Op-Ed: How not to audit the Pentagon

One hundred and fifty million dollars for private villas in Afghanistan, $2.7 billion for an air surveillance balloon that doesn’t work; $8,000 for a single helicopter part that really costs $500; $50,000 to investigate the iffy bomb-detecting capabilities of African elephants. These are just a few of the ways the Pentagon has found to misuse vast sums of taxpayer money.

In February the Center for International Policy released my report identifying 27 instances of outrageous military spending since President Obama took office. It totaled more than $33 billion of waste. The staggering persistence and profusion of such extravagance suggests that it’s time to rethink exactly what it represents. Far from being a mere aberration in need of correction, this is a way of life for the Department of Defense.

Let’s take a little tour through the highlights of Pentagon spending stretching back five decades.

The first person to bring widespread public attention to the Pentagon’s money management problems was Ernest Fitzgerald, an Air Force deputy for management systems. In the late 1960s, 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 the troubled transport. But at least his courageous revelations sparked congressional scrutiny and saved taxpayers hundreds of millions of dollars when Lockheed was forced to shoulder some of the burden of the overruns.

Still, Lockheed didn’t mend its ways. The C-5A problems, combined with a troubled airliner project, led the company to approach Congress, hat in hand, for a $250-million bailout. Lockheed’s leaders cannily claimed that denying the loan guarantees would cost 34,000 jobs in 35 states. The tactic worked like a charm. As Montana Sen. Lee Metcalf, who cast the deciding vote in favor of the bailout, said, “I’m not going to be the one to put those thousands of people out of work.”

By rewarding Lockheed Martin for its wasteful practices, Congress set a precedent that has never been superseded.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 will 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. Nevertheless, the Pentagon wants to rush the plane into production. Predictably, Lockheed Martin has deployed a wildly exaggerated claim that the F-35 will produce 125,000 jobs in 46 states. Based on standard estimating methods, the real number is more like 50,000.

Perhaps because the average person doesn’t have a sense of what fighter planes should cost, the billions lavished on them don’t draw as much attention as a $640 toilet seat or $7,600 coffee pot. These kinds of Pentagon outlays — first exposed through work done by Dina Rasor of the Project on Military Procurement in the 1980s — undermined President Reagan’s position that not a penny could be cut in a then-record peacetime Defense budget. But that didn’t stop the waste.

In the 1990s, the most egregious example 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 for everything from closing down factories to inflating the golden parachutes of displaced executives.

The Pentagon’s rationale for the spending was laughable: The new, larger companies would lower their prices once they had eliminated unnecessary overhead. In fact, the increased bargaining power of the weapons giants, and a significantly less competitive market, instead resulted in higher costs.

Again, media and congressional outrage had an impact. An amendment by then-Rep. Bernie Sanders (I-Vt.) cut back the portion of the subsidies that went to pay for executive bonuses. And criticism of the deals helped strengthen the backbone of the Clinton administration when it vetoed what would have been the largest merger of all, a proposed combination of Lockheed Martin and Northrop Grumman.

Since the Sept. 11 attacks, companies such as Halliburton, hired by the privatizing Pentagon to tackle “nation-building” projects in Iraq and Afghanistan, have been responsible for some of the worst instances of military waste. Among a long, long list of Afghanistan horror stories: a multimillion-dollar “highway to nowhere,” a $4- million gas station, a $25-million headquarters for the U.S. military in Helmand province that no one ever used, and the payment of salaries to nonexistent “ghost soldiers.”

One reason the Pentagon has been able to get away with all this is that it has proved strangely incapable of doing a simple audit of itself. The Department of Defense can’t tell us how much equipment it has purchased, how often it has been overcharged, or even how many contractors it employs. Call it irony or call it symptomatic of the department’s way of life, but an analysis by the Project on Government Oversight notes the Pentagon has so far spent roughly $6 billion on “fixing” the audit problem — with no solution in sight.

If anything, the Defense Department’s accounting practices have been getting worse.

Perhaps the most striking instance is 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 allows the military to get around caps placed on the Pentagon’s regular budget by Congress in the Budget Control Act of 2011.

The reason the waste continues isn’t complicated: A lot of people are profiting. Closer scrutiny would mean not just cheaper spare parts for fighter jets, but also serious questions about the whole enterprise. Should a country that already possesses massive nuclear overkill spend $1 trillion over the next three decades on a new generation of nuclear bombers, missiles and submarines? Is the F-35 needed at all? In other words, an effective audit of the Pentagon would pose a financial threat to a sector that is doing spectacularly well under current arrangements.

On its own, the Pentagon will never stop funding bomb-detecting elephants and overpaying for helicopter gears. Without a concerted campaign of public pressure like the ones sparked by Fitzgerald’s revelations 50 years ago, or the toilet seat scandals of the 1980s, the Pentagon’s big-spending way of life will never be reined in.

William D. Hartung, director of the Arms and Security Project at the Center for International Policy, is the author of “Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.” A longer version of this piece appears at TomDispatch.com.

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