Policy
Written by Adam Andrejewski for RealClearInvestigations
Top line: On September 10, 2001, then-Secretary of Defense Donald Rumsfeld promised to end what he called “a matter of life and death”—billions of dollars in wasteful spending at the Pentagon and an unaccounted $2.3 trillion.
Rumsfeld's fight was short-lived. By the next day, on September 11, the Department of Defense had bigger things to worry about than wasteful spending.
So, what happened to Rumsfeld's declaration of financial war?
Key facts: At a press conference on September 10, Rumsfeld admitted that because of outdated technology and poor bookkeeping, Pentagon accountants had lost track of $2.3 trillion in taxpayer money. This was nearly a quarter of the United States' GDP at the time.
Money was spent, but no one could figure out what it was spent for. This could have been a huge national story if not for the events of the next day.
Rumsfeld likened the bureaucratic operations at the Pentagon to the Soviet Union in terms of the threat they posed to the United States. He also noted that the Department of Defense hired more workers than necessary and spent millions of dollars training employees who would remain in the service for only a few years.
Rumsfeld pledged to revolutionize accounting at the Pentagon, work with Congress to draft new legislation, and create a Defense Business Council to advise the Defense Department on financial matters.
background: Jim Mainieri of the Defense Finance and Accounting Service told CBS News in 2002 that few Pentagon employees seemed to care about millions of dollars in transactions missing from internal balance sheets. Officials simply manipulate the data to erase the missing funds, according to Mainieri.
“They have to cover it up,” Mainieri said. “This is where the corruption comes in. They have to cover up the fact that they can't do the job.
Even the Pentagon's attempts to fix its accounts ended up wasting money. Rolling Stone reported in 2019 that two different accountability initiatives at the Pentagon had been cancelled. Each cost more than $1 billion and took more than seven years to prepare, yet was never implemented.
In 2023, the Pentagon's accounting systems failed an internal audit for the sixth year in a row. That prompted Sens. Chuck Grassley (R-Iowa) and Bernie Sanders (R-Va.) to introduce the Pentagon Audit Act of 2023, which would force the Defense Department to give up part of its budget if it can't pass another audit.
Auditors at OpenTheBooks.com found that the Pentagon spent more than $56 billion on payroll in 2022. There were 24 employees who took home salaries of at least $300,000.
Critical quote: “From purchasing $14,000 worth of toilet seats to losing warehouses full of spare parts, the Department of Defense has suffered from wasteful spending for decades. Every dollar the Pentagon wastes is a dollar that is not used to support military service members, enhance national security, or enhance military readiness,” Grassley said. “The Department of Defense must meet the same annual audit standards as any other agency.”
summary: The Department of Defense has had a well-known financial problem for decades despite being one of the most expensive government departments. The concerns raised by Rumsfeld in 2001 have not yet been eliminated.
#WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.
Reprinted with permission from RealClearWire.
