponentially larger financial bureaucracy whose mark is the taxpayer. Of course, less overtly a criminal scheme, the military still churns out Enron-size losses regularly, and this is only possible because its accounting is a long-tolerated fraud.
We’ve seen glimpses already. The infamous F-35 Joint Strike fighter program is now projected to cost the taxpayers $1.5 trillion, roughly what we spent on the entire Iraq War. Overruns and fraud from that program alone are currently expected to cost taxpayers about 100 times what was spent on Obama’s much-ballyhooed Solyndra solar-energy deal.
Meanwhile, the Defense Department a few years ago found about $125 billion in administrative waste, a wart that by itself was just under twice the size of that $74 billion Enron bankruptcy. Inspectors found “at least” $6 billion to $8 billion in waste in the Iraq campaign, and said $15 billion of waste found in the Afghan theater was probably “only a portion” of the total lost.
Even the military’s top-line budget number is an Enron-esque accounting trick. Congress in 2011 passed the Budget Control Act, which caps the defense budget at roughly 54 percent of discretionary spending. Almost immediately, it began using so-called Overseas Contingency Operations (OCO), a giant second checking account that can be raised without limit.
Therefore, for this year, the Pentagon has secured $617 billion in “base” budget money, which puts it in technical compliance with the Budget Control law. But it also receives $69 billion in OCO money, sometimes described as “war funding,” a euphemistic term for an open slush fund. (Non-defense spending also exceeds caps, but typically for real emergencies like hurricane relief.) Add in the VA ($83 billion), Homeland Security ($46 billion), the National Nuclear Security Administration ($21.9 billion) and roughly $19 billion more in OCO funds for anti-ISIS operations that go to State and DHS, and the actual defense outlay is north of $855 billion, and that’s just what we know about (other programs, like the CIA’s drones, are part of the secret “black budget”).
In a supreme irony, the auditors’ search for boondoggles has itself become a boondoggle. In the early Nineties and 2000s, the Defense Department spent billions hiring private firms in preparation for last year. In many cases, those new outside accountants simply repeated recommendations that had already been raised and ignored by past government auditors like the Defense inspector general.
After last year’s debacle, the services are now spending even more on outside advice to prepare for the next expected flop. The Air Force alone just awarded Deloitte up to $800 million to help the service with future “audit preparation.” The Navy countered with a $980 million audit-readiness contract spread across four companies (Deloitte, Booz Allen Hamilton, Accenture and KPMG).
Taxpayers, in other words, are paying gargantuan sums to private accounting firms to write reports about how previous recommendations were ignored.
It’s all a Catch-22 story about a country trapped in an endless cycle of avoidable financial disaster. Each time we try to fix leaks, we end up back where we started, staring at even bigger numerical representations of failure.
For instance, part of what inspired original investigations into defense finances were infamous stories in the 1980s and early Nineties about the military charging $640 for toilet seats, $436 for hammers, etc. A chief crusader was a young Iowa Sen. Chuck Grassley, who was so determined to hear such tales from famed military whistle-blower Franklin C. “Chuck” Spinney — one of the first military analysts to go public with accusations of waste and procurement fraud — that early in 1983 Grassley drove to the Pentagon in an orange Chevette to see him.
The DoD refused to let Grassley see Spinney. Grassley got him to testify on the Hill six weeks later.
“The following Monday, his photo was on the cover of Time magazine,” Grassley recalls. The March 1983 cover asked, are billions being wasted?
“A long time after I leave the Senate, [Pentagon spending] will be the same problem,” says Senator Chuck Grassley, R-Iowa. Photo credit: J Scott Applewhite/AP/REX/Shutterstock
It seemed like a breakthrough. Spinney’s tales of waste became symbols that aroused the imagination of both the left and the right, who each saw in them their own vision of government run amok.
But 35 years later, Chuck Grassley, now 85, is still sending letters to the Pentagon about overpriced parts, only this time with more zeros added. The Iowan last year asked why we were spending more than $10,000 apiece for 3D printed airborne toilet-seat covers, or $56,000 on 25 reheatable drinking cups at a brisk $1,280 each (apparently an upgrade to earlier iterations of $693 coffee cups, whose handles broke too easily). The DoD has since claimed to have fixed these problems.
Asked if he was frustrated that it’s the same stories decades later, Grassley says, “Absolutely.” He pauses. “And a long time after I leave the Senate, it’ll likely still be the same problem.”
Three decades into the effort to pry open the Pentagon’s books, it’s not clear if we’ve been going somewhere, or we’ve just been spending billions to get nowhere, in one of the most expensive jokes any nation has played on itself. “When everything’s always a mystery,” says Grassley, “nothing ever has to be solved.”
THIS STARTED with an accident.
“The only reason the audit is happening,” says Sheila Weinberg, CEO of the watchdog group Truth in Accounting, “is because an accountant got sent to Congress.”
In 1985, a brusque Italian-Albanian named Joe Dio-Guardi ran as a Republican for a House seat in New York’s 20th District.
DioGuardi was the son of an immigrant grocer. Before he went on to a Jesuit education at Fordham, his schooling came in the aisles of his father’s store. “I was trained in stock,” DioGuardi says today. “You learn value if you end up chasing someone down the streets of the Bronx if they steal a box.”
In his teen years he went on to be a waiter at Westchester country clubs. He’d watch chefs steal steaks out of the kitchen at the end of every year, knowing that “these rich people . . . if there was a deficit, they would just kick it in at the end of the year.”
From waiting tables he went on to spend 22 years as an accountant at Arthur Andersen, among other things diving into New York City’s financial collapse in the Seventies. He recalls the city still listed buildings that had burned down as current assets. “I learned a lot about the difference between public and private accounting,” he remembers.
In the mid-Eighties, he ran as a Republican for Congress in a Westchester district. It was considered a safe blue seat, with Democrats outnumbering Republicans. He calls himself “the accidental congressman,” because “if my party knew I would win, they wouldn’t have put me up. I was a sacrificial lamb.”
But in a preview of cross-party populist currents, he did win, in part by highlighting his working-class ethnic background, trumpeting his accounting credentials, and sounding bipartisan themes about cleaning up corruption. He promised to “illuminate the dark fiscal corners” of the federal bureaucracy.
In Washington, DioGuardi was horrified by the federal government’s “smoke and mirrors” budgeting. He told fellow Republicans the techniques Congress used would get private-sector officers “sent to jail.”
“Joey the Waiter,” who is 78 today, still has the same tough-talking New York personality he had as a candidate. It’s easy to laugh imagining how his insistent Bronx demeanor was received by some of his more upper-crust and genteel colleagues back then. It would explain why he was first ignored when he began writing legislation to force the government to undergo the kind of auditing that’s mandatory in the private sector.
But when the savings-and-loan crisis plunged America into a financial scare in the late Eighties, “fiscal responsibility” became a political catchword. Instantly, “Joey the Waiter” was in demand. “Suddenly, everyone was like, ‘Where’s that bill DioGuardi wrote?’ ” he recalls.
He found diverse allies in a pair of Democrats, Sen. John Glenn and Rep. John Conyers. Together they authored what would ultimately be called the “Chief Financial Officers Act of 1990.”
The legislation forced government agencies to name a CFO, conduct audits and create “modern federal financial management structure.” Twenty-three agencies, from Defense to Labor to State, were ordered to begin submitting “department-wide annual audited financial statements” by 1994.
Although there were regulations over the years requiring various forms of financial reporting, nothing like a full-scale federal audit had ever been attempted. Incredibly, from an accounting perspective, the U.S. government had remained essentially virgin territory for centuries.
As far back as 1787, the Constitution mandated “a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” But no independent examiner had ever fully checked the government’s books. By the late Eighties and early Nineties, hundreds of billions of tax dollars were being spent annually, and no one really knew where. To DioGuardi, the situation was outrageous.
“It’s a constant principle in history, from the Medicis to today,” says DioGuardi. “If no one’s watching the money, there will be bankruptcies.”
THE CFO Act at least introduced the idea that someone was supposed to be watching. By 1997, Cabinet-level departments like Labor, Agriculture and Commerce were submitting financial reports. In the first year, only six were able to pass. Within a few years, however, most were in compliance. By 2013, Defense was the only federal agency that had not submitted a financial statement.
One of the main reasons the military wasn’t submitting numbers was it didn’t have them. The Pentagon every year employs an accounting shortcut that should make more sense to civilians at this time of year, because it’s similar to what the roughly six percent of Americans who cheat on taxes do annually.
Taxpayers who think they’re owed deductions, but don’t have the receipts to back up their expenses, will sometimes take a rough guess, maybe based on what their prior-year deductions were. Then they file returns infected with guesses, “plugged” in to look like deductions counted up honestly.
The Pentagon does basically the same thing, only on a galactic scale. At the end of every year, it submits a “Budget execution request” that includes complete month-by-month statements of that year’s spending.
The White House will then take these numbers and use them to project a defense budget for the following year. The president submits that budget to Congress, which in turn will actually appropriate the money. Almost without exception, the Pentagon ends up getting a raise. For 2019, Donald Trump submitted a budget that asked for $716 billion, or $82 billion more than the Department of Defense received the previous fiscal year.
The system makes sense, except for one problem: The financial reports the Pentagon submits are faked.
The Defense Department, for the most part, does not know how much it spends. It has a handle on some things, like military pay, but in other places it’s clueless. None of its services — Navy, Air Force, Army, Marine Corps — use the same system to record transactions or monitor inventory. Each service has its own operations and management budget, its own payroll system, its own R&D budget and so on. It’s an empire of disconnected budgets, or “fiefdoms,” as one Senate staffer calls them.
Instead of using a single integrated financial accounting system that would maintain a global picture of its finances at all times, the Pentagon built another bureaucracy to pile atop the others, called the Defense Finance and Accounting Service, or DFAS. Created by then-Defense Secretary Dick Cheney in 1991, DFAS is in charge of collecting financial reports from all the different fiefdoms at the end of each month. DFAS is like a tribune traveling on horseback at month’s end, collecting a pile of scrolls from each castle.
In 2013, Reuters published a brutal exposé showing how DFAS accountants conducted a mad scramble at the end of each month to try to piece together records of transactions to justify spending. But in thousands of cases a month, no records existed. “We didn’t have the detail,” one accountant explained.
Complicating matters is the fact that money is allocated to the military on different schedules. If Congress gives the Navy $53 billion for operations and maintenance, as it did this year, the service is expected to spend all that money that year. Such expenses — payroll is another — are called “one-year money.” Meanwhile, research and development might be “two-year money,” and contracting might be “five-year money.”
There have been multiple cases involving officials taking advantage of flaws in the Pentagon’s system over the years. A civilian secretary bilked the Air Force out of $1.4 million for more than a decade before anyone noticed. Photo credit: REX/Shutterstock
If the Pentagon doesn’t spend all the money in exactly the amounts Congress says it can spend, in the time ordained by Congress — if it doesn’t spend all its one-year money in one year, all its five-year money in five years and so on — the military is supposed to give its unspent money back to Congress.
But the military is never really on time, and constantly commingles its various pots of money. Grassley in the late Nineties found out the military was using a computer program called MOCAS, or Mechanization of Contract Administration Services, to help speed this commingling. Whenever the Pentagon had bills to pay, instead of just drawing the money from the right account, MOCAS would sometimes try to spend “old money” first, i.e., from whatever funds were about to expire.
It’s illegal for any government agency to spend money appropriated for one purpose on a different program. But the military — either hilariously or horribly, depending on your perspective — created a program that algorithmically produced such violations
of the law. They weren’t minor violations: Grassley has fought for years against such automatic payments, saying bureaucrats use them to “avoid violations of the Antideficiency Act — a felony.” Last year’s audit found the Antideficiency Act was one of five laws the agency violated.
MOCAS still exists, but it’s unclear how or if it’s been updated. In any case, Defense still lacks rec-ords showing that it’s paying for the right programs from the right accounts. Out of terror that it might have to return money as a result, the DoD orders its accountants to make numbers fit.
Those DFAS accountants in the Reuters exposé were told by superiors that if they couldn’t find invoices or contracts to prove the various services spent their one-year money and two-year money and five-year money on time, they should execute “unsubstantiated change actions,” i.e., lie.
The accountants systematically “plugged” in fake numbers to match the payment schedules handed down by the Treasury. These fixes are called “journal voucher adjustments” or “plugs.”
As a result, those year-end financial statements will look like they match congressional intentions. In truth, the statements packed with thousands of plugs are fictions, a form of systematic accounting fraud Congress has quietly tolerated for decades.
The fake-number system is such long-accepted practice that it’s acquired numerous dull-sounding names. You’ll see the invented numbers called “forced-balance entries” by the General Accounting Office (which is run by Congress), “adjustments not adequately supported” by the Defense inspector general, and “journal vouchers” or “JVs” or “workarounds” by the Pentagon’s own comptroller general. On the Hill, everyone refers to “plugs.”
There are innocent explanations for plugs, although even the best excuse is still incompetence. For example, if the Navy buys a helicopter from the Army (which is the “item manager” in charge of monitoring all rotary-wing aircraft), it will show up as an expense on the books of both services. Although the money has been spent only once, both the Army and the Navy will report the expense.
Instead of canceling out such intramural accounting discrepancies, which is what would happen at any chain of doughnut shops, the Department of Defense never bothered to fix its accounting rules. With hundreds of different acronymic systems, a single error might generate bogus numbers exceeding the transactions’ original value.
This is a generous explanation for news of the sort released by the inspector general in 2016 showing the Army — with an annual budget of $122 billion — generated accounting plugs 54 times that amount, a full $6.5 trillion worth, in 2015 alone.
When civilian analysts see these numbers, they always first assume they’re typos, because no company could survive such gargantuan accounting snafus.
“When I saw that 6.5 trillion number for the first time, I thought it had to be a mistake,” says Michigan State University professor Mark Skidmore, who in 2017 led a study that discovered $21 trillion in plugs over a 17-year period. “I thought it was maybe 6 billion. But it’s really 6 trillion.”
As these stories leaked out to the public, the huge numbers became (mostly misunderstood) talking points on social media. New Rep. Alexandria Ocasio-Cortez, for instance, cited Skidmore’s study and tweeted that two-thirds of a $32 trillion proposed price tag for Medicare for All “could have been funded already” by the Pentagon.
Ocasio-Cortez didn’t have it quite right. Skidmore’s $21 trillion figure doesn’t mean that much money was wasted, or is sitting in a Swiss account somewhere. The Pentagon didn’t even receive that much money during the time period in question.
Moreover, some of the plugs are adjustments upward and some downward. If they were ever netted out — no one has ever tried — the size of the accounting hole might be smaller.
However, according to Andy and others, the $21 trillion figure may undercount the accounting errors in the system, as some plugs are both automated and unidentified. What’s clear is that the ubiquitous plugging and quantity of bad numbers in the Pentagon’s books are so massive that it will take a labor of the ages to untangle.
All of this is difficult to follow, but the key is that when a suspicious number pops up anywhere in the military’s multiple accounting silos, it typically isn’t investigated, but simply fixed on paper and sent on its way. In a private company, if inventory numbers suddenly jumped by a few billion dollars in one month, auditors would swarm warehouses in search of the problem.
The military can’t say the same. This was one of the things auditors found last year, that the Pentagon lacked “policies and procedures to confirm the existence of government property in possession of contractors.” This is a fancy way of saying the Pentagon doesn’t send inspectors to make sure Lockheed-Martin or Boeing or whoever still have parts they say they’re repairing or maintaining.
This, ultimately, is the conclusion of the audit. We don’t have anything like a full picture of what waste and abuse might be hidden under those plugs, though we have an idea (see sidebar).
We do, however, know the Pentagon’s books are so choked with bad data that discovering abuses in real time is virtually impossible. Compound that with decades of cuts to the Pentagon’s staff of criminal investigators and you have an open invitation to crime. Invoices could be systematically inflated for decades and no one would know. As Andy the Air Force accountant puts it, the system is “desensitized to fraud.”
IF YOU ASK congressional staffers why the plugging system is permitted, they just shrug. Congress really has only two ways to respond when the DoD breaks the law. Elected officials can shout and criticize the Pentagon, or withhold funds. The former is not terribly effective, and the latter has so far proved politically impossible.
“No other federal agency could get away with this,” is how one Senate staffer puts it.
The military has been told repeatedly to stop plugging and develop more rational accounting systems. In case after case, reforms compounded problems.
One of the first fixes was aimed at the infamous toilet seats and hammers. The General Accounting Office in 1992 issued a report blasting the military for “poor cost estimating” and suggested changes. The result was the invention of a creature called the “prime vendor,” basically a middleman with the power to set prices and choose subcontractors.
This system only inflated prices. By 2004, Defense was spending $7.4 billion annually on prime-vendor purchases, after spending $2.3 billion in 2002.
Knight-Ridder newspapers got wind of this and in 2005 reported the military was now buying 85-cent ice trays from prime vendors for $20 apiece. Within a month, a refrigerator for a C-5 airplane was being dragged on the floor of a House hearing and a Navy admiral named Keith Lippert was being asked by California’s Duncan Hunter — not exactly a pillar of rectitude himself — to explain why he’d bought nine fridges from a prime vendor for $32,642.
Over the years, this pattern repeated itself. An attempt to standardize the military’s payroll and personnel records system, called DIMHRS, took 12 years and cost more than $1 billion before being scrapped. In 2005, the Air Force set out to buy a standardized computer system from Oracle called the Expeditionary Combat Support System. It took seven years and more than $1 billion for that plan to be scrapped. John McCain joked about ECSS, “At least they got the toilet seat. Out of this, they got nothing.”
This same motif held with regard to the military’s promises about “audit readiness.” The Pentagon initially said it would be ready to be audited by 1997. After that date passed with a yawn, Pentagon officials made a series of bold promises.
In 2003, Defense comptroller Dov Zakheim told the House Budget Committee, “We anticipate having a clean audit by 2007.” Soon after disavowing that promise, he said, “The further we dug . . . the more difficulties turned up.”
In 2005, the Pentagon began supplementing its verbal promises with reports called the Financial Improvement and Audit Readiness (FIAR) plan. This report basically told you every year that we were getting closer to sorting all this stuff out. Some excerpts:
December 2005: “Progress has been achieved.” September 2006: “Progress has been made.” September 2007: “Progress has been made in several areas.” March 2008: “Substantial progress has been made.” March 2009: “Significant progress has been made, but much needs to be done.”
President Donald Trump speaks at a hanger rally at Al Asad Air Base, Iraq. Photo credit: Andrew Harnik/AP/REX/Shutterstock
The Pentagon had been attempting to conduct department-wide audits dating back to 1996. By the mid-2000s, perhaps 100 auditors from the DoD inspector general, plus a hundred or more from the various services, were annually trying to create a single financial statement, despite an almost complete lack of audit-trail information. They made some helpful recommendations, but would never get very far before concluding an audit was not possible.
“We were trying to make chicken soup out of chicken shit,” says an auditor, with a sad laugh.
After nearly 15 years of such exercises, Grassley grew so furious that he introduced an amendment ordering the Pentagon to stop trying to audit itself until it was capable of doing something useful. The amendment passed and lived on as Section 1003 of the 2010 National Defense Authorization Act.
The 2010 NDAA amendment also ordered the Pentagon to actually be ready by 2017. “It was, ‘Start over and get it done,’ ” says Grassley now.
The Grassley amendment stopped the annual mobilization of hundreds of auditors, but didn’t stop the audits completely. The two competing laws — the CFO Act and the 2010 NDAA — created a literal Catch-22, with the services both ordered and not ordered by law to complete audits of themselves.
The services tried to spend their way out of the problem. Incredibly, they began competing to see how much they could blow on audit-readiness programs. In 1997, the Army splurged at least $4 billion on the Global Combat Support System, which the Center for Public Integrity said was designed to centralize a dozen different outmoded accounting systems. The smaller Marine Corps developed its own system with the same name, and dropped $1 billion.
The GAO in 2009 then issued a report complaining $6 billion had already been spent in audit preparation. According to the GAO, it took that much money to get the Pentagon to a place where it could accurately track incoming appropriations.
In 2011, then-Defense comptroller Robert Hale confessed to Congress, “We don’t really fully understand in the Department of Defense what you have to do to pass an audit for military service, because we have never done it.”
Translation: Despite having 60,000 financial-management employees who’d had 21 years to wrap their heads around the task of producing financial statements, Hale admitted none had taken the plunge: “You can’t learn to swim on the beach.”
Speaking of beaches, Hale said he hoped to use the Marine Corps as an accounting “beachhead,” because it was ahead of the other services in terms of auditability. But a 2011 “trial audit” of the Marines ended in catastrophe. The inspector general found it couldn’t account for $2 billion in expenditures. It sounds worse when you consider they were only auditing a $4 billion portion of the Marines’ budget.
The Marines doubled down. In 2014, the Pentagon announced the Corps passed an audit for 2012. The event was so momentous, they marked the occasion in the Pentagon’s Hall of Heroes. Then-Defense Secretary Chuck Hagel was presented with a framed certification of the “clean” opinion. Hagel, a consistent ally of defense, beamed as he said, “We don’t spend a lot of time using big megaphones to tout our great accomplishments. . . . We get the job done.”
But word began to spread that the Marine audit was again a con job. “It was an intellectual exercise in cheating and deception,” says Grassley, whose office was in the middle of the effort to get the inspector general’s office to re-examine the results. Within a year, the inspector general withdrew its approval. “Our opinion on the FY 2012 United States Marine Corps,” it said, “is not to be relied upon.”
Even worse, it then came out that the inspector general’s office was sending emails down the chain, pressuring auditors to agree with an outside auditing firm, which already had a record of flawed audits of the Marine Corps. This should have been a red flag, according to retired military auditor Jack Armstrong.
“Why wouldn’t you want to train a very close eye when you’ve already had suspicions about the quality of their work?” says Armstrong.
Then-Defense Department comptroller Mike McCord was philosophical about the Marine fiasco. “It’s a learning experience,” he said.
AFTER ALL OF these false starts, it soon became clear that the only way to get the Pentagon to actually fix itself would be if Congress stopped sending money. Starting in 2012, a succession of legislators in both the House and Senate, including Tom Coburn, R-Okla.; Barbara Lee, D-Calif.; Ron Wyden, D-Ore.; Rand Paul, R-Ky.; Bernie Sanders, I-Vt.; and John McCain, R-Ariz., tried to introduce amendments yanking funding if the Pentagon didn’t correct itself.
“None have made it into law,” says Mandy Smithberger of the Project on Government Oversight.
A major problem is campaign finance reform. Ask Hill staffers why it’s hard to pass any bill that even contemplates withholding funding for the Pentagon, and they say you’ll run smack into a bipartisan batch of refuseniks who’ve been gorging on defense-sector campaign contributions, thanks to their status on committees like Armed Services or Appropriations.
“You can’t get the Pentagon to take an audit seriously unless you threaten to stop funding, and you can’t stop funding without campaign finance reform,” says one Hill staffer.
Unfortunately, the annual audit has now created a secondary cash flow for the accounting firms, which have formally entered the family of permanent high-end military contractors like Lockheed Martin, General Dynamics, Boeing and Raytheon.
The money now flows out in two directions. One estimate puts the annual cost for accounting at about a billion: $400 million a year for the audits by firms like Ernst & Young, and about $600 million for firms like Deloitte to fix problems identified by said audits.
The Pentagon can keep accountants busy forever simply doing the taxonomic job of describing its inauditability. The Defense Department employs 3 million people, has 280 ships, nearly 16,000 planes and 585,000 “facilities” in at least 80 countries. You’ve heard of “too big to fail” — the DoD’s universe is too big to count. “Impossible. . . . We can’t do it. . . . It’s too big,” one exasperated DoD official complained.
“They’re telling us it’s going to get worse before it gets better,” is how one Hill staffer puts it.
If auditors ultimately make sense of all their work, it’s worth it. But they could easily just keep inching toward compliance forever. “For a billion dollars a year,” says Grassley, “you ought to see progress.”
In April 2016, U.S. Comptroller General Gene Dodaro testified before the Senate that the Pentagon had spent up to $10 billion to modernize its accounting systems. Those attempts, he said, had “not yielded positive results.”
Two years later, Sens. Grassley and Sanders, along with Wyden and others, were asking Dodaro in a letter why no progress had been made toward getting those systems in place. “Are you going to finish it in my lifetime?” a Hill staffer is said to have demanded in a meeting with Dodaro. He got no answer.
Sanders last year introduced an amendment to ding the Pentagon for 0.5 percent of its funding until it passes (not takes, but passes) an audit. He failed, but is going to keep trying. For his office, the Pentagon audit issue is as much about misplaced social priorities as it is about waste and mismanagement.
“Over and over again, we’ve been told we cannot afford to guarantee health care as a right, make public colleges tuition-free, or seriously address any of the needs of the working class,” Sanders says. “When it comes to the massive waste, fraud and abuse at the Pentagon, there’s a deafening silence.”
Both Sanders and Grassley have been tilting at the Pentagon windmill for decades now, from opposite ends of the political spectrum. For Grassley, there is a sense of exhaustion.
Asked how much progress has been made toward creating a workable accounting system at the Pentagon, he says, “At my level, I would have to say zero.” He pauses. “Based on the track record, it seems like they don’t want to fix it.”
All this history sums up the conundrum. A Republican waste-hawk like Grassley laments the inability/unwillingness of the Pentagon to implement a modern, corporate-style, unified accounting system, and is convinced there will never be a clean audit until one is developed.
Meanwhile, a progressive like Sanders, who is anxious to dial back Pentagon spending as part of a general rethink of our national priorities, laments the inability/unwillingness of Congress to take the real steps needed to enforce compliance. The system of campaign contributions that keeps key committees captive probably locks this problem in place, until there’s reform on that end.
Both senators, unfortunately, have legitimate concerns. The twin obstacles to a true audit — one logistical, one political — are reasons few on the Hill feel confident a clean opinion is coming anytime soon. As one Hill staffer puts it, “DoD loves to find inefficiencies. It just means more they can spend.” He adds, “Every year, you know they’re going to get that $700 billion. That’s not going to change.”
Until someone passes a law with real teeth, that really threatens cuts of military appropriations, the most likely eventuality is the Department of Defense continuing to take and flunk audits at great expense in perpetuity. At best, each year we may end up getting a conclusion like this one about the 2018 audit, from the Pentagon’s inspector general. “The most important outcome . . . was not the overall opinion,” the IG wrote, “but that . . . the DoD makes progress.”
It’s impossible to overstate the enormity of the problem the DoD’s stalled audit poses. The fact that it can’t pass audit means the entire government is in the same boat. Until the Pentagon gets a passing grade, the whole United States will annually receive what’s called a “disclaimer of opinion” on its finances, which is accounting-ese for “Incomplete.”
DioGuardi, who set all this in motion 30 years ago, says no publicly traded company could issue a bond without passing an audit first. But the U.S. issues hundreds of billions in bonds, despite the gaping hole in its books caused by the endless unresolved problem at the Department of Defense. “From an accounting point of view,” he says, “it’s a horror story.”
“Ernst & Young will eat them alive,” says Andy. “It’s so much worse than people think.”
Just over 50 years ago, Dwight Eisenhower gave his famous farewell address warning of the power of the “military-industrial complex.” The former war commander bemoaned the creation of a “permanent armaments industry of vast proportions,” and said the “potential for the disastrous rise of misplaced power exists and will persist.”
Eisenhower’s warning is celebrated by the left as a caution against the overweening political power of warmakers, but as we’re now seeing, it was predictive also as a fiscal conservative’s nightmare vision of the future. The military has become an unstoppable mechanism for hoovering up taxpayer dollars and deploying them in the most inefficient manner possible. Schools crumble, hospitals and obstetric centers close all over the country, but the armed services are filling warehouses for some programs with “1,000 years’ worth of inventory,” as one Navy logistics officer recently put it.
It’s the ultimate example of the immutability of the American political system. Even when there’s broad bipartisan consensus, and laws passed, and both money allocated for changes and agencies created to enact them — if the problem is big enough, time bends toward corruption, and chaos always outlasts reform. Eisenhower couldn’t have predicted how right he was.
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal
-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)
Systems are systems but if the people throughout the service haven’t got the intelligence to both understand and effectively use the systems then you get chicken shit versus the desired chicken salad. In many instances a computer based inventory was backed up by an “under the desk” stubby pencil file folder. The prevalence of geniuses in logistics has never been a problem as all the social and political hires started and pretty much stayed there…..
Rocks with arms.
‘Suppression of News and a Web of Corruption’
A U.S. news outlet has revealed the Canadian government’s suppression of news inside Canada…and the name of the ‘power behind the throne’ responsible for the SNC-Lavalin scandal, the resignation of Jody Wilson-Raybould AND the government purchase of the Trans Mountain pipeline project:
“At Prime Minister Justin Trudeau‘s behest, Karina Gould, the Minister of ‘Democratic’ Institutions” threatened Google with “sweeping regulations” if they did not suppress criticism of the ‘Liberal’ government concerning the SNC-Lavalin scandal and the Wilson-Raybould resignation.
Google reluctantly complied, with the result that some stories appearing worldwide were not available to Canadians via Google. However, Google angrily responded that they would not be accepting ANY political advertising for the upcoming federal election – including from the ‘Liberal’ Party, which has upset the ‘Liberal’ government.
“Reluctantly complied”?
A hilarious article. You could have skipped past all these head spinning dead ended bunny trails and cut to Dov Zakheim, Under Secretary of Defense, Comptroller of the Pentagon, and Chief Financial Officer for the US military. His story tells you all you need to know that the DoD is hopelessly corrupt and completely insulated from scrutiny-especially from those bought and paid for scum bag politicians on capitol hill. Here’s a taste:
https://www.youtube.com/watch?time_continue=316&v=HlNQTG8B6hw
The folks at the Puzzle Palace make the Cosa Nostra look like a bunch of junior high school locker room bullies collecting lunch money from the scrawny kids.
It’s about unrestrained power: killing power, and money – fucken gargantuan amounts of both.
No one takes away the toys without grave risk; hence The Man From Queens (TM) (C) tells voters he wants to make peace with the Russians and also to disengage the military from Shitholistan, Iraq, Syria…He gets a Zapruder Briefing (TM) (C) instead and presto: troops will be staying in all those places plus increased teasing of the Russkies in the Baltic and Black Seas, and the generals get to order another batch of 80 F-15 upgraded models with some Super Tucanos for Nellis A.F.B. because that’s what is need to address the “threats” to our Democracy. Yeah, don’t ever forget about “Bringing Them Democracy” (C)(TM)
So if you know what’s good for you and America do not question our leaders at The Puzzle Palace or The Capitol. They know what is best for America, the World, and how to keep it safe. Well, sort of.
Besides it is not personal, just business. The biggest business*.
*And if you don’t shut up you can wind up in a dumpster in Mogadishu (Somalia not Minnesota).
Lets be honest shall we? The first quote in the article was the answer given by a general as to why the taxpayers should keep giving the air force any money when they cant get their house in order, to wit: “Asked by a reporter why taxpayers should keep giving the Pentagon roughly $700 billion a year if it can’t even “get their house in order and count ships right or buildings right,” Shanahan quipped, “We count ships right.”
That is laughable to begin with. That is like asking the burgler in ones home why the homeowner should “give” them the loot – The answer of course is that the “taxpayer” has no choice. We are REQUIRED to give that money or we GO TO PRISON. Even if we “refuse” by opting out of working enough hours to pay the damn taxes, the Federal Reserve keeps supporting larger deficits, which in turn reduce our existing money’s purchasing power. Either way, the money is going to be stolen.
Second, I will entertain the notion that all of this bureaucracy will cause accounting “anomalies” at the lower ranks. You know, the lower level accountants and auditors etc. However, I suspect very strongly that this level of complication at the upper levels is BY DESIGN. Remember 2008 and the CDO’s ? Those were complicated as to deceive. If it is simple, and everyone can understand it, there is little opportunity to blind the normal masses. Once you hear the terms – “oh it is so complicated, and we need a PHD or other credentialed person qualified to study it” You better believe someone, somewhere is stealing. Plain and simple.
Somehow, Fedex, UPS, hell, even the lowly USPS can track a package from point A to point B and give you a pretty accurate location at any given time for an item ordered. And it can do this for a large crate motor from MOPAR, to a small individual fitting for a BNC connector on a radio device. And, these are objects moved by disparate individual actors, NOT one organization which should have BETTER controls. Yet, the government tells me that somehow they cannot keep track of missiles, jets, spare parts for said devices, and even nuclear weapons parts? Bullshit.
It is just another example of robbery by those with the guns, of those that cannot defend themselves. Basically, armed robbery. All they are doing with this song and dance is keeping the masses placated. If that general was honest, he would have replied that the reason the “tax donkeys” should keep paying is that they have the guns. Period. /Rant over
I always figured people on the inside have figured out how to make money disappear into their pockets.
If you’ve never been in the military, you have no idea how bad it is. Even he money that can be accounted for is profiligately wasted. Its shameful. These contractors and vendors take us for a ride, bad. Don’t even get me started on “spend-down” that has to be done at the end of the fiscal year so everyone is out of money and begging for more. You can actually get in trouble for not spending your entire budget and asking for more. Thats right, people. You’d think a commander would be rewarded for completely the required mission/job and coming in under budget, but the opposite is true. I could do an entire post on this, but ill keep this short – anyone who tells you that the military couldn’t do pretty much everything it does now with 50% of its current budget is either woefulyl misinformed or lying to you.
Ahhh, another great story about our heroes at the MIC.
Yep , I sometimes take parts to military bases as a truck driver. Last month I took some tvs to a base in Kansas . If I remember correctly it call Lake ” something ” It’s where they make ammo for the military.Anyway no body could figure out who ordered what . After a few hours I was told they would just unload my truck and sort it out later. Now it probably wouldn’t be a big deal it just one tv but it was half a trailer of nice Jap TV’s worth thousands of dollars. Things like this has happened more then once to me. This is just a little example of the waste and corruption taking place everyday.
I saw lots of wasteful spending in the DOD. I spent some time in the Pentagon and that place was like a giant party. Outsiders have no idea what that place is like. You could literally live in there and never leave. They’ve got their own mini-hospital, gym, laundromat, dentist office, 2x banks, DMV, three separate food courts with at least 18 restaurants between them, including two McDonalds and two Dunkin Donuts, a separate sitdown restaurant, CVS, another 24 hour restaurant in the basement, a chocolate shop, a shopping hallway with at least three or four business spaces, including rotating businesses, like a My Pillow dealer or bedsheet retailer or ethnic black hat and tchochkie dealer, a souvenir shop, I think 2x separate snack shops, and God knows what else I’m forgetting. There is also their own massive library, which was kind of cool, where they host authors and lecturers. Oh, and there’s another restaurant in the 5 acre park in the center and a whole lot of Adirondack-style wooden chairs, which seemed kind of surreal to me. Relaxing out in the sun outside a cafe in the center of the pentagon during work just seemed odd.
The building is constantly hosting small celebrations and events, like defense contractor displays, similar to what you would see at a convention exhibitor floor, and there are events being put on for various stupid holidays and PC causes. Female whatever celebration, then Hispanic whatever celebration, then Green(renewable energy, not color) Fighting Vehicles celebration, etc. Plus, every month is some PC celebration, so it’s Female month, then Hispanic month, then Asian and Pacific Islander month, then Pride month, etc, complete with posters everywhere and events.
The hallways are bright and wide and painted. The executive wings are lined with nice wood trim. They’re called Mahogany Row, like over at DOS. I don’t remember what the wood actually was, but I wouldn’t be surprised if the wood was all veneered pine, or something. They spent a fortune to turn nearly every hallway into a museum, filled with paintings and historic displays, including floor-to-ceiling display cases with mannequins in uniforms commemorating WWII, WWI, the Civil War, War of 1812, Revolution, etc. Apparently, this was a big part of the remodeling in the 90s-2000s, because oldtimers told me the old pentagon was just dark and dingy.
The media has their own space, which I always thought was kind of disgusting. To me, letting the press permanently have their own offices in the building was akin to letting the North Koreans or the Russians have their own offices in the building. Talk about your opportunities for spying. I often saw Barbara Star in the halls. She looked like Jabba the Hut. I also saw Jennifer Griffin a lot. She always reminded me of The Walking Dead’s Carol. The other reporters and staff didn’t stick out much.
Due to the various individual organizations in the DOD and in the pentagon, there are various competing parallel offices doing the same thing. The decorated hallways I mentioned all fall under the various respective historical preservation offices of Army, Navy, Marines, USAF, as well as the SecDef. Each of which curates their own collections of stuff on display and spends a fortune on making their own thing. Nearly every hallway has a display and some are completely themed, like the ANZAC hallway, which is an entire hall of floor-to-ceiling photos of joint US-Australian-New Zealand events from 1908-2008, complete with display cases full of weapons, equipment, fake poppy flowers, photos of the Great White Fleet, etc. There’s a Bob Hope display, complete with OD uniform and golf club. There’s a hallway devoted to disaster aid, with scenes of flood and hurricane rescues. There’s a hallway devoted to the old pentagon, complete with simulated period offices from the 50s-60s, 70s-80s, old building infrastructure.
I think these parallel organizations all competing for space leads to some funny issues. For instance, as a high-profile place for all the services, every major command has to have representatives there. I walked into the office set aside for the Pacific Command once. It was an unmarked door in an A-ring hallway with space inside for at least six spacious desks and a private office in the back (had the nice blue carpet reserved for special people) for the general. A senior NCO was on duty in there, alone, and spent every day in there, alone, and never had visitors. The general rarely, if ever, traveled there and used the office. Imagine that- you’re entire job is to sit in a room alone, all day, every day, on the off-chance a VIP might visit and might need to sit in that office briefly before returning to his own office. That is your duty and what you are paid to do.
One of the funny stories I heard was about a work crew who were knocking down a wall for some office renovation and discovered an entire telephone exchange from the 1940s which had been sealed up and completely forgotten. The phone infrastructure was complete and intact, including a red line labeled to the white house. I wonder what else is lurking in the building?
Another funny story I heard was about a Navy LTC who had his Navy academy photo in his dress uniform framed and snuck into the building and mounted in a hallway among the other historic photos. He made up some kind of brass plate that listed him as Commander So-and-So, lost at sea in the 1800s. His photo survived for years before someone thought to ask why his hairdo appeared to be 1980s vintage and started an investigation resulting in the offending photo being officially removed. I tried to secure it for a friend of mine, but they wouldn’t budge.
The Army, in which I served, was full of wasteful spending. They made a lot of stupid decisions on procurement when I was there. For instance, the uniform changed multiple times through the 2000s. They dumped the woodland pattern BDUs, which were generally good for what they were. They were tough and reliable and they worked well for the most part. The ACU pattern they selected to replace the woodland BDUs was sexy at first, and everyone seemed to want it, but when it was actually issued, it turned out to be a stupid uniform. The fabric was so light and soft, it was like a pair of pajamas. The cargo pockets tore when you put things in them. The crotch blew out under actual field use. The pattern quickly faded and never recovered from dirt and grime. The velcro also didn’t hold up to use and was considered tactically stupid. The ACU pattern itself was insanely silly when you actually took it outside and tried to get it to blend with anything. I’ve read the USMC actually did a lot of research to come up with their MARPAT and it was originally designed with direct input from Scout Snipers. It looked like Army just came up with their own crappy knockoff pattern to seem relevant. USAF did it, too, with their retarded ACU-colors Tigerstripe pattern. Navy took the retardedness a couple steps further when they released a blue camoflage uniform. WTF? When do you need to blend in with the ocean? If you fall off the ship, I would think you want to be seen! Anyway, whenever the Navy actually went ashore, I saw them wearing whatever camo their host units were wearing, i.e. USMC or US Army. Worse yet, Army then realized their mistake and started using Crye Precision’s paisley camo pattern as an unofficial pattern in Trashcanistan. Later, they copied it and made their own knockoff uniform, which was issued alongside the ACU, creating 3x separate uniforms in use at the same time when we were supposed to only have 1 universal pattern: ACU, Desert, and Scorpion, or whatever they called their copycat Crye pattern. They also changed the class A and class B uniform, necessitating everyone change their scratchy greens for scratchy blues. I just heard they’re now dumping all that stuff for a new B and A uniform, the classic Pinks and Greens from the 1940s. I always liked the cut of that uniform, to be honest, and I hope it looks as good now as it did back then. I’m afraid it will end up getting cheaped-out by the contractors, but the original was a tight, professional uniform. If the Army, in my opinion, returned to the Brown Shoe days, it would be good for everyone.
I thought the black beret was retarded. No disrespect to SF and Rangers, but you can keep those things. I never understood why anyone would think wearing a shapeless wool bag on your head was a great idea and it hardly seemed like a mark of distinction and pride, especially when the entire Army stole the Rangers’ hat. I thought comfort and utility should have dictated the use of a patrol cap, not a stupid wool bag which offered no sun protection, focused the sun’s heat (practically all military bases are in hot, nasty places) on your head, and left your head with a strange Pokemon ball-like sunburn. I might not have seen the utility of the black beret, but I heard Shinseki liked it a lot, and I heard he steered the contract to produce the black berets for the entire Army to a factory owned by a relative of his.
I heard the DOD forced the Anthrax vaccine through the system, not because of the ever-present threat of Anthrax, but because many senior leaders were invested in the firm that was producing the vaccine, which was untested. The original formulation, I read, was tested in the 1970s and approved by the FDA, but the modern formulation was different from the original. I personally knew several people who claimed they had Gulf War Syndrome because of the vaccine. I managed to avoid it by using a little-known excuse I got from a medic- claim you’ve got eczema or psoriasis and you can avoid most mandatory vaccinations (there’s always an exception to blanket policies if you know how to find it).
I saw one captain who was the talk of the supply corps, because his books were so bad, he couldn’t account for hundreds of thousands of dollars of stuff. He had lost so much stuff, I don’t know how he could ever pay for it all. I know his supply NCOs must have robbed him blind. Everything went through their hands and they always got theirs first. You could spot the supply soldiers because they were kitted out with the latest weapons and gear, but you could see they weren’t door-kickers. A tubby 200 pound black female with a new FA-modified M4 rifle wasn’t fooling anyone. Speaking of robbery- the officers and NCOs running AAFES in the desert must have made a killing. Early on, when we were in the desert, big Army hadn’t quite arrived and the big AAFEs PX stores hadn’t been established, but small shoppettes were set up and run by the units, themselves. I don’t know how they were supplied, but you could get energy drinks, protein powder, jerkey, pork rinds, Maxim magazines, etc, like any AAFES shop would have. You could also buy cigarettes, but you could tell they were knockoff Marlboros with some kind of cheap floor sweepings inside. I grew up with Marlboros and I’ve lived in tobacco country- I know what that stuff should smell like and the Army-provided smokes were counterfeits. Somebody must have made a fortune on that deal.
The officers issuing the contracts overseas were also in a position to loot the system. In Iraq, if you visited the contractor cell, you would often find large boxes of baklava and candy and other treats. The Iraqis and other foreigners made a point to drop by with gifts. A friend of mine in security told me a new Major came to him with an envelope full of cash saying, “I just took over the contracting cell. This Iraqi guy handed me this envelope full of money. When I asked him what it was for, he told me the guy who used to be in charge took these all the time.” I don’t know if he ever figured out what to do with the money, or not, but I’m sure I could have found a use for it. I also met a soldier who claimed his two senior NCOs had stolen 40K$ from Iraqis and gotten away with it. When he threatened to report them, he claimed they tried to leave him in town on a patrol and then chaptered him out on a medical discharge, claiming he was suicidal. I don’t know if he was being honest, or not, but I did know the two NCOs in question had a reputation for being dirty.
Speaking of contractors- that’s one of the worst issues with the DOD. They have outsourced everything to contractors. They play racist contracting games, setting aside contracts for minority businesses, even if they have no ability to complete the contract or any experience in that field. They hire contractors to do work they already enlist soldiers to do, creating a parallel system where soldiers, say, water purification specialists, then have to work in parallel with former water purification specialists earning 5x their salary for the same job with less responsibility. Why would anyone stay in the military after completing their initial enlistment when they can immediately flip into contracting the same duties for more pay and no military nonsense? I knew guys who went from making 20-30K a year as NCOs to making 100-200K a year as contractors doing the same work. How do you keep them on the farm after they see that? In Iraq, they were so desperate for contractors, folks with fake resumes and non-existent bona fides were still being hired to fill the positions. The female contractors were worse- they were literally running brothels on the FOBs.
Oh- gotta add. Look up Fortress America by William Greider. He described the corruption in great detail after the Cold War. http://www.cnn.com/books/beginnings/9812/fortress.america/index.html His stories are disturbing nightmare fuel for people who care about these issues.
The pentagon was an interesting place to work. I saw a lot of interesting things while I was there. I was very proud to be there, despite my feelings about the corruption and wrongdoing I knew went on there. I don’t think the individuals who are there are actually responsible for the problems listed above and elsewhere. A lot of people don’t like how things work, but the system is a self-licking icecream cone that will exist and thrive no matter what they do. Read The Pentagon Wars for an idea of the endless crusades the DOD can endure and swallow whole. Many, if not most, of the people working there have a career they care about and making waves and calling attention to themselves is no way to promote that career. Nobody is likely to survive long by looking for and reporting corruption. The DOD has literally survived generations of reformers who washed up against its rocks and eventually flowed back out with the tide. I don’t think it will ever change, short of a real war with a real enemy where we have our asses handed to us and everyone wants to know what happened. Maybe an economic collapse, and the sudden lack of free money to pour into the DOD, will spur change? Congress will never do it. And we’ll never know enough to even demand it. And the military will never go against their best interests. It’s kind of sad, really, because a lot of good people have burned themselves out trying to do their best work and it just turns into shit.
As Gump said, “And that’s all I have to say about that…”
——————————-//——————————————-
Oh, and for the 9/11 truthers out there, I wasn’t there then, but I know people who were there that day and all the conspiracy stuff about no plane hitting and no bodies being there are absolute baloney. My coworker was off-duty when it happened, ran back to work, and waded into the wreckage to drag bodies and pieces of bodies out of it. One of his coworkers was on the fourth or fifth floor when the plane hit and was killed by flying debris thrown down the hallway at him. Another coworker of mine was in the basement when it hit, below the crash site and the fires. Thankfully, he was safe.
Spent several years in the 80s and 90s doing software for defense contractors, accounting, inventory, spare parts, and etc. The bogus accounting reaches back to times before Reagan. For all anyone I asked knew probably to WW2. The contractor got paid to do nearly the same work over & over for a several little portions of DoD all at the same time. We’d make half a dozen slightly different custom products that could have been done on Lotus spreadsheets or in Minitab or dBase-3 at the cost of a few $Million each. Maybe 20% of the cost was actually spent on a usable product, maybe 50% on giant binders of paper that no human ever looked at. About 30% paid the management to ply golf with the same govt. guys who set up the contract. Most of the spending is actually done by govt. guys with under 2 years to go until retirement. Usually they get a retirement job with one of the companies doing the ‘work’ and then go play golf with their old pals who had done the same thing jut a few years earlier. The whole thing was really more of an elaborate retirement system than anything for ‘defense’.