How to Blow $700 Billion – Rolling Stone
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How to Blow $700 Billion

It’s easier than you think

UNITED STATES - SEPTEMBER 24: Aerial view of the Pentagon building photographed on Sept. 24, 2017. (Photo By Bill Clark/CQ Roll Call)

Aerial view of the Pentagon building photographed on Sept. 24, 2017.

Bill Clark/CQ Roll Call

According to a study led by Michigan State University professor Mark Skidmore, some $21 trillion in Pentagon accounting transactions, made over a 17-year period, lack supporting data. This doesn’t mean the money is gone — the Pentagon only received roughly $9.2 trillion in budget money during that time — but it does mean the system is so choked with bad numbers, we have little idea of what mischief might be taking place at the Department of Defense.

Here’s a brief list of some of the problems likely lurking in the Pentagon’s books.

For more, check out this month’s feature story: The Pentagon’s Bottomless Money Pit.

Double-Billing

An alarmingly simple scheme. As Andy the Air Force accountant puts it: “A contractor accidentally invoices the military twice. It gets paid twice.” For example, one company got paid in full for delivering just 28 percent of a lug-nut contract; or the Swiss contractor that supposedly over-billed by $757 million to supply the troops in Afghanistan.

Misappropriation

There have been multiple cases involving officials taking advantage of flaws in the Pentagon’s system over the years. One Air Force sergeant ended up sending 17 checks worth $436,684 to a co-conspirator. A civilian secretary bilked the Air Force out of $1.4 million for more than a decade before anyone noticed.

Bribery

In one of the worst military scandals in recent history, a contractor called “Fat Leonard” reportedly bribed Navy officials with prostitutes and more than $500,000 in order to steer Navy boats to his portside service centers, where he systematically overbilled taxpayers. The 350-pound grifter got more than $200 million in Navy contracts.

If It Ain’t Broke

The military’s inventory has reparables and consumables. A “consumable” is a disposable item like a bullet. Many of the military’s “reparables” must be sent back to the original contractor, where the part could be replaced. So why fix the part at all? One F-35 repair depot found 68 percent of parts marked for repair did not need fixing.

Theft and Loss

On paper, the military can lose track of even big things — like 39 Black Hawk helicopters. But Andy thinks if independent analysts get to actually count the stuff that’s supposed to be sitting in depots, this will be the “showstopper” of the entire audit, revealing the true extent of the corruption and/or disorganization in the military.

Out of Sight

The military has more than 800 bases in at least 80 countries. The more distant and dangerous the locale, the harder the accounting. The IG for Afghanistan found $15 billion in waste. Trump has floated replacing troops with contractors — an idea that reportedly came from Erik Prince, founder of the security firm once known as Blackwater.

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