How the Pentagon Lost Track of $45 Billion

April 2, 2015

Submitted  by: Veronica Coffin


By Matthew Gault

Since 2002, Congress has set aside $104 billion specifically to rebuild Afghanistan. Of that, $66 billion went to the Pentagon.

Recently, the Special Inspector General for Afghanistan Reconstruction (SIGAR) asked the military to account for all that spending. It couldn’t. According to a new report from SIGAR, the Pentagon only knows how it spent a third of its reconstruction budget.

That’s $45 billion dollars the military can’t track and the reason is … ridiculous. According to SIGAR, the Pentagon didn’t check a box on an electronic form when it filed the information in government databases.

It didn’t break any rules when it did this, and has since fixed the oversight that led to the underreporting, but it’s cold comfort for taxpayers who will probably never know how the U.S. military spent that money in Afghanistan.

Most likely … not all of it well. The Pentagon has a history of wasting billions in the country on bad projects, corrupt business partners and disreputable construction companies.

In Feb. 2013, SIGAR began to audit all the cash the U.S. military and other agencies were spending in Afghanistan. The watchdog wanted records about grants, contracts and any other agreement where money changed hands.

Two months later, the Pentagon delivered a report that accounted for a little more than $23 billion out of $66 billion. SIGAR was confused. “Obligations for the Afghan Security Forces alone totaled $44 billion,” SIGAR wrote in a March 2014 followup letter to then-Secretary of Defense Chuck Hagel.

The letter, obtained by War Is Boring, explained that SIGAR can’t do its job — detect waste, fraud and abuse — if it doesn’t have all the information.

“We have attempted to reconcile the identified discrepancy in the data provided and have been unsuccessful in accounting for this sizable gap with [the Pentagon],” SIGAR added in the letter.

Then the watchdog asked for the records — all the records — a second time. But the Pentagon didn’t provide the information, and argued that pulling records for the unaccounted $45 billion wasn’t feasible.

There’s a few reasons why the money is hard to track. One is the Command Emergency Response Program, which allows commanders in the field to spend money to help people out in case of emergencies such as mudslides, fire and earthquakes.

Any money a commander spends below $500,000 isn’t treated like normal defense contracts, and is not reported in quite the same way. The looser rules help the commanders free up money fast. That makes sense, and the total of unaccounted cash from the program runs well below a billion dollars.

But the bulk of the unauditable contracts involve money the U.S. military spent on the Afghan security forces.

Whenever the Pentagon needs something done, such as building a new base or constructing a prison, it asks businesses for bids and awards a contract. The Pentagon then writes up the contract and stores it in a computer database called the Federal Procurement Database System.

The Defense Department and other agencies pay for these contracts in Afghanistan out of several large pools of money. The problem is that prior to 2010, regulations didn’t require the Pentagon to identify which pool of money paid for which contract when it came to foreign military sales — such as arming and equipping Afghan troops.

“Identifying all of the contract data for obligated [security forces] is … hindered by an inability before July 2010 to connect information in contract data systems with accounting information that could connect contracts with the budget account that funded the contract,” the Pentagon wrote to SIGAR in a July 2014 response letter.

Money for the security forces made up $57 billion of the total, but the Pentagon can only account for a little more than $17 billion.

That small regulatory oversight means that billions of dollars set aside for the Afghan security forces — its cops and police — are almost impossible to track through the databases.

To be clear, the Pentagon didn’t technically do anything wrong. The rules just didn’t require it to report how it funded the contracts, so it didn’t. According to the Pentagon, hiring people now to go through millions of old contracts from the past decade would require too much time and money.

The rules on reporting foreign military sales changed in 2010, and the Pentagon has reported the information since then … but that doesn’t help resurrect eight years of Afghanistan contract information lost in a sea of data the Pentagon says is infeasible to sift through.

That’s a problem because — for all the good it does — the American military has a propensity to waste a shitload of money in Afghanistan.

It wasted five years and $20 million refurbishing an old Soviet prison that still isn’t finished. The Air Force blew half a billion dollars on transport planes that never flew. It sold the aircraft for $32,000 worth of scrap.

Those are just two of hundreds of stories of waste, fraud and abuse in Afghanistan. There’s probably thousands more milling around in the giant pull of federal database systems.

But taxpayers will never learn about them, because the Pentagon thinks it would be too hard to track it down.




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