Not Much Bang for the Buck
Jeff J Mitchell/Getty Images
How safe is the United States? Could it be defeated by a foreign nation?
Many would immediately answer “No.” The world’s top military spender, America accounts for over a third of global military expenditure—spending more than the next seven nations combined.
But does big spending buy invincibility? America is great at throwing money at problems, from health care to education. The question is, how is that money being spent?
A shocking amount of it is simply wasted. Exactly how much is unknown because the Pentagon has never been audited, but it is at least tens of billions.
However, the amount of money squandered is not the most dangerous part of the story. Instead, it is what this huge waste reveals about the people in charge of America’s security. A study of this waste reveals that a casual reliance on America’s massive defense establishment is dangerously flawed.
‘The System Is Broken’
The U.S. 7th Fleet is the most powerful naval group at sea. Its 50 to 70 ships and submarines, 140 aircraft and 20,000 Navy and Marine personnel protect America’s interests in the Pacific.
It was also all but hijacked by one foreign national.
That man is Leonard Glenn Francis, known as “Fat Leonard.” He ran Glenn Defense Marine Asia, and used it to steal tens of millions from the U.S. Navy.
gdma has supplied husbanding services to the 7th Fleet for years. When warships dock, they need fuel, supplies and maintenance; they often need towing into dock and have to pay for the parking space. gdma provided these services—at vastly inflated prices. In just five port visits in Thailand by U.S. ships, Francis overbilled the Navy $3 million for fuel alone.
The worst part of the “Fat Leonard scandal,” as it is known, is how Francis evaded detection. He bribed the commander of a destroyer and the deputy logistics officer for the fleet with gifts, money and prostitutes. They passed on classified information on U.S. ship movements. They even rerouted ships to stop at ports where Francis could overcharge the Navy.
Francis bribed a supervisory agent at the Naval Criminal Investigative Service, who helped thwart any investigations into his dealings.
If Francis had been working for a foreign power, instead of merely for money, this could have been not only a financial disaster but also a deadly tactical one.
Francis was arrested in September 2013, but the scandal’s fallout continues. Both the director of Naval Intelligence and the director of Intelligence Operations have had their access to classified material suspended. This has left America in the farcical situation where the man running the Navy’s secret operations isn’t trusted to read any secret material. In 2015, three other admirals were censured and retired.
“Managing the command structure at the top of the Navy has become a nightmare since the Justice Department began the investigation,” wrote Matthew Gault, cohost of Reuters’ military podcasts. “No one knows who will stay, who will retire, and who will go to jail” (April 13, 2015).
This affair is just one of several scandals the U.S. military has suffered in the past decade. “For generations the Pentagon has run the world’s mightiest armed forces with inadequate budgetary oversight. The system is broken,” Gault wrote in 2013. “Something needs to change, and it needs to change yesterday. If it doesn’t, the Fat Leonard debacle—with its self-serving commanders, misspent millions and compromised military secrets—could become the norm” (Nov. 18, 2013).
Investigations and lawsuits are ongoing regarding Fat Leonard-like cases in the 5th and 6th Fleets (responsible for the Middle East and Europe). In 2013, the U.S. government began investigating three Navy intelligence officers who charged $1.6 million for silencers that should have cost $8,000. Twin sisters reportedly collected $20 million over the course of six years, largely by fraud and abusing the system, through their company, c&D Distributors, which in one case charged half a million dollars to ship three screws to marines in Iraq.
This goes further than a few dodgy individuals: Giants of the U.S. defense establishment are involved. In 2003, an Air Force undersecretary overpaid Boeing for a set of tanker planes. She soon quit her job and went to Boeing, with a six-figure salary. The company had already given jobs to her daughter and her daughter’s fiancé. She pleaded guilty to corruption and was sentenced to nine months in jail. Boeing’s chief financial officer at the time also went to jail.
Beyond the money wasted, what does it mean that the U.S. military’s procurement system is “broken”? What else about the military is “broken”? If “self-serving commanders” could become the norm, how else will America be harmed?
‘We’re Going About This All Wrong’
The U.S. spent a vast amount of money in Iraq and Afghanistan—the Congressional Research Service estimated $1.6 trillion. Time magazine estimated the long-term cost between $4 and $6 trillion. In these two countries, America was spending $20 billion a year just on air conditioning. That is larger than Italy’s entire defense budget for 2015.
The fact that Afghanistan is sliding back toward the Taliban and Iran is taking over Iraq raises the overarching question of just what those trillions of dollars purchased. But the figures on just the straight-up waste are also huge. The bipartisan Commission on Wartime Contracting in Iraq and Afghanistan reported in 2011 that “[a]t least $31 billion, and possibly as much as $60 billion, has been lost to contract waste and fraud”—just one narrow type of waste—in Afghanistan and Iraq.
One of the most notorious examples of waste was $36 million spent on a command facility in Afghanistan for 1,500 personnel that was never used. Three generals requested the project to be canceled, saying it was unnecessary, but they were overruled. When investigators looked into it, commanders told subordinates to obstruct the inquiry.
There’s plenty of Fat Leonard-style corruption too. Authorities identified $1 million in overpayments for fuel in a two-month period in Afghanistan. In 2014, $45.5 million went missing from salaries meant to be paid to Afghan police.
Besides the money spent directly on the invasion, the U.S. poured $100 billion into reconstructing Afghanistan. That’s more than America spent on the Marshall Plan to rebuild Western Europe after World War ii. Propublica estimated that $17 billion of that was wasted. This includes a base that was never used, roads that quickly fell apart, and payments to nonexistent soldiers. Half a billion dollars went to cargo planes that were hardly used and then scrapped; $8 billion was spent on combating the drug trade, with no result.
In Iraq, the U.S. spent $50 billion on reconstruction. The Special Inspector General for Iraq Reconstruction estimated at least $8 billion of it was wasted.
John F. Sopko has worked hard to expose waste of these funds as the Special Inspector General for Afghanistan Reconstruction (sigar). In a speech last September, he talked about schools built with American money that were “literally crumbling and falling apart” and hospitals that “actually became unsafe because their electrical and water supply systems failed.”
One problem was investing in projects that would have been great in America but just didn’t work in Afghanistan. The U.S. spent millions on hospitals that were too expensive for the Afghans to keep running. “This sort of thing happens in Afghanistan all the time,” he said.
“You would think after 13 years of these types of occurrences, and hundreds of cases of sigar pointing these problems out, that someone would wake up, look around, and say ‘You know what, folks? Maybe we’re going about this all wrong,’” Sopko continued.
He described how he had to work hard to persuade one military official not to build high-tech solar-powered lighting at bus stops. How’s that for a metaphor for Afghanistan: America’s generals want to build high-tech lighting for bus stops while the Taliban retake the country.
“[A]ll I am seeing is a modus operandi that is woefully out of touch at best, and delusional at worst,” Sopko warned. “We simply must be smarter.”
Again there is a hint of a deeper problem. If America’s chain of command is “delusional” about money, how effective is its decision-making in other areas?
The Defense Logistics Agency is responsible for buying and distributing food, fuel, uniform apparel, medical supplies and equipment and weapons system repair parts. The dla was recently exposed spending $7 billion on things it did not need. “How do you buy $7 billion of stuff you don’t need?” asked Maj. Gen. Arnold Punaro (Ret.), who oversees a special task force on logistics for the Pentagon. “If a company did that, they’d be out of business. Even Walmart.”
Punaro said this wastage is common. “It has no sense of value or time,” he said. “No one in the Pentagon is looking for a bargain on most days. It’s a cultural thing. These are people that will ship a pallet of water on a C-17.”
Waste is epidemic in the military’s central bureaucracy. Between 2003 and 2011, for example, it managed to lose track of $6 billion worth of supplies. A 2013 Reuters special report stated, “Reuters has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn’t need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn’t known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies” (Nov. 18, 2013).
In a private company, the Department of Defense method of accounting would be illegal. “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,” wrote Reuters.
Former Defense Secretary Robert Gates said in May 2011, “My staff and I learned that it was nearly impossible to get accurate information and answers to questions such as ‘How much money did you spend?’ and ‘How many people do you have?’”
In February this year, the Center for International Policy published a report by William D. Hartung outlining more than $33 billion in waste in just 27 instances since President Barack Obama took office.
The report is focused narrowly on waste. It doesn’t include expenses like the $360 million spent on weight-loss surgery for servicemen’s families, which would hardly seem to enhance the nation’s fighting ability.
The U.S. military has major problems with the way it pays for weapons. For example, the government will often pay companies to fix their own manufacturing defects. As the Government Accountability Office put it, in one investigation into naval contracts, the Navy is “essentially rewarding the shipbuilder for delivering a ship that needed additional work.”
David W. Wise wrote on War Is Boring, “The Navy, like the other services, has proven itself incapable of running an effective weapons acquisition program in recent decades. Instead, the services pay increasingly more money for progressively fewer units that often fail to meet original specifications” (May 27).
In just about every project, costs rise while capabilities decrease. One notorious example is the Littoral Combat Ship. It was meant to cost $220 million per ship. The first cost triple that. The ships have almost universally bad reviews. They are lightly armored and lose to Chinese ships in just about every simulation.
Meanwhile, other firms are building useless weapons. For example, the Army spends around $200 million a year on M1 Abrams tanks that it doesn’t need and that go straight into storage. Why? The tank factory is in the district of the chairman of a key congressional subcommittee.
This isn’t an isolated example. Last December, the New York Times wrote that “[l]anguage inserted into the federal budget … directed the Coast Guard to build a $640 million national security cutter in Mississippi that the Coast Guard says it does not need” (Dec. 20, 2015). “I guess that is how it goes,” a spokesman for the Coast Guard said. “But we are good [without it].”
One senator wanted the cutter built in his state. In the same budget, another senator pushed for the Navy to be given $1 billion for a destroyer it didn’t ask for because the vessel was likely to be built in her state.
Worse, there is strong evidence that America’s weapons are designed primarily to be job creators, not war winners.
Franklin C. Spinney is famed for his criticism of U.S. defense procurement. In an essay written back in 1990, he forecast, “The power politics practiced by the Pentagon and Congress continue to drag our nation deeper into a quagmire of spiraling weapons costs, shrinking forces, and high defense budgets.” Now that his predictions have come to pass, it’s clear he is worth listening to.
Spinney warned that “the needs of a coherent defense policy have been preempted by the selfish desires of its individual components.” This selfishness is at the heart of his critique. The Pentagon and defense companies engage in what he calls “political engineering.” “Political engineering is the strategy of spreading dollars, jobs and profits to as many important congressional districts as possible,” he wrote. “By designing overly complex weapons, then spreading subcontracts, jobs and profits all over the country, the political engineers in the Defense Department deliberately magnify the power of these forces to punish Congress should it subsequently try to reduce defense spending by terminating major procurement programs.”
This seems to explain the problems with the F-35 fighter jet. With a price tag around $1.5 trillion, it is the most expensive weapons system in history. It is also the future of U.S. airpower: If all goes to plan, the majority of the U.S. military’s planes will be F-35s. Yet the F-35 is commonly criticized for being overly complex. A single unnecessary system—one designed to make it easier to order spare parts—leaves the entire program so vulnerable to hacking that a cyberattack could ground the whole fleet. Meanwhile, experts say Congress is unlikely to kill the program because politicians are worried about the jobs that would be lost in key districts.
There may be legitimate reasons for not canceling the F-35 program. But that decision should revolve around military consequences, not jobs.
These tactics also seem to prevail for America’s newest stealth bomber, the B-21. “By publicly announcing some of the program’s subcontractors, officials have tied the program to specific congressional districts, making it difficult for members of Congress with plants in their districts to oppose or criticize the program for legitimate military and budget reasons without also seeming to act against their districts’ interests,” reported the Project for Government Oversight in March.
The wastage and incompetence in America’s defense contracts represent more than merely a financial problem. Yes, America may have spent billions on useless roads or crumbling hospitals—but the same forces behind those purchases could have pushed the U.S. into spending $1.5 trillion, and betting its future, on a flawed plane.
A Deadly Weakness
When decisions about the military are being made with jobs, Congressional seats and career advancements as the top priority, America’s security is dramatically undermined.
Defense wastage exposes a rot at the heart of the military. Who knows the exact reason each military official signed off on billions of useless projects in Afghanistan or bought equipment that is not needed. But the same factors that lead to these decisions—lack of thought, lack of interest, bureaucratic red tape, the inability of different departments to talk to each other—are undoubtedly behind other bad decisions. Misspending is a quantifiable symptom that points to a much deeper sickness.
American military decision-makers around the world, from Afghanistan to Congress, have taken their eye off the ball. For some, their goal is personal gain. For others, it’s not rocking the boat. For others, it’s reelection. Too few have defending America from potential enemies as their top priority. This is the biggest reason why the shocking military waste matters.
America used to produce cutting-edge military technology at good prices. God blessed America, but no longer. In fact, the curse described in Leviticus 26:20—directed to the ungodly and disobedient modern-day descendants of ancient Israel, of whom America is chief—well applies: “And your strength shall be spent in vain.”
We see this in many ways—the fruitless military missions in Afghanistan and Iraq, for example. This massive waste is both a natural result of failed leadership and also a result of this curse. The preceding verse says God “will break the pride of your power.” These verses describe a nation with ample “strength” and “power,” but it is incapable of using it effectively.
When America was blessed, God said He made it so that “ye shall chase your enemies, and they shall fall before you by the sword” (verse 7). One way He did that was by blessing the nation with skilled innovators and manufacturers, allowing the nation to have its technological edge. America still has an edge here. But too few in the military take the potential for a major war seriously. The result is a bloated system that hemorrhages money and leaves this apparently invincible nation dangerously insecure.