Provocative1
The Pentagon Misplaces Trillions of Dollars????
Fri Jul 9, 2004 19:23
64.12.116.205


Pentagon "misplaces" $2.3 trillion

"According to some estimates we cannot track $2.3 trillion in transactions."
(Donald Rumsfeld, quoted on CBS News, 29/1/02)

Rumsfeld admitted that the Pentagon misplaced $2.3 trillion. This money has disappeared – nobody knows where it's gone. Government officials have blamed the accounting systems – the US Department of Defense has failed to produce independently audited accounts since 1995.

See the full CBS News story:
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml
(Note: the full CBS text is also given below)



US Department of Defense confirms trillions "loss"

The $2.3 trillion figure is confirmed in the following DoD documents (which include transcripts of testimony before the House Budget Committee and a speech by Rumsfeld):

http://www.defenselink.mil/news/Apr2002/n04032002_200204033.html
http://www.defenselink.mil/speeches/2001/s20010910-secdef.html
http://www.defenselink.mil/news/Feb2002/n02202002_200202201.html
http://www.defenselink.mil/speeches/2001/s20010711-depsecdef2.html

For related details see:
http://www.anxietyculture.com/bulletin030903.htm




CBS News story 29/1/02: The War on Waste

(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.

"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."

(From: http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.

Data Nightmare At Pentagon


'If You Ran Your Business This Way, You'd Be In Jail'


By Noah Shachtman
Wired News
7-9-4

http://www.rense.com/general54/data.htm

They've been trying for more than a decade. They've built more than 2,000 databases to do the job. They're spending nearly $19 billion a year. But, despite all that effort, Defense Department officials still haven't come up with a way to track the Pentagon's supplies, finances or people, according to a new congressional report.

Instead, America's armed forces are using a tangle of duplicative, isolated and often outdated computer systems to keep tabs on their assets. And they're not doing it particularly well. These "fundamentally flawed business systems" are leaving the Pentagon wide open to "fraud, waste and abuse," the General Accounting Office, Congress' investigatory arm, notes in its report. And they're making soldiers' lives a whole lot more difficult in the process.

Some outside analysts see the inefficiency as an unfortunate but necessary consequence of the Pentagon's enormous commitments and largely successful track record. But others think the Defense Department could handle its operations a whole lot better.

"If you ran your business this way, you'd be in jail," said Christopher Hellman, an analyst with the Center for Arms Control and Non-Proliferation.

The Pentagon this year asked Congress for a record budget -- over $400 billion. And that doesn't take into account many of the operations in Iraq and Afghanistan. But the Defense Department's databases are so screwed up, "they can't even tell us how or why our money's being spent," Hellman added.

The Pentagon says it has 2,274 systems for staying on top of everything from its supply of uniforms to its health-care costs. That includes 311 personnel databases in the Army alone and 276 financial systems just for the Navy.

But it's all just a best guess. The Defense Department's comptroller "recently acknowledged that the actual number of business systems could be twice as many as previously reported," the congressional report notes.

The overlap and inefficiency can often have amusing results, the GAO observes. Because the Pentagon couldn't keep track of its equipment, it wound up buying its latest chemical and biological protective suits for $200 each -- and then selling them on the Internet for $3 a pop.
But to National Guardsmen on the front lines, the mix-ups haven't been much to smile about. Out of the 481 mobilized Army National Guard soldiers tracked by the GAO, "450 had at least one pay problem associated with their mobilization," according to the report. The Department of Defense's "inability to provide timely and accurate payments to these soldiers, many of whom risked their lives in recent Iraq or Afghanistan missions, distracted them from their missions, (and) imposed financial hardships on the soldiers and their families."

Meanwhile, defense contractors have used the Pentagon's confusion to get fat. The GAO accused these firms of "abusing the federal tax system with little or no consequence." The Defense Department is supposed to dock companies' pay if they don't give what they owe to the IRS. "However, we found that DOD had collected only $687,000 of unpaid taxes as of September 2003. We estimated that at least $100 million could be collected annually," the report notes.

Pentagon officials say they're making improvements. Under an old inventory system, it took about 12 hours to pass along an order, notes Allan Banghart, director of enterprise transformation for the Defense Logistics Agency. "Today we routinely complete this function in less than 40 minutes."

But Jim Lewis, with the Center for Strategic and International Studies, said the Defense Department shouldn't try to be that lean. Pleasing the bean counters is nice. But the Pentagon's job is to win wars. And it's a whole lot larger than any company.

"The Pentagon is bigger than 90 percent of most countries. So if you compare them to, say, Rwanda or China or Mexico or Peru, this is not a bad record," he notes. "All militaries are inefficient. All governments are inefficient. The question is, 'Who is less inefficient?'"

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