The Washington Post has revealed that the Pentagon hid $125 billion in wasteful spending because officials feared Congress would use the evidence “to slash the defense budget.”
The study started with good intentions. Deputy Defense Secretary Robert O. Work wanted the Defense Business Board to operate the study in order to become “more efficient and reinvest any savings in combat power.” But Work immediately changed his mind when the board presented its findings.
The Washington Post reported (emphasis mine):
The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.The study was produced last year by the Defense Business Board, a federal advisory panel of corporate executives, and consultants from McKinsey and Company. Based on reams of personnel and cost data, their report revealed for the first time that the Pentagon was spending almost a quarter of its $580 billion budget on overhead and core business operations such as accounting, human resources, logistics and property management.
The Pentagon paid 1,014,000 contractors, civilians, and uniformed personnel for desk jobs at the Pentagon to support only 1.3 million troops on active duty, which is “the fewest since 1940.”
The Defense Business Board wanted to help the Pentagon save $125 billion to help troops and weapons, especially “to rebuild the nation’s aging nuclear arsenal, or the operating expenses for 50 Army brigades.”
Despite the good that could come out of the study, those in charge buried it:
But some Pentagon leaders said they fretted that by spotlighting so much waste, the study would undermine their repeated public assertions that years of budget austerity had left the armed forces starved of funds. Instead of providing more money, they said, they worried Congress and the White House might decide to cut deeper.So the plan was killed. The Pentagon imposed secrecy restrictions on the data making up the study, which ensured no one could replicate the findings. A 77-page summary report that had been made public was removed from a Pentagon website.“They’re all complaining that they don’t have any money. We proposed a way to save a ton of money,” said Robert “Bobby” L. Stein, a private-equity investor from Jacksonville, Fla., who served as chairman of the Defense Business Board.Stein, a campaign bundler for President Obama, said the study’s data were “indisputable” and that it was “a travesty” for the Pentagon to suppress the results.
But the study does not surprise me at all. I reported in August that the Pentagon had not audited $6.5 trillion it spent on wars and equipment due to horrible bookkeeping practices. The Defense Finance and Accounting Service “did not document or support why the Defense Departmental Reporting system-Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015.”
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