Wednesday, May 25, 2016
How to
Disappear Money, Pentagon-Style
Slush funds, smoke and mirrors, and funny
money equal weapons systems galore
A Luke Air Force Base F-35 Lightning II
stands by to take off April 15, 2015, at Nellis Air Force Base, Nev. (U.S. Air
Force photo/Senior Airman Thomas Spangler)
Now you see it, now you don’t. Think of it as
the Department of Defense’s version of the street con game, three-card monte,
or maybe simply as the Pentagon shuffle. In any case, the Pentagon’s
budget is as close to a work of art as you’re likely to find in the U.S. government
-- if, that is, by work of art you mean scam.
The United States is on track to spend more than $600 billion on the
military this year -- more, that is, than was spent at the height of President
Ronald Reagan’s Cold War military buildup, and more than the military budgets
of at least the next seven nations in the
world combined. And keep in mind that that’s
just a partial total. As an analysis by the Straus Military Reform
Project has shown, if we count related activities like homeland security,
veterans' affairs, nuclear warhead production at the Department of Energy,
military aid to other countries, and interest on the military-related national
debt, that figure reaches a cool $1 trillion.
The more that’s spent on “defense,” however,
the less the Pentagon wants us to know about how those mountains of money are
actually being used. As the only major federal agency that can’t pass an audit, the Department of Defense
(DoD) is the poster child for irresponsible budgeting.
It’s not just that its books don’t add up,
however. The DoD is taking active measures to disguise how it is spending
the hundreds of billions of taxpayer dollars it receives every year -- from
using the separate “war budget” as a slush fund to pay for pet projects that
have nothing to do with fighting wars to keeping the cost of its new nuclear bomber a
secret. Add in dozens of other secret projects hidden in the
department’s budget and the Pentagon’s poorly documented military aid programs,
and it’s clear that the DoD believes it has something to hide.
Don’t for a moment imagine that the
Pentagon’s growing list of secret programs and evasive budgetary maneuvers is
accidental or simply a matter of sloppy bookkeeping. Much of it is
remarkably purposeful. By keeping us in the dark about how it spends our
money, the Pentagon has made it virtually impossible for anyone to hold it
accountable for just about anything. An entrenched bureaucracy is
determined not to provide information that might be used to bring its sprawling
budget -- and so the institution itself -- under control. That’s why budgetary
deception has become such a standard operating procedure at the Department of
Defense.
The audit problem is a case in point.
The Pentagon along with all other major federal agencies was first required to
make its books auditable in the Chief
Financial Officers Act of 1990. More than 25 years later,
there is no evidence to suggest that the Pentagon will ever be able to pass an
audit. In fact, the one limited instance in which success seemed to be
within reach -- an audit of a portion of the books of a single service, the
Marine Corps -- turned out, upon closer inspection, to be a case study in bureaucratic
resistance.
In April 2014, when it appeared that the
Corps had come back with a clean audit, Secretary of Defense Chuck Hagel was so
elated that he held a special ceremony in the “Hall of Heroes” at the Pentagon.
“It might seem a bit unusual to be in the Hall of Heroes to honor a bookkeeping
accomplishment,” he acknowledged, “but damn, this is an
accomplishment.”
In March 2015, however, that
“accomplishment” vanished into thin air. The
Pentagon’s Office of Inspector General (OIG), which had overseen the work of
Grant Thornton, the private firm that conducted the audit, denied that it had
been successful (allegedly in response to “new information”). In fact, in
late 2013, as Reuters reported, auditors at the OIG had argued for
months against green-lighting Grant Thornton’s work, believing that it was full
of obvious holes. They were, however, overruled by the deputy inspector
general for auditing, who had what Reuters described as a “longstanding
professional relationship” with the Grant Thornton executive supervising the
audit.
The Pentagon and the firm deny that there was
any conflict of interest, but the bottom line is clear enough: there was far
more interest in promoting the idea that the Marine Corps could
pass an audit than in seeing it actually do so, even if inconvenient facts had
to be swept under the rug. This sort of behavior is hardly surprising once you
consider all the benefits from an undisturbed status quo that accrue to Pentagon
bureaucrats and cash-hungry contractors.
Without a reliable paper trail, there is no
systematic way to track waste, fraud, and abuse in Pentagon contracting, or
even to figure out how many contractors the Pentagon employs, though a
conservative estimate puts the number at well over 600,000. The result is easy
money with minimal accountability.
How to Arm the Planet
In recent years, keeping tabs on how the
Pentagon spends its money has grown even more difficult thanks to the “war
budget” -- known in Pentagonese as the Overseas Contingency Operations (OCO)
account -- which has become a nearly bottomless pit for items that have nothing
to do with fighting wars. The use of the OCO as a slush fund began in
earnest in the early years of the Bush administration’s war in Iraq and has
continued ever since. It’s hard to put a precise number on how much money
has been slipped into that budget or taken out of it to pay for pet projects of
every sort in the last decade-plus, but the total is certainly more than $100 billion and counting.
The Pentagon’s routine use of the war budget
as a way to fund whatever it wants has set an example for a Congress that’s
seldom seen a military project it wasn’t eager to pay for. Only recently,
for instance, the House Armed Services Committee chair, Texas Republican Congressman
Mac Thornberry,proposed taking $18 billion from the war
budget to cover items like an extra 11 F-35 combat aircraft and 14 F-18
fighter-bombers that the Pentagon hadn’t even asked for.
This was great news for Lockheed Martin,
which needs a shot in the arm for its troubled F-35 program, already slated to
be the most expensive weapons system in history,
and for Boeing, which has been lobbying aggressively to keep its F-18
production line open in the face of declining orders from the Navy. But
it’s bad news for the troops because, as the Project on Government Oversight
has demonstrated, the money used to pay for the
unneeded planes will come at the expense of training and maintenance funds.
This is, by the way, the height of hypocrisy
at a time when the House Armed Services Committee is routinely sending
out hysterical missives about the country’s
supposed lack of military readiness. The money to adequately train
military personnel and keep their equipment running is, in fact, there. Members
of Congress like Thornberry would just have to stop raiding the operations
budget to pay for big ticket weapons systems, while turning a blind eye to
wasteful spending in other parts of the Pentagon budget.
Thornberry’s gambit may not carry the day,
since both President Obama and Senate Armed Services Committee chair John
McCain oppose it. But as long as a
separate war budget exists, the temptation to stuff it with unnecessary
programs will persist as well.
Of course, that war budget is just part of
the problem. The Pentagon has so many budding programs tucked away in so
many different lines of its budget that even its officials have a hard time
keeping track of what’s actually going on. As for the rest of us, we’re
essentially in the dark.
Consider, for instance, the proliferation of
military aid programs. The Security Assistance Monitor, a nonprofit that
tracks such programs, has identified more than two
dozen of them worth about $10 billion annually. Combine them with
similar programs tucked away in the State Department’s budget, and the U.S. is contributing
to the arming and training of security forces in 180 countries. (To put that
mind-boggling total in perspective, there are at most 196 countries
on the planet.) Who could possibly keep track of such programs, no less
what effect they may be having on the countries and militaries involved, or on
the complex politics of, and conflicts in, various regions?
Best suggestion: don’t even think about it
(which is exactly what the Pentagon and the military-industrial complex want
you to do). And no need for Congress to do so either. After all, as
Lora Lumpe and Jeremy Ravinsky of the Open Society Foundations noted earlier this year, the Pentagon is
the only government agency providing foreign assistance that does not even have
to submit to Congress an annual budget justification for what it does. As
a result, they write, “the public does not know how much the DoD is spending in
a given country and why.”
Slush Funds Galore
If smokescreens and evasive maneuvers aren’t
enough to hide the Pentagon’s actual priorities from the taxpaying public,
there’s always secrecy. The Secrecy Project at the Federation of American
Scientists recently put the size of the intelligence portion of the national
security state’s “black budget“ -- its secret spending on
everything from spying to developing high-tech weaponry -- at more than $70 billion.
That figure includes a wide variety of activities carried out through the CIA,
the NSA, and other members of the intelligence community, but $16.8 billion of
it was requested directly by the Department of Defense. And that $70
billion is just the tip of the iceberg when it comes to secret spending
programs, since billions more in secret financing for the development and
acquisition of new weapons systems has been squirreled away elsewhere.
The largest recent project to have its total
costs shrouded in secrecy is the B-21, the Air Force’s new nuclear bomber. Air
Force officials claim that they need to keep the cost secret lest potential
enemies “connect the dots” and learn too much about the plane’s key
characteristics. In a letter to Senator McCain, an
advocate of making the cost of the plane public, Ronald Walden of the Air
Force’s Rapid Capabilities Office claimed that there was “a strong correlation
between the cost of an air vehicle and its total weight.” This, he suggested,
might make it “decisively easier” for potential opponents to guess its range
and payload.
If such assessments sound ludicrous, it’s
because they are. As the histories of other major Pentagon acquisition
programs have shown, the price of a system tells you just that -- its price --
and nothing more. Otherwise, with its classic cost overruns, the F-35
would have a range beyond compare, possibly to Mars and back. Of course, the
real rationale for keeping the full cost estimate for the B-21 secret is to
avoid bad publicity. Budget analyst Todd Harrison of the Center for
Strategic and International Studies suggests that it’s an attempt to avoid
“sticker shock” for a program that he estimates could cost more than $100
billion to develop and purchase.
The bomber, in turn, is just part of a
planned $1 trillion splurge over the next three
decades on a new generation of bombers, ballistic missile submarines, and
ground-based nuclear missiles, part of an updating of the vast U.S. nuclear
arsenal. And keep this in mind: that trillion dollars is simply an
initial estimate before the usual Pentagon cost overruns even begin to come
into play. Financially, the nuclear plan is going to hit taxpayer wallets
particularly hard in the mid-2020s when a number of wildly expensive
non-nuclear systems like the F-35 combat aircraft will also be hitting peak
production.
Under the circumstances, it doesn’t take a
genius to know that there’s only one way to avoid the budgetary equivalent of a
30-car pile up: increase the Pentagon’s already ample finances yet again.
Principal Deputy Undersecretary of Defense Brian McKeon was referring to
the costs of building new nuclear delivery vehicles when he said that the administration was
“wondering how the heck we’re going to pay for it, and probably thanking our
lucky stars we won’t be here to answer the question.” Of course, the rest
of us will be stuck holding the bag when all those programs cloaked
in secrecy suddenly come out of hiding and the bills come fully due.
At this point, you may not be shocked to
learn that, in response to McKeon’s uncomfortable question, the Pentagon has
come up with yet another budgetary gimmick. It’s known as the “National
Sea-Based Deterrence Fund,” or as Taxpayers for Common Sense more accurately
labels it, “the Navy’s submarine slush fund.” The idea -- a
longstanding darling of the submarine lobby (and yes,
Virginia, there is a submarine lobby in Washington) -- is to set up a separate
slush fund outside the Navy’s normal shipbuilding budget. That’s where the
money for the new ballistic missile submarine program, currently slated
to cost $139 billion for 12 subs, would
go.
Establishing such a new slush fund would, in
turn, finesse any direct budgetary competition between the submarine program
and the new surface ships the Navy also wants, and so avoid a political battle
that might end up substantially reducing the number of vessels the Navy is
hoping to buy over the next 30 years. Naturally, the money for the
submarine fund will have to come from somewhere, either one of the other
military services or that operations and maintenance budget so regularly raided
to help pay for expensive weapons programs.
Not to be outmaneuvered, Air Force Secretary
Deborah Lee James has now asked Congress to set up a “strategic deterrence fund” to pay for its two
newest nuclear delivery vehicles, the planned bomber and a long-range
nuclear-armed ballistic missile. In theory, this would take pressure off
other major Air Force projects like the F-35, but as with the submarine fund,
it only adds up if a future president and a future Congress can be persuaded to
jack up the Pentagon budget to make room for these and other weapons systems.
In the end, however the specifics
work out, any “fund” for such weaponry will be just another case of smoke and
mirrors, a way of kicking the nuclear funding crisis down the road in hopes of
fatter budgets to come. Why make choices now when the Pentagon and the military
services can bet on blackmailing a future Trump or Clinton
administration and a future Congress into ponying up the extra billions of
dollars needed to make their latest ill-conceived plans add up?
If your head is spinning after this brief
tour of the Pentagon’s budget labyrinth, it should be.
That’s just what the Pentagon wants its painfully complicated budget practices
to do: leave Congress, any administration, and the public too confused and
exhausted to actually hold it accountable for how our tax dollars are being
spent. So far, they’re getting away with it.
© 2016 William Hartung
William D. Hartung is the director of the
Arms and Security Project at the Center for International Policy. He is the
author of Prophets of War: Lockheed Martin and the Making of the
Military-Industrial Complex (Nation Books, 2011). He is the co-editor
of Lessons from Iraq: Avoiding the Next War (Paradigm Press,
2008).
Donations can be sent to the Baltimore Nonviolence Center,
325 E. 25th St., Baltimore, MD 21218. Ph: 410-323-1607; Email:
mobuszewski [at] verizon.net. Go to http://baltimorenonviolencecenter.blogspot.com/
"The master class
has always declared the wars; the subject class has always fought the battles.
The master class has had all to gain and nothing to lose, while the subject
class has had nothing to gain and everything to lose--especially their lives."
Eugene Victor Debs
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