Pentagon Audit: Evidence Proving $21 Trillion Unaccounted For – Opening Statement

Editor’s Note: This post features a collection of evidence proving that trillions of our tax dollars are unaccounted for and the U.S. Constitution is being violated. The following is an adapted excerpt from David DeGraw’s investigative series: Global War Profiteers Vs. The People of the United States. You can download the full 88-page report in PDF format for an amount of your choosing here.

OPENING STATEMENT

According to United States government documents, since 1998, the Office of the Inspector General has reported $21 Trillion in unaccounted for money.

As unbelievable and absurd as that sounds, the actual total of unaccounted for money at the Pentagon is most likely significantly more than $21 trillion.

Researchers are unable to get data for every year of military spending, many Pentagon agencies do not have any publicly available records, hundreds of thousands of transactions have been erased, and an estimated millions of transactions do not have any traceable record.

As you will see in detail throughout this series of reports, not only have trillions of taxpayer dollars been knowingly dumped into a shockingly unaccountable black hole, Congress is not even sure how much money has been appropriated and given out in the first place.

United States government officials who work for the Defense Finance and Accounting Service (DFAS), the Office of the Inspector General (OIG) and the Government Accountability Office (GAO) have been reporting on this stunning issue for years.

The fact that this mind-blowing amount of missing tax money has not been a lightning rod for mainstream media coverage, congressional investigations, and a lead issue for all political representatives, particularly those who claim to care about our skyrocketing national debt, calls into serious question the integrity and legitimacy of all leadership and responsible parties.

Beyond the outright disregard for the rule of law and lack of consequences for ignoring an annual audit legal requirement, the Pentagon is also flagrantly in violation of the U.S. Constitution.

The U.S. Constitution in Article I, Section 9, Clause 7 specifically states:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

Judiciary-Committee-1

“Condemnation without investigation
is the height of ignorance.”

~ Albert Einstein

Documentary Evidence

EXHIBIT A: 26 Inspector General Reports Revealing $21 Trillion Unaccounted For

The United States Department of Defense (DoD) Inspector General (IG) is an independent agency that provides oversight of DoD programs and operations.

“The office’s mission is to promote integrity, accountability, and improvement of Department of Defense personnel, programs and operations to support the Department’s mission and serve the public interest.”

The Inspector General “combats fraud, waste and abuse in the Department of Defense by conducting audits, investigations and evaluations.”

IG Report 1 of 26:
$6.5 Trillion Unaccounted For, Army General Fund

DOD-IG-Report-1

* See below for a complete archive of Inspector General reports.

EXHIBIT B: DFAS Statements, Accounting Fraud as DoD Standard Operating Procedure

The Defense Finance and Accounting Service (DFAS) — referenced in EXHIBIT A Inspector General Report #1 — is the Pentagon’s main accounting agency. It is the world’s largest finance and accounting operation.

As a Reuters Investigation revealed, Linda Woodford, while working at DFAS, “spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense’s accounts.”

“Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from. Woodford says, ‘We didn’t have the detail… for a lot of it.’”

“Woodford and her colleagues were told by superiors to take ‘unsubstantiated change actions’ – in other words, enter false numbers, commonly called ‘plugs,’ to make the totals match the Treasury’s.”

“Jeff Yokel, who spent 17 years in senior positions in DFAS’s Cleveland office before retiring, says supervisors were required to approve every ‘plug’ – thousands a month.”

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United States Department of Defense – Defense Finance and Accounting Service Special Agent Badge

DoD Standard Operating Procedure

“At the DFAS offices that handle accounting for the Army, Navy, Air Force and other defense agencies, fudging the accounts with false entries is standard operating procedure, Reuters has found.

And plugging isn’t confined to DFAS. Former military service officials say record-keeping at the operational level throughout the services is rife with made-up numbers to cover lost or missing information.

A review of multiple reports from oversight agencies in recent years shows that the Pentagon also has systematically ignored warnings about its accounting practices.

‘These types of adjustments, made without supporting documentation… mask much larger problems in the original accounting data,’ the Government Accountability Office, the investigative arm of Congress, said.

Plugs also are symptomatic of one very large problem: the Pentagon’s chronic failure to keep track of its money – how much it has, how much it pays out and how much is wasted or stolen.”

Deputy Marshals Teen Shot

Here’s a short video excerpt from PBS featuring a Bill Moyers interview with Chuck Spinney, a former Air Force Lieutenant and longtime Pentagon analyst specializing in military spending. Spinney has given legendary reports on military spending to Congress and was called “the conscience of the Pentagon” by Judiciary Committee Chairman Senator Chuck Grassley.

EXHIBIT C: Congressional Statements on Accounting Crisis at the Pentagon

As Judiciary Committee Chairman Senator Chuck Grassley (R-IA) said in a recent speech on the United States Senate floor:“A monster is lurking in the weeds. And nobody wants to talk about it…. They are red flag accounting issues listed in DoD reports for years…. 26-years of hard-core foot-dragging shows that internal resistance to auditing the books runs deep.”

Former Senator Tom Coburn (R-OK), who sponsored the Audit the Pentagon Act of 2012, one of many failed and/or ignored attempts to bring accountability, summed up the situation by saying:“The Pentagon can’t manage what it can’t measure, and Congress can’t effectively perform its Constitutional oversight role if it doesn’t know how the Pentagon is spending taxpayer dollars.

Until the Pentagon produces a viable financial audit, it won’t be able to effectively prioritize its spending, and it will continue to violate the Constitution and put our National Security at risk.”

Senator Ron Wyden (D-OR), Ranking Member of the Senate Finance Committee and a sponsor of the most recent Audit the Pentagon Act of 2015, recently stated:

“The Senate voted to increase military spending…. I was one of only eight members of the Senate who voted ‘No’ on this bill. Why? One of the reasons was because we don’t know where this money goes since the Pentagon has never had an audit.”

Congresswoman Barbara Lee (D-CA) didn’t pull any punches either:

“It is disgraceful that Congress has poured trillions upon trillions of taxpayer dollars into an agency that refuses even the most basic measure of accountability.”

Subcommittee Chairman on Federal Spending Oversight Senator Rand Paul (R-KY) recently expressed his frustration with the Pentagon’s accounting crisis by saying:

“The department charged with carrying out our greatest constitutional responsibility has set the lowest possible standard for accountability.”

EXHIBIT D: Summary of DoD Office of the Inspector General Audits of Financial Management

These highlights from the DoD Inspector General “Summary of DoD Office of the Inspector General Audits of Financial Management” are excerpted from The Pentagon Labyrinth, 10 Short Essays to Help You Through It. It was written by, “10 Pentagon Insiders, Retired Military Officers and Specialists With Over 400 Years of Defense Experience.”

The section featured here is from Essay #8, Decoding the Defense Budget: The Ultimate in Cooked Numbers, by Winslow T. Wheeler:

• The financial management systems DOD has put in place to control and monitor the money flow don’t facilitate but actually “prevent DOD from collecting and reporting financial information… that is accurate, reliable, and timely.” (p. 4)

• DOD frequently enters “unsupported” (i.e. imaginary) amounts in its books (p. 13) and uses those figures to make the books balance. (p. 14)

• Inventory records are not reviewed and adjusted; unreliable and inaccurate data are used to report inventories, and purchases are made based on those distorted inventory reports. (p. 7)

• DOD managers do not know how much money is in their accounts at the Treasury, or when they spend more than Congress appropriates to them. (p. 5)18

• Nor does DOD “record, report, collect, and reconcile” funds received from other agencies or the public (p. 6),

• DOD tracks neither buyer nor seller amounts when conducting transactions with other agencies. (p. 12)

• “The cost and depreciation of the DOD general property, plant, and equipment are not reliably reported….” (p. 8);

• “… the value of DOD property and material in the possession of contractors is not reliably reported.” (p. 9)

• DOD does not know who owes it money, nor how much. (p. 10.)

It gets worse; overall:

• “audit trails” are not kept “in sufficient detail,” which means no one can track the money;

• DOD’s “Internal Controls,” intended to track the money, are inoperative. Thus, DOD cost reports and financial statements are inaccurate, and the size, even the direction (in plus or minus values), of the errors cannot be identified, and

• DOD does not observe many of the laws that govern all this.

It is as if the accountability and appropriations clauses of the U.S. Constitution were just window dressing, behind which this mind-numbing malfeasance thrives. Technically, this is a violation of the Anti-Deficiency Act, a statute carrying felony sanctions of fines and imprisonment.

Congress and the Pentagon annually report and hold hearings on DOD’s lack of financial accountability and sometimes enact new laws, but many of the new laws simply permit the Pentagon to ignore the previous ones; others are eyewash.

If you have a system that does not accurately know what its spending history is, and does not know what it is now (and does not care to redress the matter), how can you expect it to make a competent, honest estimate of future costs?

It is self-evident that an operation that tolerates inaccurate, unverifiable data cannot be soundly managed; it exempts itself from any reasonable standard of efficiency.

Recall, also that the errors in cost, schedule and performance that result are not random: actual costs always turn out to be much higher than, sometimes even multiples of, early estimates; the schedule is always optimistic, and the performance is always inflated.

The Pentagon, defense industry and their congressional operatives want – need – to increase the money flow into the system to pretend to improve it.

Supported by a psychology of excessive secrecy, generated fear and the ideological belief that there is no alternative to high cost, high complexity weapons, higher budgets are easier to justify, especially if no one can sort out how the Pentagon actually spends its money.

The key to the DOD spending problem is to initiate financial accountability. No failed system can be understood or fixed if it cannot be accurately measured.

And yet, there is no sense of urgency in the Pentagon to do anything about it.

Indeed, in the 1990s, we were promised the accountability problem would be solved by 1997. In the early 2000s, we were promised it would be solved by 2007; then by 2016; then by 2017….

The question must be asked: if nothing has been done by the Pentagon to end the accountability problem after more than 20 years of promises, is top management simply incompetent, or is this the intended result of obfuscation to avert accountability?

A spending system that effectively audits its weapon programs and offices would also be one that systemically uncovers incompetent and crooked managers, false promises and those who made them.

It would also necessarily reveal reasons to dramatically alter, if not cease, funding for some programs, which of course would make lots of people in industry, Congress, and the executive branch unhappy.

The current system and its out of control finances mortally harm our defenses, defraud taxpayers, and bloat the Pentagon and federal budgets.

Any reform that fails to address this most fundamental problem is merely another doomed attempt that will only serve to perpetuate a system that thrives on falsehoods and deception.

William Hartung, Director of the Arms and Security Project at the Center for International Policy, summed up the accountability crisis at the Pentagon by saying:

“Call it irony or call it symptomatic of the department’s way of life, but an analysis by the Project on Government Oversight notes the Pentagon has so far spent roughly $6 billion on ‘fixing’ the audit problem — with no solution in sight.

If anything, the Defense Department’s accounting practices have been getting worse.”

pentagon-lab
Decoding the Defense Budget: The Ultimate in Cooked Numbers, by Winslow T. Wheeler. Full Report PDF Here

It is all coming to a head now. After decades of “hard-core foot-dragging” and “internal resistance” the first ever “full scope audit” of the Pentagon has recently begun, and while the government’s Chief Financial Officer David Norquist’s plan has flaws, the initial findings are further evidence of widespread malfeasance.

For example, in preparation for the audit the Defense Logistics Agency (DLA), which buys and distributes military supplies, recently spent over $2 billion on a faulty accounting system. As Politico reported:

“Ernst & Young found that the Defense Logistics Agency failed to properly document more than $800 million in construction projects, just one of a series of examples where it lacks a paper trail for millions of dollars….

Across the board, its financial management is so weak that its leaders and oversight bodies have no reliable way to track the huge sums it’s responsible for, the firm warned in its initial audit… as the auditors found, the agency often has little solid evidence for where much of that money is going.”

As you will read throughout this series, the problems at the DLA are emblematic of widespread systemic problems throughout many Pentagon agencies. There are consistent reoccurring themes: billions of taxpayer dollars have been spent on accounting, tracking and IT systems that cost significantly more than originally quoted, take longer to implement, and rarely ever work properly.

William Hartung, Director of the Arms and Security Project at the Center for International Policy, summed up the accountability crisis at the Pentagon by saying:

“The Department of Defense can’t tell us how much equipment it has purchased, how often it has been overcharged, or even how many contractors it employs.

Call it irony or call it symptomatic of the department’s way of life, but an analysis by the Project on Government Oversight notes the Pentagon has so far spent roughly $6 billion on ‘fixing’ the audit problem — with no solution in sight.

If anything, the Defense Department’s accounting practices have been getting worse.”

As Reuters summed it up, “an organization that fields the most sophisticated technology in the world to fight wars and spy on enemies has come to rely on an accounting system of antiquated, error-prone computers… these thousands of duplicative and inefficient systems cost billions of dollars to staff and maintain… efforts to replace these systems with better ones have ended in costly failures… it all adds up to billions of taxpayer dollars a year in losses to mismanagement, theft and fraud.”

As the Defense Logistics audit reveals, and as you will see in this series, not only are our tax dollars not being accounted for, the Pentagon cannot adequately track weapons, ammunition and supplies stored in military facilities within the United States, let alone the weapons that are stored in over 1000 military bases worldwide, with troops in 177 countries.

The Pentagon cannot even track where tens of thousands of troops are stationed, let alone all the Global Private Military Contractors who now outnumber U.S. troops three-to-one in war zones around the world.

In fact, as evidence clearly demonstrates, our weapons are routinely “lost” in war zones and have consistently ended up in the hands of the people our troops are fighting.

Despite all the “Support the Troops” rhetoric, evidence shows that the Pentagon has frequently failed to properly pay soldiers, and provide basic benefits and adequate healthcare. As you will see, the Department of Veteran Affairs (VA) has been plagued by scandal after scandal; from billions of dollars wasted on failed IT projects and contractor self-dealing, to patient neglect and unsanitary conditions.

Even high profile U.S. Veteran fundraising campaigns have failed to deliver donations, stealing millions of dollars from the veterans who need it most.

Perhaps most terrifying of all, our Nuclear Weapons lack adequate oversight and the Defense Nuclear Facilities Safety Board has been besieged by scandalous corruption.

After an extensive analysis of Pentagon procedures, the outrageous level of corruption, staggering incompetency, outright fraud and obscene theft are beyond comprehension.

As you will see in detail throughout this series, the systemic and chronic wasteful spending that we can account for costs U.S. taxpayers tens of billions of dollars annually.

When you understand how the money that is accounted for has been spent, you will be shocked and horrified.

After understanding that, you can make some obvious educated estimates on what has been happening to the unaccounted for, untraceable and unauthorized “tax” money.

Global War Profiteers Vs. The People of the United States

Global War Profiteers
Vs.
The People of the United States

“We must guard against the acquisition of unwarranted influence… by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist.”
~ President Dwight Eisenhower’s Farewell Address

Under the guise of National Security, Global War Profiteers have looted trillions of taxpayer dollars from the U.S. Treasury and have destabilized much of the world by increasing terrorism 6500% since the “War on Terror” began, while paying off politicians and erecting an unprecedented global surveillance network.

Due to the National Security State’s control of mainstream media companies and their systematic suppression of whistleblowers, independent journalists and alternative media outlets, the overwhelming majority of the American population is unaware of how dangerously corrupt our government has become.

While civilian angst among most demographics has been dramatically rising, the American People are tragically misinformed.

We are trapped in a vicious cycle; increased military spending, with inadequate oversight, leads to billions of our annual taxpayer dollars being given directly to the people who profit off of war, terrorism and societal destabilization in general – as evidence clearly demonstrates.

The negative feedback loop then spirals; as terrorism and societal destabilization become more widespread, corrupt and/or shortsighted politicians then appropriate even more tax dollars for the military, with even less oversight, which leads to more funding, weapons and harmful technologies falling into the hands of terrorists, oppressive governments and predatory global corporations, as repressive technology and lethal weapons exponentially proliferate worldwide.

The astounding lack of oversight concerning military spending is an open invitation for every criminal element.

As a consequence to all of this military spending, Global Private Military Companies have now become more powerful than the nation-state governments that fund them.

In the United States, Global Private Military Companies dominate both political parties and most of the government agencies that were created to protect the American People against predatory Global Interests.

The People of the United States are now under attack and occupied by Global War Profiteers.

Our political system has become fatally corrupted. Both political parties now blatantly serve Global War Profiteers at the expense of hardworking Americans.

Through scientific analysis we can now prove that our government is rigged against the American People by Global Interests.

The mainstream media system is now run by Global War Profiteering Psychological Operations experts who systematically divide and conquer the American people with identity politics and Russian hysteria, while promoting war and increases in military spending, as if they are the answer to security, when every serious metric demonstrates that war, increases in military spending and the resulting government debt are primary drivers of societal destabilization, corruption, criminal activity, terrorism, violence and the spread of exploitation in general.

The distance between reality and what is presented in the U.S. mainstream media has always been disturbing, but it is now ominously terrifying and a significant immediate threat to the American People’s Security, and sanity.

“The range of what we think and do is limited by what we fail to notice. And because we fail to notice, there is little we can do to change until we notice how failing to notice shapes our thoughts and deeds.”
~ The Politics of Experience

Given the death of journalism, and how hard people have to work to keep up with the rising cost of living, Americans don’t have the time or psychological bandwidth needed to research, reflect and expand their perspective wide enough to make wise decisions.

This is the vicious cycle that has ensnared us, as our government spirals toward destruction.

Moving forward, I will present vital information and evidence in hopes that the American People can comprehend the urgency of the moment and research these issues further for themselves, so they can begin to defend their families in a serious and responsible manner.

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Archive of Inspector General Reports Revealing $21 Trillion Unaccounted For

This archive has been compiled by Dr. Mark Skidmore & Catherine Austin Fitts at Solari.com.

2015 ~ $6.5 trillion See Page #1

2015 ~ $90.2 billion See Page #8

2015 ~ $278.5 billion See Page #4

2014 ~ $1.9 billion See Page #5

2012 ~ $1.6 trillion See Page #4

2012 ~ $110.9 billion See Page #91

2011 ~ $14.6 billion See Page #100

2010 ~ $874.8 billion See Page #4

2009 ~ $1.4 trillion See Page #8

2009 ~ $311.3 billion See Page #88

2008 ~ $595.8 billion See Page #91

2007 ~ $1.1 trillion See Page #5

2006 ~ $270.1 billion See Page #107

2005 ~ $248.5 billion See Page #140, #141

2004 ~ $258.1 billion See Page #125

2003 ~ $268.3 billion See Page #191

2002 ~ $500.1 billion See Page #232

2000 ~ $361.5 billion See Page #168

2000 ~ $161.6 billion See Page #4

2000 ~ $1.1 trillion See Page #1 & See Page #147

2000 ~ $320 billion See Page #147

1999 ~ $59.6 billion See Page #4

1999 ~ $2.3 trillion See Page #9

1998 ~ $880 billion See Page #1

1998 ~ $17.6 billion See Page #4

1998 ~ $1.7 trillion See Page #5

Further Reading

This Opening Statement was an adapted excerpt from an investigative series that David DeGraw originally published on the Changemaker.Media website. That website has been under attack from hackers and is no longer available. We hope to get the full series of reports back online soon. You can download the full 88-page report in PDF format for an amount of your choosing here.

Global War Profiteers Vs. The People of the United States, Full Report PDF Download

The only two establishment media companies to cover this issue have been Forbes and a series of articles from Reuters.

Has Our Government Spent $21 Trillion Of Our Money Without Telling Us? (Forbes)

U.S. Army fudged its accounts by trillions of dollars, auditor finds (Reuters)

Special Report: The Pentagon’s doctored ledgers conceal epic waste (Reuters)

Special Report: How the Pentagon’s payroll quagmire traps America’s soldiers (Reuters)

Senators urge Pentagon to end systematic faking of its accounts (Reuters)

Special Report: Defense auditor approved flawed Marine Corps books (Reuters)

Unaccountable: The high cost of the Pentagon’s bad bookkeeping (Reuters)

The Pentagon Can’t Account for $21 Trillion (That’s Not a Typo) (TruthDig)

Decoding the Defense Budget: The Ultimate in Cooked Numbers (Center for Defense Information)

Interview Summing Up Pentagon Audit & $21 Trillion In Missing Money

Max Keiser & Stacy Herbert Interview David DeGraw

You can subscribe to David’s new YouTube channel here.

Dedication & Thanks

bonus-march

Thank you to all the Constitutional Patriots throughout our government who have been supportive of this work. With your help we can effectively unite and defend the American People on this vital issue.

We cannot sit silently as trillions of our tax dollars go unaccounted for.

“Those who have the privilege to know have the duty to act.”
~ Albert Einstein

DOWNLOAD FULL 88-PAGE REPORT

degraw-media-global-war-profiteers-v-the-USA-cover

You can download the full 88-page Global War Profiteers Vs. The People of the United States report in PDF format for an amount of your choosing here:

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