The Pentagon’s Bottomless Money Pit
By Matt Taibbi
Sunday, March 17, 2019
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.
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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?
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.”
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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.
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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.
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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.”
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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.
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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.
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