But How Will We Pay For It?
November 30, 2018 11:00 AM   Subscribe

“Now, a Nation investigation has uncovered an explanation for the Pentagon’s foot-dragging: For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year, according to government records and interviews with current and former DoD officials, congressional sources, and independent experts.” Exclusive: The Pentagon’s Massive Accounting Fraud Exposed (The Nation)
posted by The Whelk (46 comments total) 62 users marked this as a favorite
 
Uh ohhhhhhhhhhhhhhhhhh!
posted by Krazor at 11:06 AM on November 30 [1 favorite]


So the smart thing to do would be to give them zero money for a year. I bet they'd figure it out real fast.
posted by mephron at 11:06 AM on November 30 [22 favorites]


Oh so we're not actually spending 10x the rest of the world in military expenditures? And if so, just how much ARE we spending compared to them? 5x? 2x?
posted by symbioid at 11:10 AM on November 30 [9 favorites]


We have always been at war with Ourselves
posted by kokaku at 11:11 AM on November 30 [17 favorites]


Jesus Christ.
posted by Automocar at 11:14 AM on November 30 [3 favorites]


Remember when VP Al Gore went on Letterman and talked about how expensive the "ash receivers" (aka "ashtrays") were? *sigh*
posted by Room 641-A at 11:19 AM on November 30 [1 favorite]


My outrage reserves are exhausted.
posted by suelac at 11:20 AM on November 30 [19 favorites]


Oh so we're not actually spending 10x the rest of the world in military expenditures?

No, it's worse than that. We're spending that much, we just don't know what on.
posted by tobascodagama at 11:21 AM on November 30 [45 favorites]


No, we are spending it. The question is who is collecting it, and what are we getting for our dollars.
posted by fings at 11:21 AM on November 30 [10 favorites]


This is a truly horrifying read.
posted by stoneweaver at 11:24 AM on November 30 [3 favorites]


Oh, hey—this seemed somehow familiar... turns out we went down this road almost 10 years (plus a few months) ago! Great to see such improvement! (facepalm)

Anyway, though I think the general thesis is correct, there are some details in the linked article (the 2018 one) that make me wonder if the author is really familiar with the subject matter, though, or was thoroughly fact-checked. Transferring money among government agencies, which they describe as "“Nippering,” a reference to a sharp-nosed tool used to snip off bits of wire or metal"... what? No, just... no.. It's MIPR, pronounced "mipper", and it stands for "Military Interdepartmental Purchase Request". (NIPR is a DoD acronym, but means something totally different. You don't NIPR money.)

But yeah—"plugging" is a thing. And in other contexts it would probably be called other things, possibly "fraud" or "the reason your father had to go live in Cumberland for a while". Here's a discussion of the "grand plug" aka the Pentagon 'reconciliation' process, from someone who has seen the inside of the sausage factory:
Q: If all those sources of information are faulty, how can modern auditors balance the ledgers?

They don’t! A former colleague of mine - probably the most knowledgeable auditor in charge of compiling DOD financial statements - referred it as the grand plug. There are all these adjustments that are made to the Department of Defense financial report in order to make it line up with budget reports, the two don’t actually match on their own.

The Army and Defense Agencies, the two largest problem areas, has systems that take in data and uses it to populate budgetary data, budgetary reports and stuff like that. At the same time, it’s also populating the DOD accounting ledger and they take the information from the budgetary and force the general ledger data against it without ever knowing if either one is correct.
There's agreement on what this means, though:
Q: Do you think that there are some hidden incentives in place that are dissuading DOD from taking on these accounting issues? Does it help protect their budget?

Yes, it does. In the world of Congressional appropriations there’s a thing called the “expired appropriation.” And once the appropriation hits that date funds can’t be obligated or spent. The caveat to this is when their accountants can find an old error, or a cost that was not recorded properly. In those cases, they can bill current expenses against the old expired appropriation act. They’ll go back years and say “hey, this charge from 2012 never went out, that means we can use the money now.” Essentially, the dysfunctional accounting status quo allows them to squeeze more money out of the system.
posted by Kadin2048 at 11:26 AM on November 30 [24 favorites]


If only we had heeded that warning 50 years ago about the military-industrial complex from that guy, who must have been a commie pinko liberal to say such a thing about our brave military, lemme see whatshisname (checks notes) Dwight Eisenhower.
posted by RobotVoodooPower at 11:27 AM on November 30 [52 favorites]


Surely this...
posted by sleeping bear at 11:32 AM on November 30 [6 favorites]


Me, topless with a yellow scarf overlooking a bunch of rusting tanks and planes that nobody asked but hey, had to be built because those bonuses for Raytheon, Northrop and General Dynamics executives have to be paid somehow:

I love the smell of capitalism in the morning.
posted by lmfsilva at 11:33 AM on November 30 [4 favorites]


kokaku: "We have always been at war with Ourselves our accountants"

FTFY
posted by chavenet at 11:33 AM on November 30 [1 favorite]


We could fund single-payer healthcare with the money that disappears alone. How, again, did Republicans con the American people into thinking they're the fiscally responsible ones?
posted by explosion at 11:37 AM on November 30 [37 favorites]


In a sane world this would mean the end for the military-industrial complex but I am not gonna put money on that happening any time soon.
posted by terretu at 11:40 AM on November 30 [3 favorites]


Bet it's not alien related.

President Thomas Whitmore: I don't understand, where does all this come from? How do you get funding for something like this?

Julius Levinson: You don't actually think they spend $20,000 on a hammer, $30,000 on a toilet seat, do you?

Independence Day
posted by markx2 at 11:53 AM on November 30 [13 favorites]


the Pentagon receives 54 cents out of every dollar in federal appropriations

But your crazy Republican uncle is sure a couple of meals for a poor person is bankrupting the country.
posted by COD at 11:56 AM on November 30 [30 favorites]


Cut their budget 10% every year until they have open transparent budgets that are actually followed and tracked. Publicly. Or go higher, 25% might motivate them. Make the pain of not accounting things properly outweigh the benefits.
posted by PennD at 12:00 PM on November 30 [3 favorites]


Will Trump care?
posted by TwelveTwo at 12:05 PM on November 30 [1 favorite]


I came here to post what Kadin2048 posted. I'm not disagreeing with the overall conclusion, but such a glaring error - mishearing "MIPRing" for "nippering," and then coming up with a fake etymology for the misheard term, really undercuts the writer's credibility.
posted by ereshkigal45 at 12:07 PM on November 30 [5 favorites]


But your crazy Republican uncle is sure a couple of meals for a poor person is bankrupting the country.

And the Democratic one is sure that aggressive left-wing reform would bankrupt it.
posted by Rustic Etruscan at 12:07 PM on November 30 [6 favorites]


Cut their budget 10% every year until they have open transparent budgets that are actually followed and tracked. Publicly. Or go higher, 25% might motivate them. Make the pain of not accounting things properly outweigh the benefits.

Fuck that. Disband the entire military apparatus. Guarantee everyone who works for the military a federal job doing something, like helping rebuild all of our crumbling infrastructure.
posted by runcibleshaw at 12:19 PM on November 30 [14 favorites]


"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."
posted by SansPoint at 12:27 PM on November 30 [2 favorites]


Disband the entire military apparatus.

But what if--

*checks enemies list*

--Saudi Arabia tries to invade
posted by suetanvil at 12:29 PM on November 30 [2 favorites]


the Pentagon receives 54 cents out of every dollar in federal appropriations

There's a yes, but factor here, which depends if you're talking mandatory spending or discretionary. Combine the two and Health Care (Medicare, Medicaid) takes 27 cents per dollar, whereas the War Department share goes down to 16 cents.

Still too high, of course, but it's hard to find a congressman who doesn't have a pet project in his district with ties to the MIC. Electric Boat down the road from where I live is expanding to three subs a year, and the state, which has been sagging in recent years, is happy for the money.

Big picture, though, neither party has anything to brag about on this issue. The discretionary percentages were about the same, or even higher, under Obama.
posted by BWA at 12:33 PM on November 30 [3 favorites]


How, again, did Republicans con the American people into thinking they're the fiscally responsible ones?

Because they're the ones giving it to white people?
posted by Kadin2048 at 12:37 PM on November 30 [3 favorites]


How do other countries handle this problem?
posted by Agent_X_ at 12:39 PM on November 30 [1 favorite]


First, the fact that Pentagon accounting is majorly messed up is not news. I don't know enough about it to know if any of the details in the article are actually new.

Second, if they actually are taking unspent one-year money and transferring it to multi-year accounts, that's a problem. But it doesn't mean that they are spending more money than they said they were, just that they are spending more money than is allowed by law (a serious but different issue). And if they are transferring unspent money, that means they didn't spend the money in the first place. So sentences like "Congress appropriated $122 billion for the US Army. Yet DoD financial records for the Army’s 2015 budget included a whopping $6.5 trillion (yes, trillion) in plugs" appear nonsensical.

E.g., Dad gives you $20 for movies and popcorn and tells you to give him the change. You lie, say you spent it all, and keep the real $2 in change. Then the next time you go to the movies, you get $20 and spend $22. Not good, but Dad is still out $40, which he already knew.
posted by Mr.Know-it-some at 12:44 PM on November 30 [2 favorites]


Still too high, of course, but it's hard to find a congressman who doesn't have a pet project in his district with ties to the MIC

So switch to the non-military industrial complex. Give incentives to companies to develop civilian technologies. 99% of the jobs at Lockheed probably have transferable skills. Companies can shift gears if they're forced to.

The key is making it clear that the choice isn't "missiles or nothing" but "nothing or space rockets," and they'll start clamoring to work for NASA instead of lobbying for military spending.
posted by explosion at 12:48 PM on November 30 [5 favorites]


This pisses me off to no end because at NASA our budgets are use-it-or-lose-it. Near the end of the fiscal year if there's any money left in the budget they'll ask us to not wait to make any purchases for the project, because we lose any money not spent in the fiscal year. But the fucking Department of Defense gets to essentially claim they spent all the money, so they can roll it over to the next year when they'll be allocated even more money? I'm more livid the more I think about it.

(I do also feel weird and slightly ashamed about how much crossover there is between military and space applications in terms of technology and personnel.)
posted by runcibleshaw at 12:50 PM on November 30 [16 favorites]


E.g., Dad gives you $20 for movies and popcorn and tells you to give him the change. You lie, say you spent it all, and keep the real $2 in change. Then the next time you go to the movies, you get $20 and spend $22. Not good, but Dad is still out $40, which he already knew.

More like, Dad gives you $20, you spend $15, keep the change, tell him you need $25 next time, and spend $15 and keep that change, and then tell him you need $30....

Dad would have spent $45 in my scenario, but you told him you needed $75, so you've just got a slush fund (plugs) of $30 now that Dad is only now hearing about after 11 years of no movie audits.
posted by explosion at 12:52 PM on November 30 [14 favorites]


I know they're not tied together, but somehow this is all the more insulting that Veterans Affairs Dept. tells congressional staffers it won't repay underpaid GI Bill benefits recipients, sources say (Phil McCausland for NBC News, Nov. 28, 2018)
For weeks, student veterans across the country have raised an alarm about delayed or incorrect GI Bill benefit payments, which the Department of Veterans Affairs has blamed on computer issues.

But on Wednesday, the department told congressional staffers that it would not reimburse those veterans who were paid less than they were owed, two committee aides told NBC News.

The news conflicts with a promise VA officials made to a House committee earlier this month that it would reimburse those veterans who received less than the full amount they were due.

According to the aides, however, the VA said it could not make retroactive payments without auditing its previous education claims, which it said would delay future claims. The aides asked not to be identified because they were not authorized to speak publicly.
...
The reason the VA decided that it would not make the retroactive payments is because it would have to audit all its previous education claims prior to December 2019, meaning the VA would potentially have to inspect 2 million claims, the aide said.
Nooo, let's not ensure that veterans get the benefits they're owed because someone might be perpetrating fraud, but instead, let's funnel unknown amounts of money into unknown projects.
posted by filthy light thief at 12:55 PM on November 30 [18 favorites]


"I'm sorry, we can only cook the books in our own favor."
posted by runcibleshaw at 1:05 PM on November 30 [4 favorites]


Just remember this will all be dressed up as 'failure of government' and be brandished about by the next wave of Republicans

(or whatever Trump's party is...are we calling them 'fascists' yet? I feel like the political center of gravity is more kleptocratic than fascistic)
posted by Reasonably Everything Happens at 1:32 PM on November 30 [1 favorite]


Let's see, steal from the poor, give to the rich...

How about klepto-fascist?
posted by evilDoug at 1:36 PM on November 30 [3 favorites]


Reverse Robin Hood... Doohnibor...
posted by oneswellfoop at 2:31 PM on November 30 [3 favorites]


This pisses me off to no end. Thinking about all the humanitarian causes that could have been funded by this stolen money puts me into a deep funk. All to pay enormous amounts of money to defense contractors. Fuck them all. I want public executions for their execs. Gah, I'm a half-step from complete incomprehensibility I'm so angry. I must make a cuppa and sit down with my cat in the comfy chair and discuss this with her. She's a good egg, she'll come up with something, I just know it.
posted by Purposeful Grimace at 2:47 PM on November 30 [11 favorites]


She's a good egg, she'll come up with something, I just know it.

Puking in their shoes is a classic. They’ll find that.
posted by GenjiandProust at 2:53 PM on November 30 [12 favorites]


On the bright side, the VA is going back on their screwjob and paying veterans.
posted by mephron at 3:42 PM on November 30 [3 favorites]


Oh so we're not actually spending 10x the rest of the world in military expenditures?

No, we are, we're just getting airplanes that can't fly in the rain, destroyers without guns, aircraft carriers without catapults, that sort of thing

It's like, a dada military industrial complex
posted by Ray Walston, Luck Dragon at 3:43 PM on November 30 [16 favorites]


MetaFilter: a dada military industrial complex
posted by mephron at 4:01 PM on November 30 [2 favorites]


"...Sherwood wrote, adding that any such transfers amounting to more than 1 percent of the official DoD budget would require approval by “all four defense congressional committees.”

THEY MIGHT SEE THE BIG DARTBOARD
posted by clavdivs at 4:43 PM on November 30 [2 favorites]


Here's the secret:

Accounting stops working.

A line item for a pill of Tylenol at $100, is a lie. To the field's credit, it is well aware and open about the existence of accounting fictions. But fiction it is -- if not providing the Tylenol, will not save $100, then it is not and never was a $100 Tylenol.

However, by integrating overhead into the equation, *Tylenol* looks bad. People *literally* experience pain, because *overhead* has not been line item accounted for.

So the resolution seems to be, on some time scale, lie about he pill today, get the real waste itemized out tomorrow. And then, by some miracle, the bad stuff won't fight as hard to survive, and the system will become more efficient.

Anyway, that's the theory. Reality is more complicated.
posted by effugas at 7:02 AM on December 1 [2 favorites]


(Put another way, it's collective punishment. Tylenol didn't do anything, but the system bets it does, and thinks *they*, or those prescribing it, will find the bad actors for them. This is not 100% wrong.)
posted by effugas at 5:19 AM on December 2


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