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1980s Time Warp: The Time Is Right, Again, for DoD Reform

There have been a series of events and reports in this past month that has sent my brain into a 1980s time warp. There is a recent report on wasteful spending on Department of Defense (DoD) spare parts

There have been a series of events and reports in this past month that has sent my brain into a 1980s time warp. There is a recent report on wasteful spending on Department of Defense (DoD) spare parts, a very conservative senator is calling for a defense budget freeze, a task force is calling for the Pentagon to simply try to pass an audit, there are calls not to proceed with a weapon unless it can pass its operational tests and officials are saying that we have too many officers for our troops, planes and ships.

In the 1980s, I founded and ran a nonprofit organization, the Project on Military Procurement (now called the Project on Government Oversight (POGO), where I serve on the board of directors), which exposed weapons that didn’t work, cheating on weapons testing, excessive numbers of officers, a Pentagon with severe audit and estimating costs problems and, yes, we also exposed the unforgettable overpriced spare parts such as the $7,622 coffee brewer, the $435 hammer and the $600 toilet seat. These exposés, especially the spare parts scandals that hit home with the public, led conservative Sen. Chuck Grassley to call for and succeed in getting a one-year budget freeze on the DoD budget in 1986, in the middle of the Reagan military buildup and at the height of cold war rhetoric.

In the 1980s, along with the one-year defense budget freeze, a group of good government groups, military reformers and a bipartisan coalition in the House and Senate (think of then Congresswoman Barbara Boxer and Senator Grassley enthusiastically co-sponsoring legislation together) were able to pass legislation to make the DoD contractors compete more with each other to get the government the lowest price, slow down the revolving door between officials at the DoD and military contractors, work toward the DoD actually passing a standard audit, start a DoD independent operational test office to make sure that the services were not cheating on testing their weapons and even legislation to force the DoD to realistically price their weapons. I remember engaging in hand-to-hand combat for years on the Hill to get these reforms passed so that there would be at least some type of accountability.

Unfortunately, the DoD bureaucracy and the defense industry were able to water down these laws over the years and many of the audit and investigative changes were killed off during Al Gore’s reinventing government initiative (the DoD bureaucracy, with the help of the DoD contractor powerful lobby, “reinvented” and streamlined the Pentagon by decimating the audit and investigative personnel so that the money would flow through with few pesky checks and balances).

One of the first recent reports that started me back to my 1980s sentimental journey was a series of Government Accountability Office (GAO) reports on spare parts. Compiled into a press release by independent Sen. Bernie Sanders, the Army, Navy, Air Force and the Defense Logistics Agency (DLA), managed to buy (at an inflated price) $36.9 billion of unusable spare parts. This mind-boggling amount is put in perspective when you realize that it is almost twice the amount of money ($20 billion) that BP was forced to pledge to help make the people of the Gulf coast whole from the largest environmental catastrophe in our history.

But these GAO reports were issued over the past several years and were duly filed away until an outraged senator complied a press release with all the reports and the numbers. And the waste of this money wasn’t front-page news … I might have missed it unless I, as a DoD waste-and-fraud wonk, routinely Googled these type of stories.

I also saw that Sen. Tom Coburn, a very conservative senator from Oklahoma, has written a thorough and tough letter to the Obama appointed National Commission on Fiscal Responsibility and Reform laying out some very depressing facts, but also offering a surprising, vintage Senator Grassley reform to make the DoD pay attention to their staggering fiscal problems. Senator Coburn is a member of the commission. Here are some of the facts from his letter that aren’t well known, but should be:

  • Total Pentagon spending is higher today, in constant dollars, than at any time during the past 60 years.
  • “Compared to China, Russia, Iran, North Korea and Cuba, we are spending more than three times of what all those nations spend combined.” And “US defense spending almost matches what the entire rest of the world spends.”
  • The Navy has fewer ships, the Air Force has fewer planes and the Army has fewer combat divisions even though the costs for all of these items have risen prohibitively in constant dollars. [Time warp: In 1983, I edited a book called “More Bucks, Less Bang: How the Pentagon Buys Ineffective Weapons” with a chapter called “Overspending to Weakness.”]
  • “The Government Accountability Office (GAO) found that cost growth from 2001 to 2008 in major weapon systems amounted to $296 billion.”
  • DoD cannot pass an audit and is one of the few federal programs that can’t. DoD cannot track its money, it doesn’t know who owes it money and is ignoring the laws that govern its spending, even the one the Congress passed last year.
  • The new plan date for the DoD to pass an audit has slipped to 2017 and that date is being called unrealistic.

There are more facts like these in Senator Coburn’s letter, but these facts are enough to give you the depressing and dismal picture. I know well about the problem of the DoD being unable to track its money. I have worked with whistleblowers who have reported fraud through the DoD hotline or the inspector general’s office only to have the investigators say that they cannot follow the fraud or the money because the Pentagon is unauditable – yes, unauditable – a gloomy word in DoD jargon. I wrote about this for The Huffington Post right after Obama was elected. I also have worked with a former Defense Finance and Accounting Service (DFAS) long-time employee who has told me that the auditing reform has to go down to the very bottom of DoD and military service accounting because otherwise all audit reforms will be based on false numbers – “garbage in, garbage out” – so it is a daunting task that the DoD already has no stomach for.

The entrenched, myopic and unyielding DoD bureaucracy has seen presidents, Congresses and reformers like me come and go for decades, and has learned to make the right noises during testimony in Congress, appoint internal commissions and ignore external commissions and claim that they want the best for the troops when their gluttonous spending habits are exposed year after year. The bureaucracy has learned, as my old reformer friend Ernie Fitzgerald use to say, to “hunker down like a jackass in a hail storm” and wait out each wave of attempted reform leaving people like me too disheartened and discouraged to even try again. (Between each wave of reform, I have been happily working with whistleblowers to file qui tam, False Claims Act cases to recover money from the government and have helped to put over $100 million back in the US Treasury.)

Senator Coburn suggests a list of things to do to try to tackle the Pentagon budget, but suggests a startling approach to solving the problem. Having seen the DoD wiggle out of permanent reform before, Senator Coburn has taken a page from Senator Grassley, who got a one-year defense budget freeze and other reforms passed. However, Senator Coburn has gone one step farther. He knows that the DoD bureaucracy is not moved to reform by scolding it or even passing legislation requiring the reform. He has suggested that the DoD will listen and will have to reform if you freeze their lifeline of money:

Begin a crash program to have the Pentagon pass a financial audit. To provide the necessary incentive for a financial audit the “base” Pentagon budget should be frozen in FY2012 at the FY2011 level. Unless and until all major components and all major defense acquisition programs are certified by the Inspector General or an independent public accountant for an unqualified audit option, spending for those components and those programs should remain frozen. This freeze should not apply to any spending for direct support of overseas contingency operations of Defense Department personnel and wounded warrior accounts. If the Secretary of Defense or Congress asserts that a freeze will harm the national security of the United States or our troops in combat, funding may be increased but only by equally reducing other Defense Department components or programs.

This is a bold move and, based on my experience, I can already see the bureaucracy working with sympathetic members of Congress to get around the freeze. But if the Obama administration and the Congress would hold tough on the freeze and make sure that the audits are real, with no exceptions, there could be a revolution in defense spending with billions of dollars to be saved. It is a big “if,” but I am an eternal optimist despite my 30 years of experience of trying to reform the DoD for its own good.

Other members of Congress are also trying to see if the DoD can be reformed. Several members of Congress, including Rep. Barney Frank and Rep. Ron Paul, formed a task force called the Sustainable Defense Task Force, made up of think-tank and other DoD policy wonks to look at what can be done about the DoD budget. They, too, came out with surprisingly tough recommendations in the areas of strategic forces, conventional force structure, procurement, research and development, personnel costs, reform of DoD maintenance and supply systems and command, support and infrastructure expenditures. Their report tackles the problems in DoD procurement and audit and says that the DoD has to fundamentally change the way they conduct their business. Perhaps, the results of this task force are so strong and cutting edge because one of the members of the task force is Winslow Wheeler from the Center for Defense Information, a fellow reform warrior from the 1980s fight who has seen it all. Maybe Representative Frank and Representative Paul can become the new Boxer/Grassley bipartisan team that did so well on reform in the 1980s.

Finally, among other reforms, DoD Secretary Robert Gates has also vowed to try to control costs by declaring that there are just too many officers for the troops, ships and planes, which lead to layers of bureaucracy (each general needs a flotilla of staff even if they don’t have enough troops or equipment to command). In the early 1980s, the Project on Military Procurement put out an officer inflation report, showing the officer corps greatly expanding after 1946, while troops, ships and planes were shrinking. POGO did a follow-up report in the 1990s showing that the problem was still there and getting worse. It will be interesting to see if Gates and his predecessor will seriously follow up on this and other reforms even though it is rumored that he will step down next year.

The defense bureaucracy and the defense contractors will be watching all of this carefully to see if there is a thirst for real reform or this is just another reform wave and begin to hunker down. It will be up to the administration and the Congress to make them see that it is serious this time. In a recent article in The Wall Street Journal, the head of one of the largest contractors, Lockheed, is showing nervousness as the DoD begins to squeeze them on the cost of the F-35 fighter. “Chairman and CEO Bob Stevens told reporters … the defense industry faces ‘a new reality’ as the Department of Defense launches a new effort to cut costs.” It will be interesting to see what happens when Lockheed goes crying to its friends in Congress and whether this powerful defense contractor will eventually get its money through lobbying and audit trickery. But it is a start.

I will be hopeful and happy to work on this next wave of trying to control and reform DoD spending, including trying to get the DoD to price weapons, not based on their wasteful and bloated past programs as historical costs for the new weapons, but on a “should cost” system that Boxer and Grassley required by legislation in the 1980s that was killed off by the DoD. But that is another long and detailed story for another time.

Because of my eternal optimism that the government can be reformed to work when people of determination are willing to fight for it, I will be starting a new column for Truthout this summer called “Solutions: Making Government Work.” I will be writing columns on solutions in all areas of the government working with my sources over the years, either on the record or off the record, to use their wisdom to make all parts of the government work. Other contributors will include Truthout contributors who would be interested in writing the column on a subject they have in-depth knowledge to offer solutions and people who have worked in the affected bureaucracies who have left the government and can write about realistic solutions to make real change.

If you think that you have a realistic solution to a problem in one of the government programs, you can contact me at [email protected] for the guidelines for submitting columns. After all these years of exposing problems, I look forward to once again finding solutions to prevent waste and fraud and making the government work.

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