Pentagon Thriving on Billion Dollar Quagmires

By JoeC

On the morning of September 10, 2001, then Secretary of Defense Donald Rumsfeld dropped a bombshell: "According to some estimates we cannot track $2.3 trillion in transactions.” He was speaking about the Pentagon, inside the Pentagon, to the employees of the Pentagon. And, by the next morning, September 11, his words were understandably forgotten.

Now, after almost seven years of improvements to its nightmarish accounting system, the Pentagon -- surprise -- still hasn't a foggy idea where its money goes.

For anybody paying attention to the game, it's clear the Pentagon only has one play in its playbook: Billion Dollar Quagmire.

Whether it's the first play from scrimmage, first-and-goal on the one inch line, or a no-questions punt situation, the Pentagon is going to settle into the pocket, borrow as many $billions as possible, and hurl the loot at the line of scrimmage. Chaos on the field. Game postponed indefinitely. Nobody wins, players forget which coach they play for, but everybody on the field is happy stuffing cold hard free cash in their socks.

More from the report at Conde Nast Portfolio:

Since 2004, the Pentagon has spent roughly $16 billion annually to maintain and modernize the military's business systems, but most are as unreliable as ever—even as the surge in defense spending is creating more room for error. The basic defense budget for 2007 was $439.3 billion, up 48 percent from 2001, excluding the vast additional sums appropriated for the wars in Iraq and Afghanistan. According to federal regulators and current and former Pentagon officials, the accounting process is so obsolete and error prone that it's virtually impossible to tell where much of this money ends up. While the department's brass has made a few patchwork improvements, billions are still unaccounted for. The problem is so deeply rooted that, 18 years after Congress required major federal agencies to be audited, the Pentagon still can't be.

And, because nobody can make sense of the mismanaged spaghetti-coded system, it's a dream for those "patriots" prone to fraud, waste, and abuse.

In 1990,Congress began requiring every federal agency to pass an independent audit each year. Its now 18 years later, and the Pentagon has not passed a single one of those audits. In 2002, Congress gave up and stopped requiring the Pentagon to do what it refused and was incapable of doing anyway.

Let me make an analogy: A teenager asks his parents for a $100 for a school project. The parents agree, but want to see the receipts. The teenager comes back and says he can't find the receipts, but the project has gone over budget and now he needs $500. Several months later, the teenager is asking for $100,000 a week for the school project. When asked, the teenager still can't produce any receipts. The parents shrug and fork over the $100,000 every week anyway.

In 1995, the Pentagon assured Congress it could be audited by 2000. When 2006 rolled around, the Pentagon said it might have its records straightened out enough to audit by 2016. That same year, two South Carolina sisters were caught charging the Pentagon $998,798 to ship two 19-cent washers to a military base in Texas. They'd been bilking the Pentagon for six years before being discovered.

How many more profiteers have gone, and remain, undetected? My guess? Too many to allow a stinking audit to derail the biggest gravy train ever.