Chuck Grassley

06/14/2024 | Press release | Distributed by Public on 06/14/2024 12:22

Q&A: What’s past is prologue at the Pentagon


Q&A: What's past is prologue at the Pentagon

With U.S. Sen. Chuck Grassley

Q: How was an employee able to embezzle $103.3 million from the Pentagon?

A: Yet again, what's past is prologue at the Pentagon. As a taxpayer watchdog, I've long worked to fix the fiscal mess at the Department of Defense. From greedy contractors to faulty accounting systems, the Pentagon's fiscal mismanagement undermines U.S. military readiness. National security is the #1 responsibility of the federal government.

Most recently, a civilian employee exploited the Defense Department's lax fiscal controls to embezzle more than $100 million. Congress has a constitutional responsibility to exercise tight control of the purse strings. Lawmakers must track defense dollars so taxpayers stop getting fleeced. As part of my oversight work, I asked the U.S. Army and Defense Finance and Accounting Service (DFAS) how the employee was able to shuttle stolen funds to a sham company without getting caught. The agency provided unsatisfactory answers, particularly regarding how in tarnation this employee's theft went undetected for six years. I'm keeping the pressure up to get answers and demanding the agency get on the stick to design a new system of internal financial controls to prevent this from happening again. I've been raising Cain about the lax internal controls for years: fraudsters pluck the Pentagon's goose because poor fiscal management makes it easy to do. As far back as 1998, I released a report exposing a pattern of theft and abuse of the Pentagon's coffers, exacerbated by shoddy bookkeeping at the Department of Defense. Getting a giant, entrenched bureaucracy like the Pentagon to change its ways can't happen overnight, but I'll keep hammering the Department of Defense (DoD) to audit its books. For the sixth consecutive year, the Pentagon failed to pass a clean audit and was unable to account for more than half of its assets. In fact, the U.S. Marine Corps is the first and only branch of the Armed Services to pass a clean audit. I'm keeping close tabs on these efforts for better fiscal stewardship to ensure it continues for the long haul.

I will continue to put pressure on the entire DoD with my bipartisan legislation to require the Pentagon to pass a full independent audit. The Audit the Pentagon Act stops pussyfooting around its failures: any arm of the Pentagon that fails to complete a clean audit would be directed to return one percent of its budget to the Treasury. Taxpayers deserve to get the most bang for their buck. The Pentagon must stop thumbing its nose at federal law and implement better financial controls to stop wasteful spending. Fiscal accountability will help strengthen the U.S. military to be the best it can be to bolster national security.

Q: What does "sweeping" refer to that involves Pentagon government contracts?

A: My bipartisan oversight work has exposed more wasteful spending perpetrated by government contractors gouging the Pentagon for parts and services. While wrongdoers would prefer to sweep their shenanigans under the proverbial rug, I'm working to crack down on what's called "sweeping," a flawed practice by which contractors delay submitting cost or pricing data to prevent the federal government from negotiating better values and lower prices. Considering the Pentagon awarded $414.5 billion in contracts in fiscal year 2022, the taxpayer has a boatload of money on the line that's fattening the pockets of contractors instead of outfitting our troops. In May, I led a bipartisan letter to demand the DoD crack down on these flagrant price gouging practices. One of the tactics used by contractors releases them of liability for potentially hiding data that might give the Pentagon a better price, costing the taxpayer billions of dollars. Extracting savings from the Pentagon is easier said than done. I'll work as long as it takes to sweep the wasteful contracting cobwebs out of every nook and cranny in the Pentagon. The taxpayer deserves nothing less and our military readiness needs the Department of Defense to be a lean, mean, fighting machine, from better bookkeeping, to updating our arsenal to supporting our troops.

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