"Disposing of tanks, missiles and classified military equipment in a way that keeps it out of the hands of terrorists and rogue nations must be part of the mission of the U.S. military," Grassley said. "However, despite Pentagon promises dating back to 1972 that internal controls would be put in place against mislabeling and sloppy handling of surplus military parts, the DoD Inspector General has found half of the surplus items are mislabeled. As a result, the military depots which sell sensitive military hardware have become thriving terrorist flea markets. The Defense Department even maintains a world wide web home page to advertise military surplus for sale, and some of it is classified."
In addition, with the support of evidence presented at the oversight hearing, Grassley introduced an amendment to enhance the authority of federal law enforcement to target arms smugglers who traffick military surplus parts. The Grassley proposal would amend the national defense authorization bill for fiscal year 1998 under consideration this week by the full Senate. Grassley said his bill, which was endorsed by the U.S. Customs Service, would create a criminal statute for illegal exportations contrary to law. Currently, criminal law exists only against illegal import activity.
Grassley conducted today's hearing as Chairman of the Judiciary Subcommittee on Administrative Oversight and the Courts. It was through this panel that Grassley led his campaign during the 1980s against waste and fraud at the Pentagon, which resulted in 1985 in a freeze of that massive defense spending build-up. Today, the sale of surplus parts is overseen by a Pentagon office called the Defense Logistics Agency (DLA), which manages all supplies and equipment for the military. A former DLA investigator who testified at today's hearing noted that the most significant change in the disposal system in the past two decades is the ever-increasing level of military technology begin disposed.
"For years, the disposal facilities at our military bases were known as ?junk yards.' The end of the ?cold war' and the massive reductions in our Armed Forces which followed, flooded these with state-of-the-art military weapons systems, satellite communications equipment and sensitive military electronics, such as guidance components for sophisticated guided missiles and guidedbombs. Places once frequented only by legitimate scrap dealers and surplus buyers were suddenly being targeted by foreign governments, arms dealers and shady characters eager to make a buck," stated David Barrington, former investigator for the DLA.
Much of the surplus sold by the DoD requires specific types or levels of demilitarization by the surplus property dealers as a condition of sale. However, according to the U.S. Customs Service, officials have discovered through export examinations and subsequent seizures of numerous DoD surplus property shipments that many dealers fail to fulfill these requirements.
"Either the dealers of the subsequent purchases export or attempt to export this property without the required export license or the proper level of demilitarization of such property," said Bonni Tischler, Assistant Commissioner for the Office of Investigations at the Customs Service. Tischer testified that since 1990, the rate of compliance with DoD and U.S. munitions list requirements of examined shipments has been zero percent.
Grassley said that in January of this year, Secretary of Defense William Cohen testified during Senate confirmation hearings that the Pentagon currently has about $103 billion worth of materials stored in warehouses around the world, about half of which the DoD intends to dispose of by the year 2002. The Pentagon each year declares various kinds of military equipment, including attack helicopters, rocket launchers, computers for missiles, armored vehicles, and Stealth fighter parts, as unneeded or "surplus."
"Today's hearing demonstrates a cavalier attitude toward disposal of surplus equipment that existed a decade ago and that I also found in the acquisitions context during the 1980s. On the purchasing side of the equation, money goes into the Pentagon and then it goes out. Exactly where it goes isn't clear. And what happens to the money in the middle, between income and outlay, is not clear. So it isn't all that surprising that we have a parallel in the disposal context," Grassley said. "Beyond the waste of taxpayer dollars, it is critically important that the Pentagon get its house in order and prevent sensitive surplus military equipment from falling into the wrong hands."