Exclusively in the new print issue of CounterPunch
SHOCK AND AWE OVER GAZA — Jonathan Cook reports from the West Bank on How the Media and Human Rights Groups Cover for Israel’s War Crimes; Jeffrey St. Clair on Why Israel is Losing; Nick Alexandrov on Honduras Five Years After the Coup; Joshua Frank on California’s Water Crisis; Ismael Hossein-Zadeh on Finance Capital and Inequality; Kathy Deacon on The Center for the Whole Person; Kim Nicolini on the Aesthetics of Jim Jarmusch. PLUS: Mike Whitney on the Faltering Economic Recovery; Chris Floyd on Being Trapped in a Mad World; and Kristin Kolb on Cancer Without Melodrama.
Wasted at the Pentagon Fiscal Irresponsibility, Fraud and the Military-Terrorism Complex

Wasted at the Pentagon

by STANDARD SCHAEFER

The Bush administration recently shelved a report commissioned by the Treasury that shows the US currently faces a future of chronic federal budget deficits totaling at least $44,200bn in current US dollars . Shortly before this, the San Francisco Chronicle published a story about the Defense Department’s recent acknowledgement that it is missing over $1.3 trillion U.S. and that the Army lost track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. The DoD figure itself is old news, derived from at least seven years old according to reports from the General Accounting Office, but what made the story important was how little serious coverage of the Rumsfeld/Bush reform proposal there was.

The Defense Transformation for the 21st Century Act represents not just an assault on the working class and unionized labor, but also a cover-up of the fact that the Department of Defense’s effort to improve and modernize the Department of Defense accounting practices is at least ten years old, has itself cost at least a hundred million dollars and has produced no real results . In fact, the Department by its own admission has only begun to implement its plan to completely overhaul its financial management systems aggressively since 2002.

This raises several questions. First, given that many of Corporate America’s finest managerial minds have worked for the DoD, how is it that this reform process has been so thoroughly bungled? Second, could the missing tanks and planes be located in places like Poland, for example, or any of the other countries that the US bribed to join the "coalition of the willing"? The fraud in military spending is, of course, legendary, but what is not addressed is the mismanagement and how it quite possibly furthers America’s most covert foreign policies. Where is the assurance that this fraud and mismanagement is not another form of foreign aid? The last and most important question that must be asked, especially in light of the Bush Administration’s vehement efforts at curtailing social spending, is this: Does running up massive deficits through Corporate Welfare (in which the Department of Defense plays a major role serve the Neo-Con agenda. Is it not clear by now that Bush’s fiscal policies are largely meant to insure that his social policies will become inevitable? It is entirely reasonable that given the early criticisms of Bush’s plan to privatize security, he or his handlers have decided to demolish the "safety net" and thereby force so-called free-market solutions.

According to economist Paul Krugman, who also believes that Bush’s fiscal irresponsibility is a backhanded way to axe social spending, federal taxes will be lower than their average during the Eisenhower administration-when there was no Medicare and no Medicaid.-by the time this new tax cut takes effect. The tax-cut is purported to be $320 billion, but only through gimmickry; it will cost at least $800 billion.

Clearly there is no intention to maintain the current levels of social spending or healthcare.

Complicating and increasing the fiscal irresponsibility is the Treasury Department’s manipulation of the dollar. By supporting its 20% devaluation this year, the Treasury has in effect contributed to another form of corporate welfare that works like a hidden interest rate cut and only benefits US multinationals. The dangers of this include difficulty floating the national debt, provoking a trade war (Japan has already stepped into prop up the dollar and protect its industries) and potentially scaring off foreign investment which is crucial for holding up the treasury markets as well as the Wall Street. The upside for Republicans, in addition to increased profits, is that the federal government is unable to provide its grants to the states which results in higher unemployment. It also ruins the social safety net on the state and federal level simultaneously.

It is no wonder then that Bush administration has recently relocated The Council of Economic Advisers from literally next door to the president to a space blocks away. While the Council of Economic Advisers was intended to be an independent group of advisors, that is, an alternative to the Treasury Department, Bush’s advisors only parrot the Treasury.

Clearly, there is no room for intelligent economic discussion in this White House. But if Bush has a surplus of yes men, so many in fact that he cannot fit them all in the White House, maybe he could loan these bean counters to the Pentagon. After recently failing yet another GAO audit, they appear to have a lot of numbers to crunch. So far they have responded only by complaining a great deal about all the reporting they have to do to Congress, how it takes up so much time, cost so much money, requires too much man power, and so on.

This is part of the genius of The Defense Transformation for the 21st Century Act, also knows as Patriot Act II. It would get rid of 118 reports, some of which are truly redundant, others of which are clearly designed to hide costs. A curious aspect of this bill is the excuses it offers for not wanting to report things. The Defense Department claims that many of the reports are redundant and expensive to research. Is it just as expensive if not more not to keep track of high costs?

Look at a few spending reports that the DoD would like to axe. Gone would be the Report on the Costs of Stationing United States Armed Forces Outside the United States, for example. This they want not to report despite the biggest mobilization of solidiers since Vietnam. Also gone would be reports on acquisition costs that rise by more than 15% a year. Another report is supposed to inform Congress when these costs rise above 25% a year. (This is one area of the economy apparently immune to deflation and inflation).

It only gets worse. The reports are supposed to be cancelled to save money and manpower, but in addition to obscuring costs, the bill providse new opportunities for fraud and security threats. For example, one of the mildest problems with the bill is the proposal to do away with a report concerning the awarding of contracts to entities controlled by foreign governments. Stunningly, in stating their reason to kill this report, the DoD admited that it does not know which defense contractors are controlled by foreigners. This is even more outrageous given the fact that the DoD has been reporting to Congress on this very topic for years-it admits as much in the list of reports. There is a report, for example, on Chinese military companies operating in the US directly or through front companies. (Never mind that the Chinese have been spying on the US for years often through businessmen.) That such an ongoing series of reports exists would prove that the DoD has looked into the matter quite carefully, at least assuming that its personnel were trained for the task, something the General Accounting Office contends is not the case now and never has been.

Furthermore, it would be a good idea for the DoD to keep tabs on foreign contractors. We are, after all, paying these people to construct things for the troops to live in while abroad. We do not want foreign contractors like the Bin Laden family, for instance, to be getting this money. And then there are those pesky security questions that come into play.

After reading up on the GAO’s criticism of the Defense Department, I consulted a real expert on government documents, my favorite librarian, Daniel Cornwall, who has served in this capacity for the federal government. Needless to say, he has seen a lot federal documents in his days. As a result, he is familiar with the way reports that get cancelled can be used to stonewall against Congressional inquiries. It gives the DoD an excuse not to provide damaging information about itself. .

In fact, section 421 of the Defense Transformation for the 21st Century Act addresses the so-called "sunset" of recurring reports. It specifically requests that it no longer certain data for more than five years. But, Bush has repeatedly stressed that the War on Terrorism will last possibly for decades. Furthermore, this data is of enormous historical value and concerns the distribution of troops through certain regions as well gender and race, as Cornwall points out. I would add that the troop distribution data is particularly important because it reveals unauthorized military escalations. Anyone that doubts there is this potential should also note that one of the recurring reports is titled US Military Activities in Columbia, a report without which there would be almost no documented evidence of American involvement in the civil war there.

Other recurring reports the DoD would like to be unburdened from include ones concerned with the government’s school of terrorism, The Western Hemisphere Institute for Security Cooperation or the School of the Americas, as it was formerly named. Still others would alter the way the behavior of defense contractors abroad would be reported, especially relevant since the recent revelations on Bechtel’s role in Iraq. Bechtel, some will recall, is on record for sponsoring terrorists like Libya’s Qaddafi and helping in the overthrow of the Syrian government in 1949. Needless to say, this has complicated the American position in the Middle East somewhat.
In the same fashion, Defense would like to quit a report titled: Special Operations Forces Training with Friendly Foreign Forces. This is an expense report concerned with the deadliest soldiers in America’s arsenal and while it may not in itself prevent future occurrences such as the recent Afghan Massacre, it would provide clues as to what Special Ops are doing as they work with brutal human rights violators. But the DoD wants to quit this report under the auspices of cutting down accounting expenses rather than bill it as yet another cover-up.

Obviously the real way to cut down expenses is stop paying too much for things. On May 19th, 2003, however, the GAO released another report criticizing the Department of Defense for not training its personnel in how to properly keep costs down when negotiating with suppliers. Apparently, it is very hard to train Defense Department people to try to get the best price for things. Spending, after all, is patriotic, as George Bush reminded America when he tried to blame the economic slow down to the terrorist attack of September 11, 2001. On May 21, 2003, the GAO again reported on the DoD has failed to manage costs and inventories, that there was evidence that such mismanagement was actually delaying response capabilities of the airforce, and that nothing had been done to prevent the possibility of fraud.

It should be noted, however, that massive fraud is usually caused in part by the military contractors, and not just servicemen. Every major military contractor has been shown to have defrauded the DoD. Fraud on the part of military contractors benefits the private sector economy as form of corporate welfare, but it does so, as Krugman earlier showed, at the expense of the social welfare. Since the Defense Department seems interested mostly in eliminating external oversight, it remains the duty of the citizenry to stop the capitalist plundering of the Treasury.

Right now, for example, there is a bill in California based on three-strikes laws for individuals, but this one would apply to corporations. The corporate three-strikes law would cause corporations who have been shown to be involved in repeated criminal activity to lose their charters. It is a good bill and should be championed, but a federal bill along the same lines is needed.

A federal bill that would permanently bar these companies from doing business with any branch of the federal government is needed. So are laws ensuring that private companies such as Bechtel must be more forthcoming about the way they pursue business with the Defense Department. Currently, it appears, only the public companies receive much scrutiny.

That it has become "unpatriotic" to criticize Defense Department spending is a very serious issue not just because of the waste. It is not just the big rich or the military contractors who benefit from this waste. It is also the universities who receive massive funding for technology and medical research much of which should be funded by commercial industry-at least, it should be according to those fanatical fundamentalists known as free-market advocates, also known as Economic Council of Advisors, also known as the Treasury Department.

Beyond research funding, of course, universities profit from charitable donations from families of the Big Rich such as Bechtel, who donated the International Student Center at Stanford. It questionable whether or not these are even charitable donations since Stanford itself is has repeatedly contracted for construction work through Bechtel.

In addition to the universities themselves, the corporate sponsored economists who all benefit from the corruption of this system, there are the academic economists. Most academic economists warn of the dire financial consequences if funding to the military were somehow drastically curtailed. Very few are dedicated to studying how curtailing military spending could be compensated for by launching viable social programs that could be publicly funded, but independently and democratically controlled. In this regard, they are ethically in better a position than the corporate journalists who refuse to investigate the fraud and fiscal mismanagement within the Department of Defense. These journalists like their academic economist cohorts perpetuate the idea of degree inflation (the need for advanced degrees in order to be a properly accredited professional). They perpetuate the university system not as a site for research and intelligence, but as an intellectual vanguard mean to discredit serious social reform.

For all these reasons, it will be hard to disrupt the military-terrorism complex, but it should not be hard to defeat Rumsfeld’s attempt to turn the Defense Department into an Enron-like, off-the-books subsidiary. There is hope.

The Defense Transformation for the 21st Century Act, if passed, will cause so much damage in so many areas that there are many possible networks that could be organized to oppose it. Since it will hasten the demise of social security, there are the senior advocacy groups. Since it will threaten the environment by concealing pollution reports and relaxing emission standards, there are environmental lobbies. Since it will quash studies into the health effects burning oil fumes inhaled by soldiers, one possible cause of Gulf War Syndrome, there are the veteran groups. Even the conservative veteran groups should be sensitive to the threats posed to the lives of service personnel from other aspects of the bill. Existing progressive institutions like Peace Action, Veterans for Peace, the Green Party, and so forth must coordinate not only with their own kind, but also reach out to the conservatives who oppose fiscal irresponsibility.

The key is to approach these groups on the issue of waste and not moral accountability alone. The progressives must be careful not to appear to be threatening "national security," a difficult task considering how widely the label applies these days. They must also avoid being seen as simply trying to bash the military out of economic resentment.

But the progressives cannot pussyfoot around either. There are investigations that need to be done. Not just Dick Cheney and Danny Perle, Rumsfeld himself has many potential conflicts-of-interest given his extensive wealth, much of which is tied to the pharmaceutical industry-a major beneficiary of grants from DoD’s Defense Advanced Research Projects Agency. (DARPA, as the agency is called, does no research of its own-it exclusively finances.) Nearly everyday, it seems, nearly everyone in the Bush administration is revealed to have potential conflicts-of-interest and everyone one of them deserves to be investigated.

When they stonewall behind lawsuits, I propose we stick the librarians on them. In general, I find librarians to be much more well-informed and reasonable people than members of the Department of Defense. They, with a few exceptions at GAO, are about the only government employees that can be trusted these days.

STANDARD SCHAEFER is an independent economic journalist, cultural historian, literary critic, award-winning poet and short fiction writer. He is the fiction and the non-fiction editor of the New Review of Literature. Despite the ignominy of possessing a Master’s Degree in Professional Writing, he has accrued other, more repectablel credentials such as a wallet-sized copy of the Bill of Rights, a cable-modem, and several library cards. He can be reached at ssschaefer@earthlink.net