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June
2, 2003
Wasted at the Pentagon
Fiscal
Irresponsibility, Fraud and the Military-Terrorism Complex
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
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