THE WAR ON WASTE - Rumsfeld Says 2.3 Trillion Dollars Missing

On Sept. 10, Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, "the adversary's closer to home. It's the Pentagon bureaucracy," he said.

Rumsfeld promised change but the next day – Sept. 11-- the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten.

Just last week President Bush announced, "my 2003 budget calls for more than $48 billion in new defense spending."

More money for the Pentagon, CBS News Correspondent Vince Gonzales reports, while its own auditors admit the military cannot account for 25 percent of what it spends.

"According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted.

$2.3 trillion — that's $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.

"We know it's gone. But we don't know what they spent it on," said Jim Minnery, Defense Finance and Accounting Service.

Minnery, a former Marine turned whistle-blower, is risking his job by speaking out for the first time about the millions he noticed were missing from one defense agency's balance sheets. Minnery tried to follow the money trail, even crisscrossing the country looking for records.

"The director looked at me and said 'Why do you care about this stuff?' It took me aback, you know? My supervisor asking me why I care about doing a good job," said Minnery.

He was reassigned and says officials then covered up the problem by just writing it off.

"They have to cover it up," he said. "That's where the corruption comes in. They have to cover up the fact that they can't do the job."

The Pentagon's Inspector General "partially substantiated" several of Minnery's allegations but could not prove officials tried "to manipulate the financial statements."

Twenty years ago, Department of Defense Analyst Franklin C. Spinney made headlines exposing what he calls the "accounting games." He's still there, and although he does not speak for the Pentagon, he believes the problem has gotten worse.

"Those numbers are pie in the sky. The books are cooked routinely year after year," he said.

Another critic of Pentagon waste, Retired Vice Admiral Jack Shanahan, commanded the Navy's 2nd Fleet the first time Donald Rumsfeld served as Defense Secretary, in 1976.

In his opinion, "With good financial oversight we could find $48 billion in loose change in that building, without having to hit the taxpayers."

"How do we know we need $48 billion since we don't know what we're spending and what we're buying?"
Retired Vice Admiral Jack Shanahan

I'm in the military and my unit spends many millions of dollars a year. Our biggest problem is that we no longer have the people to manually track items and our automated systems don't talk to each other (which means that they aren't automated). Consequently, when a person doesn't keep the proper records it isn't discovered for a while, then it is usually too late to track where it went. I cannot tell you the frustration of keeping paper records and reentering information because our IT systems are clumsy and don't talk to each other.

If you really want to discover waste, look at what is purchased. Don't look for $400 hammers and $1500 coffee makers; those are actually valid purchases (the $400 hammer is a special non-ferrous tool for bomb disposal and the coffee maker is a no-spill for long distance planes (the airlines actually were spending more for the same thing).). Instead, look at the prices for things like electronic parts and repair parts for our machines. This is because the buyer doesn’t know the true value of the item and doesn’t realize the govt is being overcharged.

When are people going to start realizing the there is no such a thing as balanced books in the Federal government? I have been involved in getting to the bottom line on two different departments. It is an impossibility because they don't keep books. I repeat again, they don't keep books.

The Admiral Shanahan has it exactly right. If the government doesn't keep accounts, how do they know how much they need for a department? The reason Rumsfield is looking for 2.3 trillion dollars is because they don't keep accounts. I say again, they don't keep accounts, period.

Another thing that most people don't know, the Federal Reserve does not keep accounts. I repeat, the Federal Reserve does not keep accounts such as your local bank does. You send your tax dollars into the bottomless pit called the Federal Reserve. They shovel out the checks for the government accounts as they are requested.

The Federal Reserve does not keep account of the various departments. I repeat, the Federal Reserve does not keep accounts of the various departments. The only conclusion that can be made is that our tax and budget process is one big scam.

Where do you think Arthur Andersen learned his accounting methods? He uses these methods in his work for the Federal government. He is the largest accounting contractor for the Federal government. Wake up America, you see in the Enron debacle. our monetary and tax system.

trying to save money from the inside is nearly impossible. The government culture is to not be accountable for anything. Someone being held responsible? No, no one can be responsible.

The only firm rule and requirement is that you do not endanger your or anyone else's swimming pool. No matter what, or you get fired.

Republic - the whistleblowers get fired. I know, I was one.

bttt rowdee - - The WAR ON WASTE.....the one war no politician or bureaucrat will ever WAGE! 13 posted on 2/1/02 4:09 PM Pacific by Rowdee

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weikel - "I wonder how much the civilian parts steal given that the military is more honest in most respects." 8 posted on 2/1/02 4:02 PM Pacific by weikel

I worked both civilian and military, and I agree. But, there is not so much corruption as just plain laziness and incompetence, and it's not my business.

FBI Spends Millions Buying Dossiers On Almost All American Adults

Attorney General John Ashcroft Picks Arthur Andersen For FBI Review

Requiem for Enron
Regarding Kenneth Lay: "First, founders of companies don't tend to ignore what's going on with their babies and, second, he knows all about accounting practices," says a Wall Street banker who spoke on condition of anonymity. In fact, the 59-year-old Enron chairman studied economics at the University of Missouri, earned a doctorate in the subject and, as a naval officer serving in the Pentagon worked to develop more efficient accounting systems. Lay also served as an aide to a federal-government regulator for the natural-gas industry."

"Arthur Andersen" has 64 contracts covering a range of consulting services

Pentagon Auditors Get Poor Grade in Examination

Associated Press
By Larry Margasak
December 5, 2001

WASHINGTON (AP) - The agency that investigates fraud and abuse inside the Pentagon is getting a poor grade after it was caught cheating on a review of its own performance.

The Pentagon inspector general's office was subjected to an intensive audit this fall after discovery that the watchdog office destroyed internal documents, and created new ones, to win a favorable grade in a previous check of its work.

The discovery invalidated the previous review, which had given the office a passing grade.

In the new review, also called a "peer review," federal investigators gave the Pentagon a "qualified opinion," the second-lowest rating a federal inspector general can receive.

The review found the agency didn't always follow proper auditing procedures and raised new questions about its paperwork, noting some investigative documents were prepared or changed after the fact.

"If working papers are added or changed after a report is issued, they may no longer support the issued report or clearly support the auditor's conclusions and judgments," the review said.

The review said the Pentagon agency had a subpar performance in planning audits, documenting its conclusions and, in one instance, allowing an auditor to review a program in which he directly participated.

The Defense Department's deputy inspector general, Robert Lieberman, said his agency is correcting the problems, and a new computer program will avoid many of the mistakes.

"A lot of these things are not show-stoppers in terms of the accuracy of the (audit) reports themselves," Lieberman said. "The peer review is concerned with procedures rather than results."

Lieberman would not discuss the document destruction, revealed by a whistle-blower and confirmed by an internal report.

Inspector general offices are installed inside federal agencies as internal watchdog to investigate fraud, waste and abuse and to audit financial statements, a massive task in the Pentagon, which spends some $300 billion a year.

President Bush has nominated Joseph Schmitz to be the Defense Department's new inspector general. He has not been confirmed by the Senate.

"Once President Bush's nominee for the IG job is in place, he will need to clean house from top to bottom. Heads must roll," said Sen. Charles Grassley, R-Iowa, a frequent critic of the Pentagon audit agency.

Federal audit guidelines could have justified an adverse rating, the lowest possible, had the review identified similar deficiencies in all aspects of the Pentagon's inspector general operations. The agency was spared that grade because the problems were discovered in only two of its four audit divisions.

GAO lays down the law: auditors of agencies can’t be consultants

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