Multiple presidents, Pentagon chiefs and members of Congress have tried to figure out what happens to the boatloads of money that go to the Defense Department, the largest federal agency.
President Bill Clinton launched an initiative in the late 1990s to get a better handle on where military funding ends up. His administration’s top auditors looked at $7 trillion in expenditures over a number of years, but they couldn’t find documentation for where $2.3 trillion of the transactions went. They abandoned the effort.
A few years later, on the eve of the Sept. 11, 2001, attacks, Defense Secretary Donald Rumsfeld made a bristling attack on Pentagon waste and vowed to get on top of it.
“In this building, despite the era of scarce resources taxed by mounting threats, money disappears into duplicative duties and bloated bureaucracy – not because of greed, but gridlock,” Rumsfeld said. “Innovation is stifled – not by ill intent, but by institutional inertia.”
The problems have only worsened. Pentagon spending exploded during the post-9/11 wars in Afghanistan and Iraq, which yielded fresh reports of billions gone astray to contractors ostensibly rebuilding the two countries amid continuing violence.
As U.S. involvement in the wars wind down, the last defense secretary, Leon Panetta, and the current one, Chuck Hagel, have waged yet another offensive to get on top of the money.
The problem extends to Capitol Hill. With defense contractors providing tens of thousands of jobs in every state and virtually every House district across the country, lawmakers have failed to identify spending cuts as required by their own budget bills.
As a result, the Pentagon is facing broad, forced cuts under a “sequestration” system that most lawmakers never intended to take effect.
Hagel says those forced reductions threaten to weaken U.S. military power and harm force readiness. How accurate that warning is becomes difficult to assess without being able to understand the Pentagon’s ledgers.
Yet, the Defense Department is years behind schedule in meeting a 1990 congressional mandate to submit its financial records to an outside accounting firm for an audit.
The Pentagon has missed a number of previously promised dates to make its books “audit ready.”
The new target is 2017. Few analysts expect it to make that deadline.