The Project On Government Oversight (POGO) Blog

President Opposes Nuke Facility, Threatens to Veto Defense Bill

The President said he will veto the National Defense Authorization Act as it is currently written because it includes, among other things, funding for a costly nuclear weapons facility, according to a statement the White House released yesterday.

The Administration “strongly objects” to efforts to construct the Chemistry and Metallurgy Research Replacement-Nuclear Facility (CMRR) in 2013, according to the President.

“The Departments of Defense and Energy agree that, in light of today's fiscal environment, CMRR can be deferred for at least five years, and funds reallocated to support higher priority nuclear weapons goals,” the President wrote.

The November 29 statement echoes the President’s latest budget request, which proposed delaying construction of the nearly $6-billion facility and using existing facilities to fulfill its missions. The CMRR-NF would produce and store plutonium pits, a primary component of nuclear weapons.

DoD Contractors Cost Nearly 3 Times More than DoD Civilians

See the inforgraphic below for all the data

Last month, the Project On Government Oversight sent a letter to government officials poking holes in the Department of Defense’s (DoD) claims that it utilizes a cost-effective workforce, and that congressional prohibitions have prevented it from implementing greater cost efficiencies. DoD’s own documents prove otherwise and support POGO’s 2011 finding that, on average, the federal government is wasting money by hiring service contractors.

POGO’s review of DoD service contracting budget and spending data found that contractor employees cost 2.94 times more than an average DoD civilian employee performing the same job. In fact, although the number of employees in both workforces is relatively balanced, spending on the workforces is not: DoD service contracts cost $253.8 billion and DoD’s civilian workforce cost $72 billion (base) or $108 (base plus overhead) in FY 2010.

Comparison of contractors to military personnel results in similar ratios, although this comparison is complicated by such cost considerations as pay, housing, subsistence, change-of-station expenses, education assistance, veteran’s benefits, tax advantages, and non-monetary benefits to military members

Star Creeps: Petraeus & the Price of the Top-Heavy Pentagon

Gen. David Petraeus

In addition to extramarital affairs and “flirtatious e-mails,” the General Petraeus sex scandal highlighted another of the Pentagon’s dirty little secrets – generals live like billionaires, and taxpayers are footing the bill.

As the Washington Post reported on Saturday, these perks “befitting a billionaire,” include, “palatial homes, drivers, security guards and aides to carry their bags, press their uniforms and track their schedules in 10-minute increments. Their food is prepared by gourmet chefs. If they want music with their dinner parties, their staff can summon a string quartet or a choir.”

Lavish perks bestowed to generals increase with higher ranks, as Raymond Dubois, former DoD director of Administration and Management from 2002 to 2005, told Air Force Times. “A four-star has an airplane. A three-star often doesn’t…Can a three-star get an airplane when he needs it? Not always. Does a four-star get an airplane when he needs it? Always. Many times he’ll already have a G5 sitting on the runway, gassed up. There are the kinds of costs that are fairly significant when you add them all up,” according to Dubois.

Taxpayers are paying for this largesse, and they keep paying long after the generals retire—even if they are receiving other salaries and benefits.

General Petraeus, for example, will reportedly receive a $220,000 annual pension for the rest of his life. Petraeus is reaping the benefits of a 2007 provision that dramatically increased the pensions of top generals and admirals, but not the lower ranking soldiers they command. The Pentagon’s press office told POGO, for the average three-star general or admiral that retires from the military, “the annual difference in retired pay between the old and new criteria is about $39,900,” per year.

Coburn: Cut Wasteful Spending at the "Department of Everything"

By BEN FREEMAN

As fears of the impending “fiscal cliff” continue to mount, at least one Member of Congress is laying out proposals for cutting wasteful spending at the Pentagon, or, as Senator Tom Coburn (R-Okla.) refers to it, the “Department of Everything.”

A new report released today by Coburn finds that the DoD could save $67.9 billion over ten years by making specific cuts to what he describes as “non-defense” defense spending.

The report targets “five areas of the Pentagon budget that have little to do with national security where taxpayer dollars could be saved and deficits reduced without impacting our national security.”

Not everyone may agree with everything Coburn recommends should be cut, but there are certainly some doozies in the report, including:

• An app that lets you know when it’s time for a coffee break.
• Research which found that “Fish could show the nation how to overcome political polarization and promote democracy.”
• $1.5 million for a Pentagon project “to develop its own brand of jerky treats that are the bomb!”

POGO's Top Picks for Defense Budget Bill

Yesterday, the Project On Government Oversight sent a letter to Congress with our picks for the most important provisions that should be included in the National Defense Authorization Act for Fiscal Year 2013 (NDAA, H.R. 4310 and S. 3254). Even though election season is in full swing and Congress has passed very little legislation as of late, the NDAA has become something of a must-pass bill and is one of the few bills that’s highly likely to reach the President’s desk for signature this year. The House passed H.R. 4310 and the Senate Armed Services Committee passed S. 3254 in May. Now Hill staffers are in discussions about how to reconcile the two versions during the lame duck session.

Some of POGO’s recommendations center on reining in wasteful Pentagon spending by cutting unnecessary weapons systems and nuclear programs. (Many of these are drawn from Spending Even Less, Spending Even Smarter in which we and Taxpayers for Common Sense identified over $600 billion in defense budget savings.) Of course, several of the measures we champion would enhance oversight and accountability to taxpayers. These range from strengthening whistleblower protections to increasing contractor accountability to improving information about how the Pentagon spends taxpayer dollars.

POGO is also urging Senate leadership to allow adequate time for debate and amendments to the NDAA on the Senate Floor. In addition, the NDAA should be reconciled by an open, transparent conference committee with all proceedings webcast live for the public. A bill of this magnitude, authorizing over $600 billion taxpayer dollars, with such important consequences for our national security and economy should not be rushed through committee or passed behind closed doors.

POGO’s recommendations are listed below. You can also read the letter we sent to HASC and SASC for the details.

DoD Service Contract Budget & Spending Data Don't Match Up

Today, the Project On Government Oversight sent a letter to congressional and executive branch officials, highlighting the Department of Defense’s (DoD) inability to provide sufficient oversight of the hundreds of billions of dollars spent each year to procure services from contractors. Without reliable and accurate data, how can Congress hold DoD accountable for complying with requirements for submitting accurate budget requests? Additionally, in the absence of government transparency, how are taxpayers to know whether their dollars are being spent in a cost-effective fashion?

POGO analyzed DoD’s responses to congressional inquiries; testimony given at Senator Claire McCaskill’s March hearing, “Contractors: How Much Are They Costing the Government?”; and DoD policy and budgetary records. POGO found inconsistencies in DoD’s claims about making cost-efficient policy and human capital decisions. POGO’s review of DoD service contracting budget and spending documents found that it expends between 2.35 and 3.53 times more of its funding on service contracts than on its civilian workforce, and that the cost of an average contractor full-time equivalent (CFTE) is between 2.94 and 8.60 times more than an average DoD civilian full-time equivalent (GFTE). In short, the numbers are grossly out of proportion, and there need to be improvements in comparative cost modeling and service contracting data in order to control costs and protect taxpayers.

The Affordability of Defense Contractor CEOs

There has been a lot of talk about what America will be able to afford in the coming years. And yet for the last decade, the Pentagon has received a blank check for all kinds of pricey, and often ineffective, weapons systems too often designed to fight enemies we don't have.

Secretary of Defense Leon Panetta and many top defense contractor CEOs have said we can't afford the 10 percent budget cut to the Pentagon that would come with sequestration. Some defense contractor CEOs are arguing that sequestration will cause massive job losses, even though history doesn't support that conclusion.

On October 1, Wes Bush, CEO of top defense contractor Northrop Grumman, sent an email to Northrop employees asking them to oppose the sequestration cuts and to personally contact their representatives.

Bush closed the email by saying, "In this time of tremendous uncertainty, our customers will need to make difficult decisions—decisions influenced by how they view those who are producing the capabilities and services they seek and require. Ultimately, program performance and affordability are the drivers of these customer perspectives."

Since the U.S. taxpayer is Northrop's largest customer, it's worth noting that as Bush talks of affordability, he received $26.2 million in total compensation in 2011. That's more than the CEOs of Lockheed Martin, Boeing, or Raytheon, though the crown for highest compensated defense CEO goes to David Cote of Honeywell, who raked in $35.7 million last year.

Senate Investigation Found DHS Intelligence Centers Wasted Money and Violated Civil Liberties

By MIA STEINLE

Updated October 5, 2012.

A Department of Homeland Security effort to improve the sharing of terrorism-related intelligence among state and local governments and with officials in Washington has yielded “shoddy” information and civil liberties violations, according to a Senate investigation.

The two-year bipartisan investigation by the Senate’s Permanent Subcommittee on Investigations found that the Department of Homeland Security’s poor oversight of “fusion centers”—local intelligence-sharing hubs it created in response to the terrorist attacks of 9/11—led to “hundreds of millions of taxpayer dollars” being wasted.

“The investigation found that top DHS officials consistently made positive public comments about the value and importance of fusion centers’ contributions to federal counterterrorism efforts, even as internal reviews and non-public assessments highlighted problems at the centers and dysfunction in DHS’ own operations,” the report said.

Up to $1.4 billion of federal funds has been spent on fusion centers since 2003, according to the investigation.

“But the report documents spending on items that did little to help share intelligence, including gadgets such as ‘shirt button’ cameras, $6,000 laptops and big-screen televisions. One fusion center spent $45,000 on a decked-out SUV that a city official used for commuting,” The Washington Post reported.

Afghanistan Watchdog Says Records for $475M in Fuel Purchases Shredded

By ANDRE FRANCISCO

Records for $475 million in fuel purchases for the Afghan National Army have been shredded, according to a new report by the Special Inspector General for Afghanistan Reconstruction (SIGAR).

Reuters reported that the U.S.-led NATO command that is training the Afghan army shredded the documents and was also unable to provide over half the documents the SIGAR office requested for its audit. In addition, "The training command has also not been tracking whether the fuel it delivers to the Afghan army is actually used or stored, leaving officials unable to determine whether any of it was stolen."

The lack of controls on the fuel and related documents present an opportunity for significant fraud, waste and abuse, which has already plagued the reconstruction effort.

SIGAR has also referred the case to their Investigations Directorate, according to a SIGAR letter, which could lead to a civil or criminal investigation.

Read more at Reuters.

Andre Francisco is an online producer for the Project On Government Oversight. Image from Flickr user willsfca.

Follow @andrefrancisco

Lawsuit Alleges "The Most Trusted Name in Polling" Violated the Public Trust

By NEIL GORDON

The Department of Justice has joined a whistleblower lawsuit accusing opinion polling services company The Gallup Organization of committing a multi-million dollar fraud on contracts with the U.S. Mint, the State Department, and other federal agencies.

On Monday, the court unsealed the complaint filed in October 2009 by former Gallup employee Michael Lindley. Lindley alleges the company violated the False Claims Act and the Truth in Negotiations Act (TINA) by providing the agencies with grossly inflated cost estimates on sole-source contracts to provide polling and consulting services. He claims Gallup inflated by two to three times the estimated number of hours required to complete the work. Lindley also claims that Gallup offered a job to a Federal Emergency Management Agency (FEMA) official while bidding on a $12 million FEMA subcontract, exercised undue influence over the awarding of a $15 million contract by the U.S. Army’s Joint Contracting Command in Iraq, and fired him for his whistleblowing activities.

The government intervened in the lawsuit only with respect to Gallup’s contracts with the Mint and the State Department. In its notice announcing intervention, however, the Department of Justice indicated that it plans to assert new claims with regard to Gallup’s FEMA subcontract. Justice will file its own complaint in the matter within the next 90 days.

CATO Study: Reshaping the Pentagon Budget Won't Negatively Impact on the Economy

A recent study by Benjamin Zycher from the libertarian think tank the CATO Institute reaffirms what we’ve been saying all along: Cutting Pentagon spending will not cause the economic nightmare or job loss catastrophe the defense industry wants us to fear.

In addition to CATO, other right-leaning analysts, advocates, and politicians have also been vocally challenging the narrative that defense spending must not be decreased. Grover Norquist, president of Americans for Tax Reform, recently pledged to fight any efforts to divert tax reform revenues toward an increase in Pentagon spending or avoiding across-the-board budget cuts, known as sequestration. Rep. Roscoe Bartlett (R-Md.), a senior Republican on the House Armed Services Committee, has called for a national dialogue on sequestration, recognizing that “the average American out there, by big percentages, wants to cut defense by twice the sequester amount.”

This debate isn’t about which side of the aisle you are on—we can all recognize that national security is rooted in economic security. And in fact, Zycher finds that a reduction in defense outlays could actually result in significant economic gains down the road.

Audit the Pentagon: POGO Applauds New Bipartisan Initiative

By ANGELA CANTERBURY and SUZANNE DERSHOWITZ

Although the Pentagon budget has ballooned by billions in the past decade, it can’t even produce a basic financial statement. But last week, Sen. Tom Coburn (R-Okla.) and a bipartisan band of senators introduced a bill to fix this outrage and increase accountability at the Pentagon.

The “Audit the Pentagon Act” (S. 3487) would create critical new enforcement mechanisms coupled with new incentives for the Pentagon to meet its audit schedule (full audit readiness is targeted for all Department of Defense financial statements by 2017). The Project On Government Oversight applauds this crucial step towards more accountability and oversight.

Explaining why this bill matters, Sen. Coburn said, “By failing to pass an audit, the Pentagon has undermined our national security. This bill ends the culture of ‘don’t ask, don’t tell’ budgeting within the Pentagon that says, ‘don’t ask us how we’re spending money because we can’t tell you.’”