Here is some information from DAILY KOS
The War On Waste
Defense Department Cannot Account For 25% Of Funds — $2.3 Trillion
(CBS) On Sept. 10, Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, “the adversary’s closer to home. It’s the Pentagon bureaucracy,” he said. He said money wasted by the military poses a serious threat. “In fact, it could be said it’s a matter of life and death,” he said.
Rumsfeld promised change but the next day – Sept. 11– the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten. Just last week President Bush announced, “my 2003 budget calls for more than $48 billion in new defense spending.”
More money for the Pentagon, CBS News Correspondent Vince Gonzales reports, while its own auditors admit the military cannot account for 25 percent of what it spends.
“According to some estimates we cannot track $2.3 trillion in transactions,” Rumsfeld admitted. $2.3 trillion — that’s $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.
“We know it’s gone. But we don’t know what they spent it on,” said Jim Minnery, Defense Finance and Accounting Service. Minnery, a former Marine turned whistle-blower, is risking his job by speaking out for the first time about the millions he noticed were missing from one defense agency’s balance sheets. Minnery tried to follow the money trail, even crisscrossing the country looking for records.
“The director looked at me and said ‘Why do you care about this stuff?’ It took me aback, you know? My supervisor asking me why I care about doing a good job,” said Minnery. He was reassigned and says officials then covered up the problem by just writing it off.
“They have to cover it up,” he said. “That’s where the corruption comes in. They have to cover up the fact that they can’t do the job.”
The Pentagon’s Inspector General “partially substantiated” several of Minnery’s allegations but could not prove officials tried “to manipulate the financial statements.”
Twenty years ago, Department of Defense Analyst Franklin C. Spinney made headlines exposing what he calls the “accounting games.” He’s still there, and although he does not speak for the Pentagon, he believes the problem has gotten worse.
“Those numbers are pie in the sky. The books are cooked routinely year after year,” he said. Another critic of Pentagon waste, Retired Vice Admiral Jack Shanahan, commanded the Navy’s 2nd Fleet the first time Donald Rumsfeld served as Defense Secretary, in 1976.
In his opinion, “With good financial oversight we could find $48 billion in loose change in that building, without having to hit the taxpayers.”
And from Bernie Sanders recent article on just how ‘things really work’ in the Pentagon and Department of Defense:
The Pentagon’s procurement and budgeting processes are rife with problems. For example, the Government Accountability Office has identified $295 billion in cost overruns on 72 major weapons systems, even as the Pentagon can’t balance its books or keep track of its vast inventory. These problems can lead to bizarre results, such as the fact that the Pentagon has hundreds of millions of dollars in spare parts now on order that are already marked for disposal. Despite huge cost overruns, major contractors have received $8 billion in performance bonuses that have been paid out regardless of the results of their work. These abuses of the public trust — and the public purse — are simply unacceptable.
These are complex problems that will require multifaceted solutions. A good way to start would be by slowing down the “revolving door” that allows high-level Pentagon bureaucrats and military officers to go to work for major defense contractors.
The problems with the revolving door are twofold. First, officials looking forward to employment in the arms industry may favor certain companies in hopes of getting lucrative job offers after leaving government service. Second, once they have moved into the private sector, these former government employees can use their specialized knowledge and inside contacts to give an unfair advantage to their new employer.
These are far from abstract problems. In one high-profile case, Darleen Druyun, a senior Air Force contracting official, secured jobs with the Boeing Corp. for herself, her daughter and her son-in-law at the same time that she was in charge of negotiating a $20 billion lease deal with the company. Both Druyun and Boeing’s chief financial officer pled guilty to fraud charges and served jail time as a result.
The Boeing scandal was uncovered in time to save the taxpayers from a corrupt employment deal, but how many other scandals go undetected? In a study released this week, GAO reported that as of 2006, some 2,435 former generals, admirals, procurement officials and senior civilian leaders in the Pentagon were working in the defense industry. GAO believes that more than 400 of these were working on defense contracts related to their former agencies, but under current reporting requirements, there is no way to tell whether these individuals have conflicts of interest. That is because neither the contractors nor Pentagon officials are required to report on the post-government employment of key military and civilian government personnel.