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Audit the Pentagon

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Tags The FedStrategy

04/05/2017

One of the benefits of being an extremely powerful lobby in Washington is the ability to live off the taxpayers without ever having to tell the taxpayers what you do with their money. This includes two of the most powerful lobbies in DC: the Fed and the Pentagon.1 

In recent years, thanks to Ron Paul, the "Audit the Fed" movement has gained a high profile in Washington and continues to be an election issue. Far less salient, however, is the issue of Auditing the Pentagon. And, unfortunately, like the Fed, the Pentagon is able to quash efforts to make the massive military establishment more transparent and more accountable in its spending.

In fact, the Pentagon's refusal to submit to any sort of full or meaningful audit has become so intransigent that Senators Ted Cruz and Bernie Sanders co-sponsored the "Audit the Pentagon Act of 2015" to force the Pentagon to submit to auditors.

Needless to say, the legislation went nowhere. Nevertheless, as The Guardian reports,

the GAO and Office of the Inspector General (IG) have published an endless stream of reports documenting financial mismanagement: $500m in aid to Yemen lost here, $5.8bn in supplies lost there, $8,000 spent on helicopter gears that really cost $500.

Meanwhile, according to sparse internal audits, the Pentagon doesn't know what happened to more than $6 trillion dollars spent in recent years. And, the Pentagon's own report admits the Pentagon wasted $125 billion (more than one-sixth of an entire year's budget) in "administrative waste."

In spite of its inability to submit to any sort of department-wide audit, the Pentagon likes to make a big show of things when it manages to pull off even the smallest bit of accountability. But even that usually turns out to be a matter of smoke and mirrors:

In 2014, the Pentagon celebrated the Marine Corps’s success at being the first military agency to pass an audit. But a year later it was found that the private accounting firm hired to carry out the audit, Grant Thornton, had not been thorough. The Marine Corps had desperately wanted to achieve a "clean" status, due to pressure from then defense secretary Leon Panetta to get its books in order. 

In a scathing response to the debacle, Republican senator for Iowa Chuck Grassley said that the actions of the DoD IG showed a "lack of independence and flagrant disregard for audit ethics," calling the deputy IG for auditing "a Grant Thornton lapdog."

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Image source: US Army www.flickr.com/photos/soldiersmediacenter/3236644412/sizes/m/
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