More than $6 billion in Iraq reconstruction funds lost By Liz Goodwin
The Iraqi and U.S. governments have been unable to account for a substantial chunk of the billions of dollars in reconstruction aid the Bush administration literally airlifted into the country. If the cash proves to have been stolen, the heist could represent "the largest theft of funds in national history," according to a report in the Los Angeles Times.
The Times' description of how the billions of dollars entered the country is a must-read:
Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.
Special inspector general for Iraqi reconstruction Stuart Bowen told the paper the missing $6.6 billion may be "the largest theft of funds in national history."
Iraqi officials say it was the U.S. government's job to keep track of the funds, which were brought in as an emergency measure to keep basic infrastructure going after Saddam Hussein's ouster. House Government Reform Committee investigators found in 2005 evidence of "substantial waste, fraud and abuse in the actual spending and disbursement of the Iraqi funds."
Witnesses testified that millions of dollars were shoved into "gunnysacks" and disbursed to Iraqi contractors on pick-up trucks, with what seemed to be little financial controls or accounting on the part of the U.S. government.
Old news. I remember seeing stories about this in the mid-2000's. Why the story couldn't gain traction and was omitted from the narrative back then I have no idea.
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03:26 PM
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
Originally posted by JazzMan: Old news. I remember seeing stories about this in the mid-2000's. Why the story couldn't gain traction and was omitted from the narrative back then I have no idea.
back then it was treason to speak such things.
the simple search for "pentagon waste" spouts forth almost as many results as a Pron search.....
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03:37 PM
84fiero123 Member
Posts: 29950 From: farmington, maine usa Registered: Oct 2004
And the outrage from the fiscal conservatives is deafening.
Oh wait, who was signing the checks back then? Oh yeah, that's right...
No wonder...
When you're busy bribing people and buying off your "might-be-enemies", you DON"T keep records. We learned that from Al Capone, for goodness' sake! All the so-called-friends we were buying don't want to be outed by WikiLeaks, now do they?
We are talking about Iraq, right? For a minute I got confused about all the "Billions wasted and unaccounted for" by TARP, GM Bailout, Wall Street, etc. There are so MANY Billion-Dollar Sinkholes that I have trouble keeping them straight. I'm suffering "Outrage Fatigue"!
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05:56 PM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
And the outrage from the fiscal conservatives is deafening.
Oh wait, who was signing the checks back then? Oh yeah, that's right...
No wonder...
I was prepping my deliveries and running to the Post Office and FedEx. Sorry I didn't chime in before the buzzer you set.
I have long stated that ours is the most wasteful, corrupt and inept government that has ever existed since there was such a thing. And it only got worse with the present crooks who occupy the throne.
Sorry if my response was late and not up to your standards.
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06:13 PM
PFF
System Bot
madcurl Member
Posts: 21401 From: In a Van down by the Kern River Registered: Jul 2003
Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.
Witnesses testified that millions of dollars were shoved into "gunnysacks" and disbursed to Iraqi contractors on pick-up trucks, with what seemed to be little financial controls or accounting on the part of the U.S. government.
What a shock. People who are getting shot at and mortared didn't keep good accounting practices and track the money that was being spent. I have no doubt that the vast majority of that money was indeed spent on reconstruction. There likely was fraud and abuse as can be expected in a war zone.
If the Iraqis want to demand the US pay for the missing funds, then how about we give them their $6 billion after they pay us for the entire cost of the war and ongoing efforts to keep their country stable.
If the Iraqis want to demand the US pay for the missing funds, then how about we give them their $6 billion after they pay us for the entire cost of the war and ongoing efforts to keep their country stable.
Right. My bad. Now I remember hearing about this. It was that OTHER money. The money that came from the space aliens who beamed it into the White House basement.......
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08:17 PM
Doug85GT Member
Posts: 9825 From: Sacramento CA USA Registered: May 2003
Right. My bad. Now I remember hearing about this. It was that OTHER money. The money that came from the space aliens who beamed it into the White House basement.......
LOL. Nope, the money did not come from space aliens either.
This is a clear case of poor news reporting. That story gives the clear impression that this was tax payer money. It was not.
Try reading the same story only with more details:
Even in that story, they bury the fact that this was NOT tax payer money in the middle of the story. That one fact clearly can change the outlook that people have on the story yet it is in the middle of this story and isn't even mentioned in the Yahoo article.
Since the Yahoo article is severely lacking IMO, here is the LA Times article. I added the emphasis to some critical missing items from the Yahoo article:
quote
Missing Iraq money may have been stolen, auditors say
U.S. Defense officials still cannot say what happened to $6.6 billion, sent by the planeload in cash and intended for Iraq's reconstruction after the start of the war.
By Paul Richter, Los Angeles Times
June 13, 2011
Reporting from Washington
After the U.S.-led invasion of Iraq in March 2003, the George W. Bush administration flooded the conquered country with so much cash to pay for reconstruction and other projects in the first year that a new unit of measurement was born.
Pentagon officials determined that one giant C-130 Hercules cargo plane could carry $2.4 billion in shrink-wrapped bricks of $100 bills. They sent an initial full planeload of cash, followed by 20 other flights to Iraq by May 2004 in a $12-billion haul that U.S. officials believe to be the biggest international cash airlift of all time.
This month, the Pentagon and the Iraqi government are finally closing the books on the program that handled all those Benjamins. But despite years of audits and investigations, U.S. Defense officials still cannot say what happened to $6.6 billion in cash — enough to run the Los Angeles Unified School District or the Chicago Public Schools for a year, among many other things.
For the first time, federal auditors are suggesting that some or all of the cash may have been stolen, not just mislaid in an accounting error. Stuart Bowen, special inspector general for Iraq reconstruction, an office created by Congress, said the missing $6.6 billion may be "the largest theft of funds in national history."
The mystery is a growing embarrassment to the Pentagon, and an irritant to Washington's relations with Baghdad. Iraqi officials are threatening to go to court to reclaim the money, which came from Iraqi oil sales, seized Iraqi assets and surplus funds from the United Nations' oil-for-food program.
It's fair to say that Congress, which has already shelled out $61 billion of U.S. taxpayer money for similar reconstruction and development projects in Iraq, is none too thrilled either.
"Congress is not looking forward to having to spend billions of our money to make up for billions of their money that we can't account for, and can't seem to find," said Rep. Henry A. Waxman (D-Beverly Hills), who presided over hearings on waste, fraud and abuse in Iraq six years ago when he headed the House Government Reform Committee.
Theft of such a staggering sum might seem unlikely, but U.S. officials aren't ruling it out. Some U.S. contractors were accused of siphoning off tens of millions in kickbacks and graft during the post-invasion period, especially in its chaotic early days. But Iraqi officials were viewed as prime offenders.
The U.S. cash airlift was a desperation measure, organized when the Bush administration was eager to restore government services and a shattered economy to give Iraqis confidence that the new order would be a drastic improvement on Saddam Hussein's Iraq.
The White House decided to use the money in the so-called Development Fund for Iraq, which was created by the Federal Reserve Bank of New York to hold money amassed during the years when Hussein's regime was under crippling economic and trade sanctions.
The cash was carried by tractor-trailer trucks from the fortress-like Federal Reserve currency repository in East Rutherford, N.J., to Andrews Air Force Base in Maryland, then flown to Baghdad. U.S. officials there stored the hoard in a basement vault at one of Hussein's former palaces, and at U.S. military bases, and eventually distributed the money to Iraqi ministries and contractors.
But U.S. officials often didn't have time or staff to keep strict financial controls. Millions of dollars were stuffed in gunnysacks and hauled on pickups to Iraqi agencies or contractors, officials have testified.
House Government Reform Committee investigators charged in 2005 that U.S. officials "used virtually no financial controls to account for these enormous cash withdrawals once they arrived in Iraq, and there is evidence of substantial waste, fraud and abuse in the actual spending and disbursement of the Iraqi funds."
Pentagon officials have contended for the last six years that they could account for the money if given enough time to track down the records. But repeated attempts to find the documentation, or better yet the cash, were fruitless.
Iraqi officials argue that the U.S. government was supposed to safeguard the stash under a 2004 legal agreement it signed with Iraq. That makes Washington responsible, they say.
Abdul Basit Turki Saeed, Iraq's chief auditor and president of the Iraqi Board of Supreme Audit, has warned U.S. officials that his government will go to court if necessary to recoup the missing money.
"Clearly Iraq has an interest in looking after its assets and protecting them," said Samir Sumaidaie, Iraq's ambassador to the United States.
Right. My bad. Now I remember hearing about this. It was that OTHER money. The money that came from the space aliens who beamed it into the White House basement.......
What you are talking about must be the Obama stash that that lady right after the election said she was going to get some of. Wonder if she knew the wait time was FOREVER.
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09:43 PM
Jun 14th, 2011
chriswf Member
Posts: 406 From: Plano, Texas Registered: Jan 2011
Any way to know how much money everyone (me) would get if you divided that 6 billion up between everyone who makes under 100k$ and pays taxes(has a job)? Even if it was like, 10$ I'd be happy.
The census says 15% of households make over 100k. Sooo, that'd be 85% left. 235,871,704(census of employment)*.85 = 200,490,948 Right? So... 6,000,000,000 / 200,490,948 = 29.92. Is that right? I WANT MY 30$ BACK!!! I can go to Taco Bell 10 times with that money!
Darn. I missed the outrage window because I was at work.
Not really. You knew about the billions being wasted, but had no problem because it was being wasted by someone you liked and followed. That six billion dollars would have paid for a lot of infrastructure improvements in this country, or hired a bunch of teachers and built schools here on home soil, or kept libraries open so our kids could learn, etc, but it got sucked right out of this economy and squandered, frittered away with nothing to show for it on homeland soil.
Last I checked, getting nothing for something wasn't the way it was supposed to work...
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10:53 AM
Doug85GT Member
Posts: 9825 From: Sacramento CA USA Registered: May 2003
Not really. You knew about the billions being wasted, but had no problem because it was being wasted by someone you liked and followed. That six billion dollars would have paid for a lot of infrastructure improvements in this country, or hired a bunch of teachers and built schools here on home soil, or kept libraries open so our kids could learn, etc, but it got sucked right out of this economy and squandered, frittered away with nothing to show for it on homeland soil.
Last I checked, getting nothing for something wasn't the way it was supposed to work...
I know a lot of people see a big pile of money and assume they can just take it to spend on anything they want. But in this case, none of that money was going to be spent on American soil anyway. It was not American money.
That six billion dollars would have paid for a lot of infrastructure improvements in this country, or hired a bunch of teachers and built schools here on home soil, or kept libraries open so our kids could learn, etc, but it got sucked right out of this economy and squandered, frittered away with nothing to show for it on homeland soil.
Last I checked, getting nothing for something wasn't the way it was supposed to work...
The 860 billion stimulus was supposed to go for "shovel ready projects", even Obama admitted it was a failure the other day. Commenting that those project weren't as shovel ready as they thought. Talk about getting nothing for a ton of debt. We need more of the same?
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03:21 PM
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
Originally posted by partfiero: The 860 billion stimulus was supposed to go for "shovel ready projects", even Obama admitted it was a failure the other day. Commenting that those project weren't as shovel ready as they thought. Talk about getting nothing for a ton of debt. We need more of the same?
yes - many were not. many were.
but - wholly off topic and a fine attempt at misdirection. a simple quick search on "pentagon waste" will give a list comparable to a search for pron. and Pentagon Waste is the topic of this thread
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03:30 PM
Pyrthian Member
Posts: 29569 From: Detroit, MI Registered: Jul 2002
Text Size WASHINGTON – WASHINGTON (AP) — The House went after Pentagon waste Wednesday, saying improvements in how the Defense Department buys equipment and services can save taxpayers billions of dollars every year.
In legislation passed 417-3, lawmakers demanded that the federal government's biggest buyer do a better job in ensuring that it pays proper prices and gets what it pays for.
"For many years, we've witnessed waste in the Department of Defense's acquisition system spiral out of control, placing a heavy burden on both American taxpayers and on our men and women in uniform," said House Armed Services Committee Chairman Ike Skelton, D-Mo.
Many of the provisions outlined in the bill are basically requirements for better business practices. But with the Pentagon owning 86 percent of government assets estimated at $4.6 trillion and spending about 50 percent of its procurement dollars on service contracts, those add up. Sponsors of the bill said efficiencies and the elimination of waste, fraud and abuse could save taxpayers up to $135 billion over five years.
The legislation is a follow-up to a measure enacted into law last year to stop massive overruns in the Pentagon's weapons acquisition system. Weapons account for about 29 percent of spending; Wednesday's bill, which Skelton said deals with everything from paper clips to boots to food, represents the rest, about $1 billion in spending every day.
Among the provisions, it requires the Pentagon to set up standards to measure performance and hold everyone accountable, takes steps to make sure units get what they need when equipment is purchased and requires that the Pentagon's financial management system is subject to audits.
It also sets up a system of rewards to motivate good performance by the procurement workforce, improves training for that workforce and increases its size. Efforts would be made to expand the industrial base so that more small businesses can participate and prospective contractors and major subcontractors must show that they do not have serious tax debts.
The Pentagon has long been infamous for its $600 hammers and $300 toilet seats, and Rep. Rob Andrews, D-N.J., who for the past year has headed a panel with Rep. Mike Conaway, R-Texas, working on recommendations for the acquisition bill, said such abuses are still common.
He cited one example of the Air Force paying $13,000 for a refrigeration unit on a plane, and then paying $32,000 for the same unit two years later. He recounted that the Pentagon paid $201 million to truck petroleum products from Kuwait to Iraq even before a contract was signed, and that it can take nearly seven years to go from a proposal to buy information technology to actual use of the technology, by which time it is often obsolete.
The House on Wednesday also passed a measure requiring federal agencies to move more aggressively to stop improper payments to contractors — such as when they pay twice for the same service or pay for a service they never receive — and retrieve money that should never have been paid.
Rep. Patrick Murphy, D-Pa., a chief sponsor, cited an estimate that poor federal oversight resulted in $98 billion in improper payments in fiscal year 2009, out of total spending of about $2 trillion. He said that was double the budget of the Department of Homeland Security, and triple the budget of the National Institutes of Health.
President Barack Obama, in a statement, said the bill was "another critical step toward increased fiscal responsibility" and urged quick Senate action. Both bills now go to the Senate.
Clean Up Pentagon Waste By: Reed Irvine and Cliff Kincaid | August 14, 2001 | No comments
On the Fox News Sunday program, defense department official Paul Wolfowitz discussed Pentagon demands for $35 billion in more spending on national defense, and whether he could settle for $18 billion. Asked by host Brit Hume if he agreed with Senator John McCain’s charge that there is $18 billion in waste in the Pentagon, Wolfowitz said, “In principle, yes,” but then said it was a matter of finding it to generate the necessary savings for legitimate national security programs.
Is the budget of the Pentagon so mismanaged that officials can’t find out where $18 billion of waste is located? That’s the implication of what Wolfowitz is saying. This is the story that the media have to investigate and tell to the American people. A Senate Governmental Affairs Committee report has called DoD finances “a shambles,” adding, “It wastes billion of dollars each year, and cannot account for much of what it spends.”
DoD was number three on the list of the top ten worst examples of federal mismanagement. The report said that officials at DoD are making more than 57,000 purchases a day. “Unfortunately,” it added, “these same officials can’t tell us what they bought and whether they even needed what they got.” The General Accounting Office is quoted as saying that DoD could not reconcile a $7 billion difference between its available fund balances and what the Treasury said it had.
Unfortunately, there’s no concerted effort by the media to make sure that Pentagon officials correct the problem. Instead, smaller examples of sensational fraud get the attention, such as on July 27th when ABC World News Tonight and the NBC Nightly News ran stories about DoD employee credit cards meant to buy office supplies that were used to buy jewelry and clothes, flowers and DVD players, air conditioners and pizza. NBC’s Lisa Myers said one investigation found 500 cases of fraud in only two years, including an Army reservist whose wife went on a $13,000 shopping spree in Puerto Rico and a soldier who spent $3100 at a nightclub.
Senator Charles Grassley said it’s the same old story. “It shows that the accountability that we ought to have at the Defense Department on financial management isn’t there,” he said. Grassley, who requested the investigation, said heads should roll. “We don’t have enough heads rolling in the Defense Department ? people are not fired,” he told reporters. “We have to have that sort of strict action taken by the Defense Department in order to send a clear message to anybody else that we ain’t gonna put up with this anymore.”
NBC News disclosed that the practice of issuing purchase cards to federal agency employees was dramatically expanded in the 1990s after then-Vice President Al Gore’s National Performance Review recommended their use as a way to cut the costs of buying goods and services. These cards were described as “less costly and more efficient.” According to the General Accounting Office, the Defense Department reported more than 10 million purchase card transactions valued at $5.5 billion last year. “It could be just the tip of an iceberg,” Grassley said of the fraud.
Military Waste & Fraud: $172 billion/year excerpted from the book Take the Rich Off Welfare by Mark Zepezauer and Arthur Naiman Odonian Press, 1996
Military Waste and Fraud - $172 billion a year When it comes to wasting money, the Pentagon has no peer. For one thing, there's the single question of scale. For fiscal year 1996, the Pentagon budget was $265 billion ($7 billion more than it requested). That's 5% of our gross national product, a larger percentage than in virtually any other industrialized nation. In absolute dollars (not as a percentage of GNP), the Pentagon shells out 3 1/2 times more than the next largest military spender (Russia), 6 1/2 times more than Britain, 7 1/2 times more than France, 7 1/4 times more than Japan, 8 1/2 times more than Germany. Our military budget is bigger than the next nine largest military budgets combined, and sixteen times larger than the combined military budgets of all of our "regional adversaries"- Cuba, Syria, Iran, Iraq, North Korea and Libya. It accounts for 37% of all military spending on the planet (in comparison, our economy is only 22% of the world total). As enormous as the Pentagon's budget is, there's more military spending buried elsewhere-in the Department of Energy's production of fuel for nuclear weapons, in the military portion of the NASA budget, in the VA, etc. By adding in these hidden military expenses, the Center for Defense Information (CDI), a Washington think tank run by retired generals and admirals, concluded that we spend a total of $327 billion a year on the military. (When it did similar computations independently, the War Resisters League came up with $329 billion.) But that doesn't include what we have to pay for past Pentagon budgets. The CDI went back to 1941 and multiplied the military's percentage of each year's budget by the deficit for that year. Using that method, they figured that interest on past military spending cost us $167 billion in fiscal 1996. (The War Resisters League went all the way back to 1789 and came up with $291 billion.) Since the CDI's estimates are lower, let's be conservative and use them. Adding them together gives us a figure for total military spending-past and present-of $494 billion a year ($9 1/2 billion a week, $1 1/3 billion a day.
Waste beyond your wildest dreams But just the scale of the Pentagon's budget alone can't explain its prodigious ability to waste money. Another quality is required- world-class incompetence. There are so many examples of this that they tend to blur together, numbing the mind. Here are just a few: According to a US Senate hearing, $13 billion the Pentagon handed out to weapons contractors between 1985 and 1995 was simply "lost." Another $15 billion remains unaccounted for because of "financial management troubles." That's $2B billion-right off the top-that has simply disappeared...
Career criminals ... According to the Bulletin of the Atomic Scientists, every single one of the top ten weapons contractors was convicted of or admitted to defrauding the government between 1980 and 1992. For example: * Grumman paid the government $20 million to escape criminal liability for coercing subcontractors into making political contributions. * Lockheed was convicted of paying millions in bribes to obtain classified planning documents. * Northrop was fined $17 million for falsifying test data on its cruise missiles and fighter jets. * Rockwell was fined $5.5 million for committing criminal fraud against the Air Force. In another study, the Project on Government Oversight (PGO) searched public records from October 1989 to February 1994 and found-in just that 4~/~-year period-85 instances of fraud, waste and abuse in weapons contracting. For example: Boeing, Grumman, Hughes, Raytheon and RCA pleaded guilty to illegal trafficking in classified documents and paid a total of almost $15 million in restitution, reimbursements, fines, etc. * Hughes pleaded guilty to procurement fraud in one case, was convicted of it in a second case and, along with McDonnell Douglas and General Motors, settled out-of-court for a total of more than $1 million dollars in a third case. * Teledyne paid $5 million in a civil settlement for false testing, plus $5 million for repairs. * McDonnell Douglas settled for a total of more than $22 million in four "defective pricing" cases. But General Electric was the champ. PGO lists fourteen cases, including a conviction for mail and procurement fraud that resulted in a criminal fine of $10 million and restitution of $2.2 million. In our own research, we found several other examples of GE crimes and civil violations: * In 1961, GE pleaded guilty to price-fixing and paid a $372,500 fine. * In 1977, it was convicted of price-fixing again. * In 1979, it settled out-of-court when the State of Alabama sued it for dumping PCBs in a river. * In 1981, it was convicted of setting up a $1.25 million slush fund to bribe Puerto Rican officials. * In 1985, GE pleaded guilty to 108 counts of fraud on a Minuteman missile contract. In addition, the chief engineer of GE's space systems division was convicted of perjury, and GE paid a fine of a million dollars. * In 1985, it pleaded guilty to falsifying time cards. * In 1989, it paid the government $3.5 million to settle five civil lawsuits alleging contractor fraud at a jet-engine plant (which involved the alteration of 9,000 daily labor vouchers to inflate its Pentagon billings). In 1990, GE was convicted of criminal fraud for cheating the Army on a contract for battlefield computers; it declined to appeal and paid $16 million in criminal and civil fines. ($11.7 million of this amount was to settle government complaints that it had padded its bids on 200 other military and space contracts-which comes to just $58,000 or so per contract.) In 1993, GE sold its weapons division to Martin Marietta for $3 billion (retaining 23.5% of the stock and two seats on the board of directors). The largest investigation of Pentagon fraud took place between 1986 and 1990. Called Operation Ill Wind, it began when Pentagon official John Marlowe was caught molesting little girls. He cut a deal to stay out of jail and, for the next few years, secretly recorded hundreds of conversations with weapons contractors. There's no way of knowing how much the crimes Ill Wind looked into cost the taxpayers, but the investigation, which cost $20 million, brought in ten times that much in fines. According to Wall Street Journal reporter Andy Pasztor, "more than 90 companies and individuals were convicted of felonies... including eight of the military's fifteen largest suppliers....Boeing, GE and United Technologies pleaded guilty...Hughes, Unisys, Raytheon, Loral, Litton, Teledyne, Cubic, Hazeltine, Whittaker and LTV...admitted they violated the law." Unisys signed the largest Pentagon fraud settlement in history: $190 million in fines, penalties and forgone profits (which means they weren't allowed to charge for cost overruns the way military contractors usually do). Assistant Navy Secretary Melvyn Paisley was the central figure in the Ill Wind scandal and the highest-ranking person convicted (he was sentenced to four years in prison). He ran his office like a supermarket for weapons manufacturers, soaking up bribes, divvying up multibillion-dollar contracts and diverting work to a firm he secretly controlled with a partner. Paisley may have been a bit more...flamboyant than most, but there was nothing terribly unusual about his approach. As of 1994, nearly 70 of the Pentagon's 100 largest suppliers were under investigation. Fines for that year totaled a record $1.2 billion. That may sound like a lot, but it's less than 2% of the weapons industry's net income (which averaged $64 billion a year in 1994 and 1995). A billion or two in fines is hardly an incentive to end the corruption and waste in Pentagon contracting.
The black budget Not all Pentagon waste is visible. Hidden within the military budget is a secret "black budget" that's not subject to any congressional oversight (toothless as that usually is). It includes money for the CIA (tucked away in the Air Force budget, it gets about 10% of the total) and for less well-known but better-funded "intelligence" organizations like the National Security Agency (NSA) and the National Reconnaissance Office (NRO). In 1995, several members of Congress tried to argue that, with the Cold War over, there was no harm in publishing the total amount of the intelligence black budget, without details on how it was spent. Even this modest proposal went down to defeat but, in the process, led to the absurd spectacle of legislators mentioning the figure-$28 billion for fiscal 1996-while arguing that it shouldn't be publicly disclosed. John Pike of the Federation of American Scientists estimates that the 1996 black budget included an additional $3 billion or so in military "stealth" projects, for a total of about $31 billion-down from about $36 billion a year during the Reagan years. Pike attributes the decrease to a couple of projects that grew too huge to be hidden in the black budget. One of the projects that "surfaced" into the public budget is the B-2 bomber. Originally projected to cost $550 million each, B-2's ended up costing $2.2 billion each-literally more than their weight in gold. Another is MILSTAR, which is designed to ''fight and win a six-month nuclear war...long after the White House and the Pentagon are reduced to rubble." The Air Force has tried to kill this idiotic program four times since it emerged from the black budget, but Congress won't listen. MILSTAR has cost us between $8 and $12 billion so far, and could cost another $4.5 billion between 1996 and 2000. Since the black budget is completely off the books, it encourages waste on a titanic scale. As one Pentagon employee put it: "In a black project, people don't worry about money. If you need money, you got it. If you screw up and need more, you got it. You're just pouring money into the thing until you get it right. The incentive isn't there to do it right the first time. Who's going to question it?" ... Don't call it bribery Why do our legislators put up with military waste and fraud? For the same reason they do anything. Defense PACs gave members of Congress $7.5 million in 1993 and 1994. And PAC money is just part of the story. Of the $4.5 billion in unrequested weapons funding added to the Pentagon budget for fiscal 1996, 74% was spent in or near the home districts of representatives who sit on the House National Security Committee. Another $290 million was spent in or around Newt Gingrich's home district, Cobb County, Georgia. (Cobb gets more federal pork than any county except Arlington in Virginia, which is right next to Washington, and Brevard in Florida, where Cape Canaveral is located.) Although the Pentagon insists that it doesn't need any more B-2 bombers, Norman Dicks (D-Washington) and Ted Stevens (R-Alaska) don't care. Dicks-who's one of the largest recipients of military PAC money in the House-received over $10,000 from nine major B-2 contractors in the four months just before the battle to resurrect B-2 funding. Stevens got $37,000 between 1989 and 1994, making him one of the top ten recipients of PAC contributions from B-2 contractors. (Isn't it amazing how little politicians cost?) If PAC money isn't enough, military lobbyists can always argue jobs. It didn't hurt funding for the B-2 that spending for it was spread across 88% of all congressional districts and all but two states. Liberal California Representative Maxine Waters defended her vote to continue B-2 funding by candidly admitting that it was one of the few ways she knew to bring federal jobs to her district. (Since her district is South-Central Los Angeles, you can understand her desperation.) There's no conceivable need for Seawolf submarines (which cost $2.4 billion apiece)- except for the votes in Connecticut, where it's built, and in surrounding states. That's why liberal New England senators like Ted Kennedy, John Kerry and George Mitchell supported it, as did Bill Clinton-who needed votes from those states-in his 1992 campaign. Neither the Air Force nor the Navy wants any part of the V-22 Osprey assault plane, which the Bush administration tried in vain to kill. But it's supported by legislators in Texas and Pennsylvania-the two states that do the most contracting for it-and by Clinton, who...oh, you get the idea. What about the jobs we'd lose? -- If new weapons systems are nothing more than make-work programs, they're really inefficient ones. A 1992 Congressional study estimated that shifting money from the Pentagon to state and local governments would create two jobs for every one it eliminates. Building weapons we don't need is so wasteful that the economy would probably be better off if we just paid people the same money to stay at home. The Congressional Budget Office concluded that a billion dollars spent on successfully promoting arms exports creates 25,000 jobs, but if that same billion is spent on mass transit, it creates 30,000 jobs; on housing, 36,000 jobs; on education, 41,000 jobs; or on health care, 47,000 jobs. Aside from the cost, using federal money to prop up military contractors creates a disincentive for them to convert to civilian products. Shifting Pentagon funds to urgently needed domestic uses would be good for both the US and the rest of the world. As President Eisenhower put it, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed." Pentagon boosters argue that military spending has already been slashed too far, since more than 800,000 military-related jobs have disappeared since 1990. But many of these layoffs were in nonmilitary divisions of the companies, and more than half of them were caused by the economy contracting in a recession, not by smaller Pentagon budgets-especially since they've dropped off only slightly from their all-time high of $304 billion (adjusted for inflation) in 1989. Just eight companies-McDonnell Douglas, Lockheed, Martin Marietta, Boeing, General Dynamics, Northrop Grumman, Raytheon and Hughes-were responsible for half of all military contractors' layoffs in 1993. Only 15% of Boeing's layoffs and a third of McDonnell Douglas' were related to military production. After the firings, the stocks of these eight companies rose by 20% to 140%, and the salaries of their CEOs soared.
The revolving door Another reason for Pentagon waste and fraud is the revolving door between military contractors and government personnel. Before he was Secretary of Defense, Caspar Weinberger was a top executive at Bechtel, which does massive engineering projects for the Pentagon and foreign clients like Saudi Arabia. Before he was Secretary of State, George Shultz was president of Bechtel. Before his days as a Navy felon, Melvyn Paisley worked for Boeing-as did his boss at the Pentagon, Navy Secretary John Lehman. Secretary of Defense William Perry and CIA Director John Deutch both did consulting work for Martin Marietta before they joined the Clinton administration. The list goes on and on. Generals have an interest in keeping weapons contractors happy-at least if they want to sit on the boards of corporations after they retire. Contractors can use their connections at the Pentagon to find work there and, like Paisley, feed lucrative contracts to their friends in the private sector. On both sides of the revolving door, militarists live in the lap of luxury. Nobody batted an eyelash when Paisley entertained contractors in staterooms on the Queen Elizabeth, nor is there ever much dismay when military aircraft are used, at a cost of tens of thousands of dollars an hour, to fly politicians, lobbyists and weapons contractors on pleasure trips.
Direct handouts Still, personal perks don't cost us much compared to corporate perks. For example, when Lockheed and Martin Marietta merged to become Lockheed Martin, $92 million in bonuses-or "triggered compensation," as they prefer to call it-was handed out to top executives and members of the board. They expect the government to pick up $31 million of that. John Deutch quietly reversed a 40-year ban on such compensation when he was at the Pentagon. The biggest bonus, $8.2 million, went to the new company's president, Norman Augustine, who Deutch and William Perry had done work for at Martin Marietta. Both Deutch and Perry obtained waivers from an ethics regulation that prohibits Pentagon officials from dealing with people they formerly did business with untl a year has passed. (Up to 30,000 employees will lose their jobs as a result of this merger.) Military contractors milk the government in other ways as well. It's common for the State Department to give foreign aid to brutal dictatorships like Indonesia and Guatemala, with the requirement that the money be used to buy US weapons. Each year this program results in the transfer of $5-7 billion from US taxpayers to US arms merchants (not to mention the murder of lots of innocent people in the countries involved). The Pentagon has similar programs that not only provide subsidies to foreign countries to buy from US weapons suppliers but also help them negotiate the sale. In 1994, General Dynamics and Lockheed received a total of $1.9 billion in foreign military sales awards- 126,567% more than the $1.5 million they gave to candidates for federal offices in the 1994 elections. (As we've already remarked, politicians sure are a bargain.) Thanks in large part to these Pentagon programs-on which we spend $5.4 billion a year, almost half our total foreign aid expenditure-the US is the largest arms supplier on earth, with 43% of the world trade. What's more, many of these loans are ultimately defaulted on or forgiven. Egypt, for example, was let off the hook for $7 billion in loans, as a reward for participating in the Gulf War...
How much military spending is waste? Even if you accept the absurd two-war plan, lots of savings are still possible: * We have more Trident missiles than we could ever use, and nobody to aim them at. But the Navy isn't happy with their old Tridents (currently funded at $787 million a year). They want to replace them with a newer version, even though both kinds of Tridents are likely to be eliminated under the next arms-control agreement, START lll. * Although our 121 C-5 and 265 C-144 transport planes are perfectly adequate, the Pentagon wants to replace a bunch of them with 120 new C-17s, at a total cost of $45 billion. The rationale for the F-22 fighter is especially weak. It was designed to achieve air superiority in the 1990s over the now-defunct Soviet Union. We already have 900 F-15s (which the GAO calls the best tactical aircraft in the world), and none of our real or potential enemies have more than a handful of planes that come anywhere close to matching its capabilities. That hasn't stopped the Pentagon from asking for 442 F-22s, at a total cost of $72 billion. * Even a hawk like Barry Goldwater points out the waste involved in the Army, Navy, Air Force and Marines each having its own air force. Both the Marines and the Army have light infantry divisions, and the Navy and the Air Force aren't satisfied with the same kind of satellites and cruise missiles-each has to have its own kind. * The Pentagon keeps 100,000 troops in Europe and 70,000 in Korea and Japan. We spend $80 billion a year on NATO, $59 billion a year in South Korea and $48 billion a year in the Persian Gulf. In all of these cases, the countries we're supposedly defending have militaries that are better-equipped and much better-funded than their enemies'. * As we've mentioned above, even the Pentagon doesn't want any more B-2 bombers, V-22 Osprey assault planes or additional Star Wars funds. The Navy doesn't want the Seawolf submarine and admits it doesn't need another $3.5-billion nuclear-powered aircraft carrier. But try telling that to the companies that make those weapons, or to the politicians whose campaigns they fund. By now it should be obvious that the "defense" budget isn't based on any rational calculation of what the defense of this country actually requires-it's based on what US arms manufacturers can get away with (almost anything, it turns out). Attaching the word "defense" to this spending isn't just misleading-it's the complete opposite of the truth, since military waste and fraud make our country weaker, not stronger. The preposterously obese Pentagon budget is the single greatest threat there is to our national security. It's not just wild-eyed radicals who feel this way: * Lawrence Korb, a military planner under Reagan who's now with the Brookings Institution, says we could have the most overwhelmingly powerful military in the world for around $150 billion a year. * In a report called Ending Overkill, the Bulletin of the Atomic Scientists laid out a detailed military budget that includes funding for a lot of programs we think are unnecessary (Star Wars, for example). Even so, its report calls for scaling down the military budget to $115 billion by the year 2000, and states that this would still give us a force "adequate to undertake six or eight Somalia-like operations at the same time, or to mount a force somewhat larger than the American part of Desert Storm." * The Center for Defense Information (founded by retired generals and admirals) thinks we could get by quite nicely with about a million soldiers, instead of the 1.6 million we now have, and with a Pentagon budget of about $200 billion. The average of those three estimates is $155 billion a year-quite a bit less than the $327 billion a year we actually spend. (And remember: that $327 billion doesn't include the $167 billion or more we lay out each year to service debt that's the result of past military programs. Unfortunately, there isn't much we can do about that past debt-except to cut down on present military budgets, so the problem doesn't keep getting worse.) Subtracting $155 billion from $327 billion gives us a figure for current military waste and fraud of $172 billion a year-almost $500 million a day-virtually all of which goes to large corporations and super-rich individuals. (Sure, some of it pays for ordinary people's salaries, but they'd also be earning money if they were doing something useful.) Half a billion dollars a day could buy a lot of medical care, or fill a lot of potholes, or...you name it. After all, it's your money.
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03:42 PM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
Originally posted by partfiero: Our Federal Government is the most wasteful in the history of the world, and there are those who want to expand the size of it. Go figure!
I dont disagree with that at all. I disagree with those who only want to shrink single aspects, and ignore the single largest money incinerator on earth: The Pentagon.
yes - G'ment needs culling in both size and scope. 100% with ya on that statement.
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03:51 PM
partfiero Member
Posts: 6923 From: Tucson, Arizona Registered: Jan 2002
I dont disagree with that at all. I disagree with those who only want to shrink single aspects, and ignore the single largest money incinerator on earth: The Pentagon.
yes - G'ment needs culling in both size and scope. 100% with ya on that statement.
Since the feds forever show little interest in dealing with waste, the only way to shrink the the waste is to shrink the size of the federal government. Think it has grown by 25% since the beginning of 2013, a little nerve shaking. Time to rethink what monies the feds should be responsible for handing out. And it ain't national health care unless one wants it completely destroyed, like everything else they touch.
Originally posted by Doug85GT: I know a lot of people see a big pile of money and assume they can just take it to spend on anything they want. But in this case, none of that money was going to be spent on American soil anyway. It was not American money.
Originally posted by JazzMan: Wow, I didn't realize other countries printed American dollars. Thanks, appreciate the heads-up on that one.
lol - that much the story with ALOT of the Bush/Iraq horsepoop. many things done "on the side" and "off the books", and endless "shuckin' & Jivin'".
if we all close our eyes - it didnt cost a thing.
but NOW the budget needs a fixin! run in circles waving arms in the air. Its needed a fixin for a long time. every time a republican gets into the big office it seems it needs a fixin afterwards....the lady(s?) dost protest to much?
Wow, I didn't realize other countries printed American dollars. Thanks, appreciate the heads-up on that one.
I guess you have never left the country because you don't seem to know that countries, organizations and even individuals can exchange one currency for another.
OOPS 
