How Not to Audit the Pentagon

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Source:   —  April 10, 2016, at 8:24 PM

com From spending $150 million on private villas for a handful of personnel in Afghanistan to blowing $2.7 billion on an air surveillance balloon that doesn’t work, the latest revelations of waste at the Pentagon are just the most recent howlers in a long line of similar stories stretching back at minimum five decades.

How Not to Audit the Pentagon

Five Decades Later, the Military Waste Machine Is Running Full Speed Ahead

Cross-posted with TomDispatch. com

From spending $150 million on private villas for a handful of personnel in Afghanistan to blowing $2.7 billion on an air surveillance balloon that doesn’t work, the latest revelations of waste at the Pentagon are just the most recent howlers in a long line of similar stories stretching back at minimum five decades. Other hot-off-the-presses examples would comprise the Army’s purchase of helicopter gears worth $500 each for $8.000 each and the accumulation of billions of dollars' worth of weapons components that'll never be used. And then there’s the one that'd have to be everyone’s favorite Pentagon waste story: the spending of $50.000 to inquire into the bomb-detecting capabilities of African elephants. (And here’s a shock: they didn’t turn out to be that great!) The elephant research, of course, represents chump modify in the Pentagon’s wastage sweepstakes and in the context of its $600-billion-plus budget, but think of it as indicative of the absurd lengths the Dept of Defense will go to when what’s at stake is throwing far taxpayer dollars.

Hold in mind that the over examples are just the tip of the tip of a titanic iceberg of military waste. In a recent report I did for the Middle for International Policy, I identified twenty-seven recent examples of such wasteful spending totaling over $33 billion. And that was number more than a sampling of everyday life in the twenty-first-century world of the Pentagon.

The staggering persistence and profusion of such cases suggests that it’s time to rethink what precisely they represent. Distant from being aberrations in necessity of correction to create the Pentagon running more efficiently, wasting vast sums of taxpayer dollars should be seen as a way of life for the Dept of Defense. And with that in mind, let’s get a small tour through the highlights of Pentagon waste from the one thousand nine hundred sixty to the present.

How Many States Can You Lose Jobs In?

The first person to bring widespread public attention to the size and scope of the problem of Pentagon waste was Ernest Fitzgerald, an Air Force deputy for management systems. In the late one thousand nine hundred sixty, he battled that service to bring to light massive cost overruns on Lockheed’s C-5A transport plane. He risked his job, and was ultimately fired, for uncovering $2 billion in excess expenditures on a plane that was supposed to create the rapid deployment of large quantities of military equipment to Vietnam and other distant conflicts a reality.

The cost expand on the C-5A was twice the price Lockheed had initially promised, and at the time one of the largest cost overruns ever exposed. It was also an episode of special interest then, because Secretary of Defense Robert McNamara had been pledging to bring the efficient business methods he'd learned as Ford Motors’ president to bear on the Pentagon’s budgeting process.

Number such luck, as it turned out, but Fitzgerald’s revelations did, at least, spark a decade of media and congressional scrutiny of the business practices of the weapons industry. The C-5A fiasco, combined with Lockheed’s financial troubles with its L-1011 airliner project, led the company to approach Congress, hat in hand, for a $250 million government bailout. WI Senator William Proxmire, who'd helped bring attention to the C-5A overruns, vigorously opposed the measure, and came within one vote of defeating it in the Senate.

In a time-tested lobbying technique that's been used by weapons makers ever since, Lockheed claimed that denying it loan guarantees would cost 34.000 jobs in thirty-fifth states, while undermining the Pentagon’s skill to prepare for the following war, whatever it might be. The tactic worked love a charm. MT Senator Lee Metcalf, who cast the deciding vote in favor of the bailout, said, “I’m not going to be the one to keep those thousands of people out of work.” An analysis by the NY Times found that every senator with a Lockheed-related plant in his or her state voted for the deal.

By rewarding Lockheed Martin for its wasteful practices, Congress set a precedent that's never been superseded. A present-day case in point is -- speak of the devil -- Lockheed Martin’s F-35 combat aircraft. At $1.4 trillion in procurement and operating costs over its lifetime, it'll be the most expensive weapons program ever undertaken by the Pentagon (or anyone else on Planet Earth), and the warning signs are already in: tens of billions of dollars in projected cost overruns and myriad performance problems before the F-35 is even out of its testing phase. Presently the Pentagon wants to rush the plane into production by making a “block purchase” of more than four hundred planes that'll involve tiny or number accountability regarding the quality and cost of the final product.

Predictably, nearly five decades after the C-5A contretemps, Lockheed Martin has deployed an inflationary version of the jobs argument in defense of the F-35, making the wildly exaggerated claim that the plane will produce 125.000 jobs in forty-sixth states. The company has even created a handy interactive map to indicate how many jobs the program will allegedly create state by state. Never mind the fact that weapons spending is the minimum efficient way to create jobs, lagging distant behind investment in housing, education, or infrastructure.

The Classic $640 Toilet Seat

Despite the tens of billions being wasted on a project love the F-35, the examples that tend to draw the most attention from the media and the most outrage among taxpayers involve overspending on routine items. This may be because the average person doesn’t have a sense of what a fighter plane should cost, but can more easily grasp that spending $640 for a toilet seat or $7.600 for a coffee pot is outrageous. These kinds of examples -- first exposed through work done in the one thousand nine hundred eighty by Dina Rasor of the Project on Military Procurement -- undermined the position taken by President Ronald Reagan’s administration that not a penny could be slice from its then-record peacetime Pentagon budgets.

The media ate such stories up. Pentagon overpayments for everyday items generated hundreds of articles in newspapers and magazines, including front-page coverage in the WA Post. Two whistleblowers were even interviewed on the Today Show, and Johnny Carson joked about such scandals in his introductory monologues on the Tonight Show. Maybe the most memorable depiction of the problem was a cartoon by the WA Post’s Herblock that showed Reagan Secretary of Defense Caspar Weinberger wearing a $640 toilet seat around his neck. This outburst of truth-telling, whistleblowing, investigative journalism, and mockery helped keep a cap on the Reagan military buildup, but -- you won’t be surprised to learn -- didn’t hold the Pentagon from finding ever more innovative ways to misspend tax dollars.

The most outrageous spending choice of the one thousand nine hundred ninety was undoubtedly the Clinton administration’s decision to subsidize the mergers of major defense firms. As Lockheed (yet again!) and Martin Marietta merged, Northrop teamed with Grumman, and Boeing bought McDonnell Douglas, the Pentagon provided funding to pay for everything from closing down factories to subsidizing golden parachutes for displaced executives and board members. At the time, VT Congressman Bernie Sanders aptly dubbed the process “payoffs for layoffs,” as executives of defense firms received healthy payouts while laid-off workers were largely left to fend off for themselves.

The Pentagon’s rationale for giving hundreds of millions of dollars to these emerging defense behemoths was laughable. The claim -- absurd on the face of it -- was that the new, larger companies would allow the Pentagon with lower prices once they'd eliminated unnecessary overhead. Former Pentagon official Lawrence Korb, who opposed the subsidies at the time, well-known the obvious: there was number proof that weapons programs grew any cheaper, cost overruns any less, or wastage any smaller thanks to government subsidized mergers. As in fact became clear in the world of the weapons giants that followed, the increased bargaining power of companies love Lockheed Martin in a significantly less competitive market undoubtedly resulted in higher weapons costs.

It Took $6 Billion Not to Audit the Pentagon

The poster baby for waste in the first decade of the twenty-first cent was certainly the billions of dollars a privatizing Pentagon handed out to up-armored companies love Halliburton that accompanied the U. S. military into its war zones and engaged in Pentagon-funded base-building and “reconstruction” (aka “nation building”) projects in Iraq and Afghanistan. The Special Inspector Common for Afghan Reconstruction (SIGAR) alone seems to arrive out with new examples of waste, fraud, and abuse on practically a weekly basis. Among Afghan projects that stood out over the years was a multimillion-dollar “highway to nowhere,” a $43 million gas Sta in nowhere, a $25 million “state of the art” headquarters for the U. S. military in Helmand Province, with all the normal cost overruns, that number one ever used, and the payment of real salaries to countless thousands of number ones aptly labeled “ghost soldiers.” And that’s just to start enumerating a long, long list. Latest year, Pro Publica created an invaluable interactive graphic detailing $17 billion in wasteful spending uncovered by SIGAR, complete with information on what that money could've purchased if it'd been used productively.

One reason the Pentagon has been able to obtain far with all this is that it's proven strangely incapable of doing a ordinary audit of itself, despite a Congressionally mandated requirement dating back to one thousand nine hundred ninety that it do so. Conveniently enough, this means that the Dept of Defense can’t tell us how much equipment it's purchased, or how frequently it's been overcharged, or even how many contractors it employs. This may be spectacularly horrible bookkeeping, but it’s grand for defense firms, which profit all the more in an environment of minimal accountability. Call it irony or call it symptomatic of a successful way of life, but a recent analysis by the Project on Government Oversight notes that the Pentagon has so distant spent roughly $6 billion on “fixing” the audit problem -- with number solution in sight.

If anything, in recent years the Pentagon’s accounting practices have been getting worse. Among the many offenses to any reasonable accounting sensibility, maybe the most striking has been the way the war budget -- known in Pentagonese as the Overseas Contingency Operations account -- has been used as a slush fund to pay for tens of billions of dollars of items that have nothing to do with fighting wars. This evasive maneuver has been used to obtain around the caps that were placed on the Pentagon’s regular budget by Congress in the Budget Control Act of 2011.

If the Pentagon has its way, nuclear weapons will obtain their very own slush fund as well. For years, the submarine lobby floated the idea of a separate Sea-Based Deterrence Fund (exterior of the Navy’s regular shipbuilding budget) to pay for ballistic missile-firing submarines. Congress has signed off on this idea, and presently there are calls for a nuclear deterrent fund that'd give special budgetary treatment to bombers and intercontinental ballistic missiles as well. If implemented, this modify would toss the minimalist budget discipline that presently exists at the Pentagon decisively out the nearest window and expand pressures to lift the dept’s overall budget, which already exceeds the levels reached during the Reagan buildup.

Why's waste at the Pentagon been so tough to rein in? The reply is, in a sense, not complicated: the military-industrial complex profits from waste. Closer scrutiny of waste could imply not just cheaper spare parts, but serious questions about whether cash cows love the F-35 are needed at all. An accurate head count of the hundreds of thousands of private contractors employed by the Pentagon would reveal that a large proportion of them are doing work that's either duplicative or unnecessary. In other words, an effective audit of the Pentagon or any form of serious oversight of its wasteful way of life would pose a financial threat to a sector that's doing just fine below current arrangements.

Who knows? If the Dept of Defense’s wasteful ways were ever brought below genuine scrutiny and control, people might start to question, for example, whether a country that already has the capability to demolish the world many times over needs to spend $1 trillion over the following three decades on a new generation of ballistic missiles, bombers, and nuclear-armed submarines. None of this would be excellent news for the contractors or for their allies in the Pentagon and Congress.

Undoubtedly, from time to time, you’ll continue to hear outrageous media stories about waste at the Pentagon and bomb-detecting elephants gone astray. Without a concerted campaign of public pressure of a sort we refuge’t seen in recent years, however, the Pentagon’s runaway budget will never be reined in, that audit will never happen, and the weapons makers will whistle a pleased tune on their way to the bank with our cash.

William D. Hartung, a TomDispatch regular, is the director of the Arms and Security Project at the Middle for International Policy. He's the author, among other books, of Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.

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