The Pentagon Has Never Been Audited. That's Astonishing

By Thomas Hedges, Guardian UK

20 March 17

The president proposes a $52bn increase in military spending while reports of waste and abuse pile up. An investigation must scrutinise spending

n Thursday, Donald Trump released a preliminary budget proposal that calls for a $52bn increase in military spending. But just last December, a Washington Post investigation found that the Pentagon had buried a report that outlines $125bn in waste at the Department of Defense. That gap between lawmakers’ calls to blindly increase spending at DoD versus those of internal auditors to curtail its waste isn’t a new problem, and it’s one that, without pressure, won’t be resolved any time soon.

That’s because although it’s required to by law, the DoD has never had an audit, something every American person, every company and every other government agency is subject to. The result is an astounding $10tn in taxpayer money that has gone unaccounted for since 1996.

“Over the last 20 years, the Pentagon has broken every promise to Congress about when an audit would be completed,” the director of the Audit the Pentagon coalition, Rafael DeGennaro, told the Guardian. “Meanwhile, Congress has more than doubled the Pentagon’s budget.”

Legislation in the early 1990s demanded that all government agencies had annual audits, but the Pentagon has exempted itself without consequence for 20 years now, telling the Government Accountability Office (GAO) that collecting and organizing the required information for a full audit is too costly and time-consuming.

In the meantime, the GAO and Office of the Inspector General (IG) have published an endless stream of reports documenting financial mismanagement: $500m in aid to Yemen lost here, $5.8bn in supplies lost there, $8,000 spent on helicopter gears that really cost $500.

As reports and news articles about waste and abuse at the Pentagon pile up, prominent voices from across the political spectrum – from Bernie Sanders to Ted Cruz to Grover Norquist – are expressing support for a full audit of DoD. In a 2013 video message to the whole of the defense department, then secretary of defense Chuck Hagel told employees that the department’s non-compliance was “unacceptable”. During this past election cycle, both the Democratic and Republican platforms called for the Pentagon’s audit.

But despite broad support, the issue has remained stagnant in Washington. “I really can’t figure it out,” Democratic party representative for California Barbara Lee told the Guardian. When legislators get around to tackling waste, they “go after domestic agencies and community organizations, but they never go after the Pentagon,” she said. Since 2013, she has introduced bipartisan legislation that would financially penalize DoD for not receiving a clean audit.

“Quite frankly, they should have been audit-ready decades ago, after Congress passed the initial audit law in the early 90s,” Republican representative for Texas Michael Burgess, co-sponsor of the Audit the Pentagon Act along with Lee, told the Guardian. People have “accepted that the Department of Defense is expensive and that that’s how business has to be done. But I don’t accept that.”

Others say the problem goes beyond bureaucracy. William Hartung is the director of the Arms and Security Project at the Center for International Policy, and he says private contractors have found a way to make use of the Pentagon’s struggle to get its books in order. Contractors, he says, will “periodically intervene to try to stop practices that would make them more accountable”.

Specifically, the defense industry has sought to weaken the office of the director, operational test and evaluation (DOT&E) at the Department of Defense, which evaluates weapons systems before they’re manufactured on a larger scale. “It’s one of the few places that’s revealed a lot of problems,” says Hartung. The DOT&E, for example, has uncovered flaws in Lockheed Martin’s F-35 fighter jet program among a slew of other contracts. “The concept is: benefit from a dysfunctional system because they can charge however much they want and there’s not a lot of quality control,” says Hartung.

Another issue is the proximity between DoD and the private sector, something that appears to touch even the department’s inspector general’s office. In 2014, the Pentagon celebrated the Marine Corps’s success at being the first military agency to pass an audit. But a year later it was found that the private accounting firm hired to carry out the audit, Grant Thornton, had not been thorough. The Marine Corps had desperately wanted to achieve a “clean” status, due to pressure from then defense secretary Leon Panetta to get its books in order.

In a scathing response to the debacle, Republican senator for Iowa Chuck Grassley said that the actions of the DoD IG showed a “lack of independence and flagrant disregard for audit ethics”, calling the deputy IG for auditing “a Grant Thornton lapdog”.

Washington’s revolving door also touches the agency, with a number of high-profile individuals moving to the private sector after leaving their jobs, something that is perfectly within the law and government regulations.

In the end, Hartung says that the military’s stature and almost holy status make focusing on accountability difficult. If lobbying doesn’t work, he says, they can always “wrap themselves in the flag and say this is necessary for defense. But if people don’t poke into the details,” they won’t “find out that, in fact, not every penny being spent is sacrosanct”.