Here are key excerpts from the most concise, accurate, and clearest, news-reports about something that almost all U.S. news-media have been completely hiding (issuing no reports about, though the theft indisputably happened and grows each year) — a theft of $65,000 from each American. Consequently, this composite news-report (which is herewith being submitted to all U.S. news-media) will likewise probably be hidden by them. But, the few news-media that have already reported on this very important matter are linked-to here, and deserve great praise for having done so, because the vast majority still haven’t yet reported on this important matter, at all.
THE FEDERAL GOVERNMENT CAN’T ACCOUNT FOR $21 TRILLION. DOES ANYBODY CARE?
(This article was submitted by Terrence Leveck for publication. It was so substantially edited by the journal that published it that we decided to publish at Solari.com. Our readers really want to know where the missing money went)
by Dr. Terrence Leveck, 17 February 2018
On September 10, 2001, then Secretary of the Department of Defense Donald Rumsfeld said that for the 1999 DOD budget, “According to some estimates, we cannot track $2.3 trillion in transactions.” The War On Waste [was the CBS News report about this, dated 10 September 2001]. The following day the US sustained the terrorist attacks that forever changed our world, and this startling revelation was largely forgotten, until recently.
When a discrepancy occurs in an account that cannot be traced, it is usual to make what is called an undocumentable adjustment, or journal voucher. This is similar to when your balance is off by ten dollars when you reconcile your checkbook, so you add or subtract that amount to make everything balance with the bank. In 1999 the amount the Pentagon adjusted was eight times the DOD budget for that year, and one third greater than the total 1999 United States federal budget.
By 2015 the amount reported by the Office of the Inspector General (OIG) had increased to $6.5 trillion for the Army only. [The 31 July 2016 article,] Pentagon’s Sloppy Bookkeeping Means $6.5 Trillion Can’t Pass an Audit[, by] Dr. Mark Skidmore, Professor of Economics at Michigan State University, [indicated that he] thought this made no sense and suspected an error in media reporting. Looking into this issue by using data published on the government’s own websites, he found that $21 trillion in unsupported adjustments have been reported by DOD and the Department of Housing and Urban Development (HUD) for the years 1998-2015. That’s $65,000 for every person in America. Has Our Government Spent $21 Trillion Of Our Money Without Telling Us?
Jim Minnery of the Defense Finance and Accounting Service traveled the country in 2002 looking for records on $300 million. “We know it’s gone. But we don’t know what they spent it on,” he said. He says higher-ups covered up the problem by writing it off, and he was reassigned.
According to a 2013 Reuters report [“Special Report: The Pentagon’s doctored ledgers conceal epic waste”], the Pentagon is the only federal agency that has not complied with a 1996 law [actually a 1992 law that took effect in 1996] that requires annual audits of all government departments. The Pentagon has spent tens of billions of dollars to upgrade to new, more efficient technology in order to become audit-ready. But many of these new systems have failed, either unable to perform all the jobs they were meant to do or scrapped altogether. [That Reuters article says:]
“Linda Woodford spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense’s accounts. Every month until she retired in 2011, she says, the day came when the Navy would start dumping numbers on the Cleveland, Ohio, office of the Defense Finance and Accounting Service, the Pentagon’s main accounting agency. Using the data they received, Woodford and her fellow DFAS accountants there set about preparing monthly reports to square the Navy’s books with the U.S. Treasury’s – a balancing-the-checkbook maneuver required of all the military services and other Pentagon agencies. And every month, they encountered the same problem. Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from. For those, Woodford and her colleagues were told by superiors to take ‘unsubstantiated change actions’ – in other words, enter false numbers, commonly called ‘plugs,’ to make the Navy’s totals match the Treasury’s.”
This is also standard operating procedure for the other defense branches. Difficulties included a massive backlog of audits meant to ensure that vendor contracts had been fulfilled.
In a December interview on USAWatchdog (Dr. Mark Skidmore – $21 Trillion Missing from US Federal Budget), an online news outlet run by former CNN and ABC News correspondent Greg Hunter, Dr. Skidmore said he frequently consults for local governments, and undocumentable adjustments, while common, are never more than one percent of the budget. In the case of the Army in 2015, the adjustment was over 50 times their budget for that year.
Of the missing $21 trillion he discovered, $11.5 trillion was for the Army, usually on the expenditure side. But in the 2016 OIG report for 2015, he found a single transfer from the Treasury to the Army of $800 billion when their budget was only $122 billion. The additional $688 billion had not been appropriated by Congress, and the Army doesn’t know what it was spent on.
Skidmore talked with OIG but could never make contact with anyone who had worked on the report. He also talked with the Congressional Budget Office and the General [actually “Government”] Accountability Office. They said if there was a problem there would be Congressional hearings. Donald Rumsfeld did testify before Congress in 2005, but no substantive answers were forthcoming. 2.3 Trillion Dollars Missing from DOD Day before 911 2001 Rumsfeld LIES [A] short time later, Dr. Skidmore discovered that the online links to all the relevant documents he had researched had been disabled. Fortunately he had made copies and they are available at Solari.com. DOD and HUD Missing Money: Supporting Documentation In his Watchdog interview he made a public appeal. “If you have a background in accounting or bookkeeping, please take a look at it. We need your help. Does this make any sense to you? The Federal Reserve is the fiscal agent for the Federal Government. I think if we wanted we could see the flow of resources through the Fed.”
After Dr. Skidmore made the document removals known, they were put back up online in a different location.
He further explains that:
“These reports are not at all transparent. It’ll say for example there are thousands of missing records. Not just missing but records appear to be erased. But there’s no indication of how much money would be associated with those records that we can’t see. Similarly the one report for the Army at 6.5 trillion dollars, it’ll say something like, there were 170 unsupported journal voucher adjustments that account for two billion dollars and then it stops. In my mind I’m thinking the next step would be to go into those 170. 170 doesn’t seem like that many to look into. Why don’t we go and look?”
“These government documents say we have inadequate computing systems that don’t talk to one another. That we have incompetence at some level. We have explanations of erased records and computing error and inadequate audit trails.”
Greg Hunter: “You’re not saying they’re incompetent.”
Mark Skidmore: “Yeah, I’m not saying that. That’s what they’re suggesting. In my experience with people within the Federal Government, that is not the case. They are not that stupid. They are very sharp. And many of them care about what’s going on and want to do a good job. That’s my personal experience. I’m sure that there is some level of people who aren’t as competent as they could be, but there are many competent people and typically those people are the ones who are appointed to positions of responsibility. But that’s what these reports say.”
Greg Hunter: “We lost 21 trillion and we’re just stupid. I mean that’s just what they’re saying.”
Mark Skidmore: “For me it’s like how can we have these kinds of adjustments and this massive amount of money? It doesn’t make sense to me. …
On 22 November 2013, McClatchy bannered “Pentagon’s bosses thwart accurate audit of DOD’s main accounting office”, and reported that the whistleblowing former Defense Finance and Accounting Service accountant, Jim “Minnery described a lucrative audit mill in which private certified public accounting firms make millions of dollars each year providing financial seals of approval that the Pentagon and other federal agencies then point to as proof that their congressionally approved funds are not mismanaged. ‘The reason the Defense Department gets these clean audits is because these firms that audit them want to do more business with the Pentagon,’ he said.” So: the higher-ups at the ‘Defense’ Department are the ones applying pressure to keep the Deparment’s books fraudulent, like they are.
Here are the gory details, the documentation of the dollar-amounts that have been faked (untraceable):
And here are my analyses of what’s behind all this, and of whom the chief beneficiaries of these massive thefts from the public have been (my hypotheses, of what and who and how has caused this theft of $65,000 from each person in America):
To summarize the argument in my two articles: the U.S. military controls American foreign policies, in order to maximize sales-volumes for the corporations that really pay, in retirement, the bulk of the top-brass’s lifetime income; and so those generals — even while being paid by the Government; i.e., on the government-side of the revolving door between ‘public’ service and ‘the private sector’ — are actually mainly salespeople for those private firms, getting contracts for all those unnecessary weapons. How else, for example, could the narrative that’s documented in the 2013 Reuters report, “Special Report: The Pentagon’s doctored ledgers conceal epic waste”, make sense? Those generals were doing what their arms-merchant masters needed to be done in order to puff-up American military spending to become now around half of the entire world’s military spending.
The top 5 U.S. military contractors (Lockheed, Boeing, Raytheon, General Dynamics, Northrop Grumman) = 32.44% of the total military sales to the U.S. Government.
The top 10 = 40.74% of the total such sales.
So, in order starting at the very largest, here are the top 10 beneficiaries of this system: Lockheed, Boeing, Raytheon, General Dynamics, Northrop Grumman, United Technologies, BAE, L-3, Huntington Ingalls, Humana.
Adding in the next 10, adds only around another 6% to that nearly 33%, and they are, also in order: Bechtel, Unitedhealth, McKesson, Healthnet, Bell-Boeing, SAIC, AmerisourceBergen, Textron, Booz Allen, GE.
So: U.S. military purchases are highly concentrated in only the top 5 (Lockheed, Boeing, Raytheon, General Dynamics, Northrop Grumman), which, collectively, sell around a third of all U.S. military purchases. The clout that these five gigantic firms have is about half as much as all of the others combined; and, since there are only 5 of them, they can coordinate amongst themselves much more easily than the dozens of those others can; so, these 5 firms (perhaps in conjunction with America’s big oil firms, and other big international extractive industries) probably effectively control the U.S. Government’s foreign policies (i.e., decide which countries will be invaded, what weapons will need to be purchased in order to do that, etc.).
Though the taxpayer-costs are costs to the public, the corporate-stock-value growth and dividends, etc., are private gains to the controlling owners. This system is called “capitalism.” And that is capitalism explained as “imperialism” — the international, instead of (as is more typical) as the domestic, economy. It’s international capitalism, instead of merely national capitalism. It is the aristocracies that profit from invasions and from military occupations. The biggest losers from this are the countries that become invaded and occupied — destroyed — by these aristocracies.
—————Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.