Trillions of Dollars in U.S. Military Spending Are Unaccounted-For

Eric Zuesse for The Saker Blog

This article from 21 July 2017 is here updated and expanded to the present; and the dead links in it have been replaced by functional (this time, archived — and thus more permanent) links:

Before documenting that many trillions of dollars in U.S. Government military spending have been and are unaccounted-for, and that by far the most corrupt U.S. federal Department is the ‘Defense’ Department, it is important to document here, by means of the links that will be provided in this article, that, at least after the 9/11 event, the most respected institution in America has been and is the military, and so there exists in the United States a profoundly deceived public, which is a reflection of America’s having also a thoroughly corrupt national press or ‘news’-media, a U.S. press that is controlled by the same group of individuals who control the ‘defense’ contractors such as Lockheed Martin — the firms that derive all or almost all of their incomes from sales to the U.S. Government and to its allied governments. In other words: the U.S. is controlled by a racket, and is not (in any other than the formal sense — e.g., its Constitution) a democracy. Consequently, this article will document in its links, that the publicized and widespread view that the U.S. is a democracy instead of a dictatorship is false and results from the dictatorship’s control over America’s press, with support from also the press in countries that are allied with and vassals of America’s dictatorship.

Now, and for the past two decades, as is shown in annual Gallup polls taken since 1973, the American public has displayed far higher confidence and trust in “The Military” than in any other “Institution” (including than churches, schools, the Presidency, the police, courts — any).

This enormous public respect for, basically, America’s Military-Industrial Complex or MIC, didn’t even exist before 9/11. This overwhelmingly militarized American mentality is specifically in the 21st century, and existed virtually not at all in the 20th century. In fact, back in 1973 (the year Gallup first polled this), the most-respected institution was “The Medical System,” which then was 80% respected, and now is only 36% respected. Ever since 2002 (right after 9/11), “The Military” has been respected more than 70% (around twice as much as “The Medical System” now is), and it’s the only “Institution” that is consistently above 70%. Only “Small Business” comes close, in the upper 60s. Next down is “Police” in the lower 50s. Then, everything else is in the 30s or lower. Maybe the Government’s two responses to 9/11 (first, the 2001 invasion of Afghanistan, which caused respect for the military to leap up 13% in 2002 but produced total failure; and, then, the other alleged 9/11 response, the 2003 invasion of Iraq, raised the figure yet another 3%) were the best things that ever happened for the owners of America’s giant weapons-manufacturers. This permanently militarized America, which exists ever since 9/11, enriches them enormously. The U.S. Government has served these corporate owners superbly, while the rest of the population pays the tab for it (via their taxes, and via their soldiers’ corpses — not even to mention the far more numerous corpses of residents in the invaded countries, such as Afghanistan, Iraq, Libya, Syria, and Yemen).

So, there is this steady high American respect for the MIC. The U.S. public trust it more than anything else. And yet — according to the Inspector General (IG) of the U.S. Department of Defense (DOD) — many billions, and sometimes even trillions, of dollars, in the Department’s periodic financial reports, are not documented. What has happened to this money from U.S. taxpayers is unknown — it’s gone missing (alleged to have been spent, but to payees unidentified). That’s the exact opposite of trustworthy.

According to the DOD’s IG, this vast chasm of financial darkness continues year-after-year (yet without at all reducing Americans’ trust in “The Military”). Apparently, Americans, as a lot, are gluttons for punishment — or else our ‘news’-media haven’t sufficiently reported the “waste, fraud, and abuse” that “The Military” (the most-respected U.S. institution) are doing to the American public. (And those media covered-up for the regime and uncritically spread its lies — such as about ‘Saddam’s WMD’ in 2002 — as if those allegations by the corrupt Government were instead facts, and so America’s press are themselves part of the regime; they’re only fakes as ‘journalists’, and so they certainly share in this Government’s guilt.) Either way, there is this extraordinarily high public confidence in the military, ongoing year-after-year, though the U.S. DOD continues to be the only unauditable federal Department, and though expenditures amounting (over the years) into trillions of dollars still remain unaccounted-for. But here, as will be documented in this article, will be the American ‘news’-media’s chance to call the public’s attention to this discrepancy between the military’s reality, versus the public’s perceptions of that reality, by their publishing this documentation (if they finally decide to do it — which they’ve never yet done):

On July 14th, Catherine Austin Fitts posted to her website links to some of the key relevant federal documents. Her site is linked-to below, and some of the documents that refer to trillions of dollars unaccounted-for are also linked-to below, and are then quoted from, so that a reader can obtain — even without clicking onto the links — a sense both of the enormity of the corruption, and also of the authoritativeness of the official statements that are being made in these documents, regarding the extent of that corruption.

I am using here the word “corruption” because whenever an official finding by a U.S. government agency is reporting trillions of dollars of taxpayer money that have been spent for purposes and recipients which are unknown, I call it “corruption,” on the basis that: regardless of whether or not the matter is intended or is instead sloppiness, even mere sloppiness is heinous if it ranges into trillions of dollars of taxpayer-money missing or wrongly spent. Even sloppiness, of that magnitude, in the expenditure of taxpayer funds, reflects corruption, if it continues on for years, or especially (as it is shown to do here) for decades, and still has not been stopped.

In fact, the most recent such IG report makes clear (on page 7 of 74) that “Army and Defense Finance and Accounting Service Indianapolis personnel did not adequately support $2.8 trillion in third quarter adjustments and $6.5 trillion in yearend adjustments made to Army General Fund data during FY 2015 financial statement compilation.” These “adjustments” — a total of $9.3 trillion over the half-year period examined — had been made to prior unacceptable reports, but were still failing to explain where the money had gone. Here is the main site (solari, of Catherine Austin Fitts), and excerpts from the main documents, which excerpts are posted immediately below it:

——

http://web.archive.org/web/20171002003213/https://solari.com/blog/dod-and-hud-missing-money-supporting-documentation/

https://archive.is/wMF1q

“DOD and HUD Missing Money: Supporting Documentation for $21 Trillion of Undocumentable Adjustments”

2 October 2017, Catherine Austin Fitts, News & Commentary

“Dr. Skidmore and his team have now reviewed additional documentation and undocumented adjustments at DOD and HUD now total $21 trillion – more than the outstanding debt on the US government balance sheet.”

——

26 July 2016 “Army General Fund Adjustments Not Adequately Documented or Supported”

http://web.archive.org/web/20191113014716/https://media.defense.gov/2016/Jul/26/2001714261/-1/-1/1/DODIG-2016-113.pdf

“We determined that 236, totaling $2 trillion, of the 263 third quarter JV adjustments in our sample, and 170, totaling $2.1 trillion, of the 194 yearend JV adjustments in our sample, were in fact unsupported.”

“OASA(FM&C) and DFAS Indianapolis personnel did not adequately document or support adjustments made to AGF data during FY 2015 financial statement compilation. Specifically, OASA(FM&C) and DFAS Indianapolis personnel did not adequately support $2.8 trillion in JV adjustments for third quarter and $6.5 trillion in JV adjustments for yearend.17”

——

23 September 2011 “Testimony of the [DOD] Deputy Inspector General for Auditing”

https://web.archive.org/web/20121010184926/http://www.dodig.mil/IGInformation/IGInformationReleases/DoDIG_Testimony_Final%20(HOGR-20110923).pdf

“We found the Department’s review process included less than half of the fiscal year 2010 first quarter gross outlays.10 … Comptroller officials stated that the $167.5 billion in outlays the Department did not examine for improper payments included internal and intragovernmental transfers. Those outlays were not subject to the OMB reporting requirements since the payments did not leave the Government. However, we later determined that Comptroller officials did not perform a reconciliation to determine whether these outlays were internal or intragovernmental transfers. A complete reconciliation is still needed to demonstrate that all outlays are being examined for overpayments and in order to accurately report the extent of the overpayments. Specifically, DoD did not review approximately $167.5 billion of the $303.7 billion in gross outlays for high dollar overpayments. Additionally, some overpayments that we or the Department identified were not reported, and the First Quarter FY 2010 High Dollar Overpayments Report did not include sufficient information about recoveries and corrective actions.”

“Unless DoD improves its methodology to review all its disbursements, it will continue to understate its estimate of overpayments and will likely miss opportunities to collect additional improper payments.”

“We are concerned with the accuracy and reliability of the Department’s estimation process. Without a reliable process to review all expenditures and identify the full extent of improper payments, the Department will not be able to improve internal controls aimed at reducing improper payments. 12 The Department’s financial management processes are not always adequate to prevent or detect improper payments. For example, in our recent audit of a contract supporting Broad Area Maritime Surveillance, we found DoD personnel did not validate that the contractor was entitled to $329.3 million it received as of January 12, 2010. These are costs paid to contractors that Defense Contract Audit Agency questioned because they do not comply with rules, regulations, laws and/or contract terms which meets the definition of an improper payment. These improper payments the audit agency identified are greater than the $1.3 billion of improper payments the Department identified during 2004 to 2010.”

——

https://archive.is/kW8Tf

20 July 2000: “STATEMENT OF ROBERT J. LIEBERMAN ASSISTANT INSPECTOR GENERAL DEPARTMENT OF DEFENSE BEFORE THE TASK FORCE ON DEFENSE AND INTERNATIONAL RELATIONS HOUSE BUDGET COMMITTEE ON DEPARTMENT OF DEFENSE FINANCIAL MANAGEMENT Report No. D-2000-167 DELIVERED: July 20, 2000”

“The audits of the FY 1999 DoD financial statements indicated that $7.6 trillion of accounting entries were made to compile them. This startling number is perhaps the most graphic available indicator of just how poor the existing systems are. The magnitude of the problem is further demonstrated by the fact that, of $5.8 trillion of those adjustments that we audited this year, $2.3 trillion were unsupported by reliable explanatory information and audit trails or were made to invalid general ledger accounts. About $602.7 billion of accounting entries were made to correct errors in feeder reports.”

——

THE MAJOR RECIPIENTS OF FEDERAL FUNDS:

Here, from the list of the 100 largest U.S. federal Government contractors, are the 20 largest recipients of U.S. federal government money:

https://archive.is/j2XGb

The following is a list of the Top-100 U.S. Department of Defense (DoD) Prime Contractors in Fiscal Year (FY) 2015 ranked by total contract funds awarded [and showing also the aggregate percentage of total U.S. federal spending on private contractors going to each company].

1. Lockheed Martin Corp., 10.71% of all U.S. $ to contractors

2. The Boeing Company, 5.33%

3. Raytheon Company, 4.54%

4. General Dynamics Corp., 4.22%

5. Northrop Grumman Corp., 3.49%

6. United Technologies Corp., 2.58%

7. L-3 Communications Holdings Inc., 1.86%

8. BAE Systems plc, 1.63%

9. Humana Inc., 1.31%

10. Huntington Ingalls Industries Inc., 1.13%

11. Bechtel Group Inc., 1.07%

12. Health Net Inc., 1.01%

13. Unitedhealth Group Inc., 0.97%

14. SAIC Inc., 0.92%

15. General Atomic Technologies Corp., 0.85%

16. McKesson Corp., 0.79%

17. Bell-Boeing Joint Project Office, 0.75%

18. AmerisourceBergen Corp., 0.68%

19. Booz Allen Hamilton Holding Corp., 0.65%

20. United Launch Alliance L.L.C., 0.63%

As is obvious, all or almost all of these firms are contractors to (recipients of money from) the U.S. Department of Defense; and they may reasonably be presumed to be benefiting significantly from some of the unaccounted-for payments from the U.S. DOD. However, if the money isn’t going to them, then where is it going? And why? And for what? Why is there no congressional investigation to answer these questions? And why are U.S. ‘news’-media not publicizing this matter so as to force such investigations? Are payoffs involved — payoffs for silence? Why are none of the ‘news’-media that have the resources to explore these questions, publishing their own investigations into it, since Congress won’t investigate? And, since the Inspector General’s reports into these matters have had no impact, why isn’t the focus finally shifting away from studying to find how much is missing, toward instead prosecuting the people who — at the very least — failed to do what they were being paid to do: keep track of every cent of taxpayers’ money? If doing that job is too dangerous, then shouldn’t the people who are tasked to do it be paid more, so as to cover their exceptionally high personal risk? Is all of this secrecy really necessary in order to keep “The Military” far on top as the most respected of all institutions in the United States — even after all of the harms that the U.S. military has actually caused in Iraq, Libya, Syria, etc., destroying those countries and others? How much would the American public’s respect for the military — the mass-killing institution — be brought down, if the truth about it were known? Would the mass-killing institution deserve to be the most respected institution even if it weren’t so profoundly corrupt?

UPDATED DATA:

https://investingnews.com/top-defense-contractors/

http://archive.is/Zzpn6

“10 Top US Defense Contractors”

Scott Tibballs – August 8, 2019

1. Lockheed Martin (NYSE:LMT)

Revenue: US$53.8 billion; year-to-date gains: 39.5 percent

2. Boeing (NYSE:BA)

Revenue: US$101.1 billion, year-to-date gains: 2.34 percent

3. Northrop Grumman (NYSE:NOC)

Revenue: US$30 billion, year-to-date gains: 46.7 percent

4. Raytheon (NYSE:RTN)

Revenue: US$27 billion, year-to-date gains: 19.72 percent

5. General Dynamics (NYSE:GD)

Revenue: US$36.1 billion, year-to-date gains: 15 percent

6. United Technologies

This company will be merging with Raytheon in 2020. UTX is up by 19.12 percent year-to-date, with its shares valued at US$129.01.

7. L3 Harris Technologies (NYSE:LHX)

L3 Harris develops advanced defense technologies in communications. It is up by 55.82 percent year-to-date, at US$207.46.

8. Huntington Ingalls Industries (NYSE:HII)

Huntington Ingalls is a major component of US Navy shipbuilding capacity. The company is trading at US$207.37, up by 7.69 percent year-to-date, though it has been much higher.

9. Leidos (NYSE:LDOS)

Leidos is a technology company with major contracts with the Department of Defense. The company was trading at US$80.54 as of August this year, up 54.79 percent year-to-date.

10. Booz Allen Hamilton (NYSE:BAH)

Booz Allen Hamilton is a cyber security and intelligence company, once called the “world’s most profitable spy organization” by Bloomberg. The company is trading up 58.94 percent year-to-date at US$70.46 as of August.

ADDED OBSERVATIONS, regarding those recently soaring military sales:

On 21 May 2017, I headlined “U.S. $350 Billion Arms-Sale to Sauds Cements U.S.-Jihadist Alliance” and reported that, “On Saturday, May 20th, U.S. President Donald Trump and the Saud family inked an all-time record-high $350 billion ten-year arms-deal that not only will cement-in the Saud family’s position as the world’s largest foreign purchasers of U.S.-produced weaponry, but will make the Saud family, and America’s ruling families, become, in effect, one aristocracy over both nations, because neither side will be able to violate the will of the other. As the years roll on, their mutual dependency will deepen, each and every year.”

I followed that up, on 14 August 2018, by “America’s Militarized Economy” and opened with “Donald Trump’s biggest success, thus far into his Presidency, has been his sale of $400 billion (originally $350 billion) of U.S.-made weapons to the Saudi Arabian Government, which is owned by its royal family, after whom that nation is named. This sale alone is big enough to be called Trump’s ‘jobs plan’ for Americans. It is also the biggest weapons-sale in all of history. It’s 400 billion dollars, not 400 million dollars; it is gigantic, and, by far, unprecedented in world-history.”

That’s what has mainly been driving the recent massively increased sales-volumes of America’s ‘defense’ contractors. It also underscores why Trump refuses to blame Saudi Arabia’s Crown Prince Mohammad bin Salman al-Saud for ordering Washington Post columnist Jamal Khashoggi to be chopped up in Istanbul and disposed of, even while Trump blames leaders of Iran, Syria, Venezuela, etc., for all sorts of alleged (usually fictitious) atrocities. On December 24th, İbrahim Karagül, of Turkey’s Yeni Safak newspaper, bannered “Khashoggi murder: Five executions, one cover-up can’t save you.” and he said, of Saudi Arabia’s ‘investigation’ into Khashoggi’s murder:

The case was a setup, the trial was a setup, the death sentences are also a setup. The Saudi administration, which refrained from disclosing even the whereabouts of Khashoggi’s body, resolved to kill those who did the crown prince’s dirty work to save Salman. This is an act of silencing, destruction of evidence, the liquidation of people whose loyalty is in doubt and who are likely to talk.

Saud al-Qahtani, the leader of the murder team, was not convicted. Even Mohammad al-Otaibi, Istanbul consul general, whom Turkey showed as the unwanted man and asked the king to withdraw, was not even accused. Ahmed Asiri, deputy chief of intelligence who planned the murder – and was supposedly dismissed – was released.

But, because the vast majority of Americans don’t get to know any of this, they think that today’s America is still like pre-1945 America was, instead of having switched to become more like the fascist powers themselves were. Germany, Italy, and Japan, had heavily militarized economies during the 1930s through early 1940s, and America has a heavily militarized economy ever since (at least) 1980, and especially now — long after the Cold War ended on Russia’s side in 1991, and especially long beyond any reasonable excuse for these constantly rising ‘defense’ expenditures. There’s economic growth in such countries (that is, in imperialistic fascist countries), and almost all of it goes to the controlling owners of ‘defense’ contractors. What grows, then, in such countries, isn’t actually the patient, but the tumor. However, lots of Americans don’t know the difference between the two and are satisfied with any type of growth at all, and they even respect the world’s most corrupt military more than they respect any other institution. In a functioning democracy, this would be impossible, because any public anywhere would be outraged by it and would be in open revolt against it if only they knew about it. Furthermore, if this were a democracy, then the entire public would already have learned about this, and the situation wouldn’t have reached so bad — and so dangerous (for the entire world — such as now, after Trump assassinated Iran’s #2 leader) — a stage, as it already has reached, while nothing was being done to stop it and to imprison (and nationalize the wealth of) the U.S. billionaires who have been behind (and so enormously profiting from) heisting the Government and getting the public to fund these imperialistic operations of the nation’s aristocrats. Astronomical political corruption is the sole source of all of this. And this corruption is in the courts, and not only in Congress and in the Executive, and allows this rape of democracy to be called ‘constitutional’ and thus go unpunished, and thus to become constantly worse.

Soaring wealth-inequality, not only inside the United States, but throughout the world, results from this. And the biggest crimes are at the top — where there is impunity (because it’s ‘constitutional’ — even though that’s only a lie about what the Founders had meant by their Constitution).

When the crooks actually write the laws, the laws become crooked. When the crooks also control the ‘news’-media, the public are defenseless because ignorant and deceived. Wherever fascism is in control, this is the way that it functions.

HOW THE ESTABLISHMENT RESPOND TO THIS:

Mick West, who blogs as metabunk dot org, is a propagandist for the “Establishment” or the billionaires’ preferences of what the public should believe; and, on 16 May 2018, he headlined “Debunked: Missing $21 Trillion / $6.5 Trillion / $2.3 Trillion – Journal Vouchers”, and he presented a representative of America’s Military-Industrial Complex (MIC) asserting, to U.S. House members, that “this is not a new story, it dates back to 2001 and before,” and, West noted, “All these things are accounting things that, as Norquist says ‘occur after the money is spent’. They are things that you want to get right in your accounting, but if you get the values wrong then it does not mean you’ve lost the money. It means you’ve got some estimate wrong, and you’ll put to little or to much [West meant “too much or too little”] in one fund or another.” Referring, then, to the $21 trillion, he wrote, “This is just more of the same though, still not missing money, still just unsupported accounting information transfers.” However, only a sucker would take that casual attitude to the enormous amount of money in the ‘defense’ budget that is “unsupported” as to who received it, and whether or not those payments were in accord with what Congress had actually authorized. Furthermore, such a casual attitude toward U.S. ’defense’-expenditures — the expenditures which constitute actually over half of the U.S. federal Government’s discretionary expenditures, and even around half of the total world’s military expenditures — is an invitation to corruption in over half of this Government’s annually authorized spending; and any intelligent person would expect that such an invitation would be taken advantage of by insiders who are in a position to benefit from it. West quotes from only one alleged authority, the “Defense Department Comptroller, David L. Norquist,” a person who is largely responsible for the problem, who said “it’s an accounting problem that does need to be solved because it can help hide other underlying issues,” but (at 1:43 in the accompanying video) “it’s not the same thing as not being able to account for money that Congress has given you to spend, but it’s still a problem that needs to be fixed.” Mick West simply trusted this statement, by Norquist — though Norquist is one of the officials responsible for the problem — but Norquist failed to prove (and wasn’t even asked to prove it, by the Representatives whom he was there addressing, who didn’t seem to be alarmed about where that $21T actually went) his key assertion, that “it’s not the same thing as not being able to account for money that Congress has given you to spend.” And, even if that assertion, by that official, is true (which should not be assumed, and which even seems ludicrous on its very face), the problem is unquestionably an invitation to corruption in ‘defense’-expenditures, and those are precisely the type of federal expenditures that overwhelmingly dominate the income to the federal Government’s contractors, the corporations that make all or most of their profits from sales to the federal Government and to its allied governments (such as to the Saud family). Therefore, casually allowing — and not even investigating as being possibly treasonous — these expenditures, is, itself, enormously scandalous, but the Representatives there were treating it so casually. In fact, at the very opening of the hearing, which was held on 10 January 2018 (at 02:12 in the video of the 1:41:33-long hearing) the Chairman of the Committee emphasized the “We must spend more” on the military, even though we already spend around half of the entire world’s military expenditures. Manifestly, this hearing was a charade. In the full video, the passage that Mick West quoted from is at 18:00-22:00, and the Representatives were clearly on the side of the charade, not on the side of the American people. Clearly, all members of that Committee, the House Armed Services Committee, behave as if they are in the pockets of firms such as Lockheed Martin.

On 15 November 2018, Reuters headlined “Pentagon fails its first-ever audit, official says”, and reported that “‘We failed the audit, but we never expected to pass it,’ Deputy Secretary of Defense Patrick Shanahan told reporters.”

On 27 November 2018, The Nation headlined “Exclusive: The Pentagon’s Massive Accounting Fraud Exposed” and David Lindorff opened: “On November 15, Ernst & Young and other private firms that were hired to audit the Pentagon announced that they could not complete the job. Congress had ordered an independent audit of the Department of Defense, the government’s largest discretionary cost center — the Pentagon receives 54 cents out of every dollar in federal appropriations — after the Pentagon failed for decades to audit itself. The firms concluded, however, that the DoD’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.”

So, that was the result of the latest version of this charade, which is virtual treason by the federal Government.

In short: Congress is satisfied for this situation to continue, and the members of Congress evidently have no fear that the voters back home will vote against them if a challenger makes this issue a major issue in that Senator’s or Representative’s next Party primary. The presumption is that the voters don’t care, and that the ‘news’-media won’t enlighten the voters about this matter, and about how it impacts, for example, which nations the U.S. will categorize as being an “ally,” to sell weapons to, and which nations it will categorize as being an “enemy,” to target for conquest.

Invading and militarily occupying all of these countries which ‘our’ Government calls an “enemy” (though that country never even threatened, much less invaded, the U.S.) is the end-product of a vast amount of corruption — this much is absolutely clear.

None of this could happen if the United States Government did not secretly continue the Cold War against Russia after Russia ended it on its side in 1991. Russia is the U.S. aristocracy’s necessary bogey-man. For example: how many Americans know that in June 2013, which was months before the Maidan demonstrations even started in Russia’s next-door-neighbor Ukraine on 21 November of that year, the U.S. federal Government was already seeking U.S. Government contractors to transform a building in Sevastopol Crimea in Ukraine into becoming part of a U.S. naval base there which Obama was planning to replace Russia’s largest naval base, which had been — and still remains — located there since 1783? He had started by no later than June of 2011 his planning for the February 2014 coup in Ukraine.

The origin of this goes all the way back to 26 July 1945, but the next key date was 24 February 1990, which continued the Cold War after Russia ended it.

Anyone who writes about U.S. policy and doesn’t place this issue front and center is either misinformed or else corrupt. But anyone who does place it front and center will be unemployed (except, perhaps, at struggling non-mainstream U.S. national news-media). This is how much of a dictatorship today’s U.S. has now become. Lying and cover-up have now become obligatory in all of the mainstream U.S. media, so as to prevent the American public from knowing what this article has documented to be true. This article has been written as an introduction to understanding recent American history.

—————

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.