Angry Planet - How the Pentagon’s wasteful budget hurts the military

Episode Date: June 8, 2017

The Pentagon lost track of equipment worth more than a billion dollars, according to a now declassified Department of Defense audit obtained by Amnesty International last month. The F-35 program has already cost $100 billion to develop, and may not even be ready for combat according to an ex-director. The Justice Department has charged at least 20 U.S. Navy flag officers in the “Fat Leonard” scandal – one of the biggest corruption scandals in American military history. What’s going on? America operates the best and most well funded fighting force on the planet. It’s also the most expensive, and that much cash can breed corruption, waste, fraud and abuse. But this is more than just a financial problem. This week on War College, former Marine Corps captain Dan Grazier walks us through how bloated budgets and blank checks hurt military readiness. By Matthew Gault Produced by Bethel HabteSupport this show http://supporter.acast.com/warcollege. Hosted on Acast. See acast.com/privacy for more information.

Love this podcast? Support this show through the ACAST supporter feature. It's up to you how much you give, and there's no regular commitment. Just click the link in the show description to support now. The opinions expressed in this podcast are those of the participants, not of Reuters' News. President Eisenhower warned us against the military industrial complex. Well, I prefer the military industrial congressional complex. I've literally been in a meeting on Capitol Hill.

talking about the F-35 where I had a staffer say that, look, we can't oppose this because it's worth a thousand jobs for us. On today's War College, a former Marine captain tackles overspending in the U.S. military and calls for an informed approach to deep cuts. You're listening to Reuters War College, a discussion of the world in conflict, focusing on the stories behind the front lines. Hello, welcome to War College. I'm your host, Matthew Galt.

Today's former Marine Corps captain, Dan Grazier. Grazier did tours of duty in both Iraq and Afghanistan before leaving the military and joining the project on government oversight, an independent watchdog group, Pogo fights to keep Washington open, honest, and accountable. Dan, thank you so much for joining us. Hey, Matthew, it's good to be here. Thanks for having me. Absolutely. So today we're going to talk about waste, fraud, and abuse in the American military budget.

I wanted to talk about it today because Amnesty and International recently reported that the U.S. Army lost track of $1 billion in equipment. Dan, is Pogo watching this? And what exactly happened? Well, we are definitely paying attention to this. I haven't delved into this one in great, great detail at this point. But Pogo has definitely watched a lot of these issues over the years. And in this case, specifically, though, it does look like it was just sloppy accounting

on the part of the Army in this case, where individual units were using different accounting systems. There was no centralized system. And so things just got lost overseas. And that's interesting that you say that there's no centralized accounting system because as I've reported on this and have dug into this, that's a recurring theme that comes up in a lot of these cases, right, is that one of the big problems with keeping budgets down and keeping everyone accountable is that a lot of departments have a lot of hard time talking to each other. There's a lot of like bureaucratic and infrastructural problems, correct? Correct. Yeah, they, well, and these units are, these units are spread out. Sometimes their, their connectivity isn't what they're used to back

here in the United States when they're overseas. And there's frankly just a lot of moving parts involved. You have, you have a lot of these units. They're conducting operations all over the place. They're sending equipment out to partner nation units who just simply don't have the same cultural standards that we have or that the U.S. military has with regards to accountability. So they just don't have the same motive that we do to pay attention and keep track of these things. That's another interesting point that you bring up that I think gets lost in a lot of these discussions is that one of the reasons I think that the American military is so dominant is that its logistical infrastructure is so robust. And force projection requires that kind of logistical infrastructure. do you think that, you know, losing a billion dollars in equipment now and then is just the price that America pays for being the best?

Well, it certainly can be. You know, we're talking about these massive, massive organizations that have a whole lot of parts and a whole lot of moving pieces. So it is virtually impossible when you have such a big organization and you have such a big bureaucracy to maintain perfect efficiency. And that's not to mean that that should actually be a goal. I mean, warfare is inherently a wasteful enterprise. And perfect efficiency is it actually creates very delicate systems. So whereas the military needs a robust system. Perfect deficiency is not actually a goal that I think the military should have.

That being said, the military does need to husband its resources really well and be good stewards to the taxpayer dollars to make sure that that taxpayer dollars aren't being just frittered away, wait in a capricious and very wasteful nature. You just said something I think is really interesting that I had not heard before that war is an inherently wasteful enterprise. Can you explain that a little bit more for us? Oh, sure. You know, if you think about the invasion in 2003, the really high-scale operations, you're talking about a big system, a big machine really that's moving forward and it is causing death and destruction. So that right there, that is an inherently wasteful enterprise. Not on a moral aspect, it's just the nature of warfare.

And so you're going to expend a lot of ordinance. You're going to use a lot of fuel. You're going to go through a lot of expendable items. When they need to be replenished, it needs to be replenished very quickly. Now, that means that you end up forward staging a lot of logistics. And it's important to be able to have those resources. is staged where they're needed, when they're needed, not necessarily in the most efficient way, but that creates a robust system that's a lot harder for the enemy to collapse around you.

Well, with that in mind, and with what's at stake whenever we go to war, are we thinking about this? And is the civilian population maybe thinking about this the wrong way? And the Pentagon is thinking about it, you know, from their perspective, the correct way. Like, you just have to give us the money and trust us. you know, what's the role of civilian oversight then? Well, civilian oversight is very important, and it's never a good idea to give anybody a blank check, and I would be very mistrustful of anybody who says, just giving the money, trust us, we know what we're doing with it.

I think it's important for civilians to, particularly in an oversight role, to understand military operations and to understand how the military works so that they can provide the right oversight. because what might seem in other circumstances outside of the military to be very wasteful or doesn't make a whole lot of sense, might make perfect sense in a military context. So it's important, civilian oversight is very important, but it's important that the people who are providing their oversight really understand what it is that's going on. All right. So what do you think stories like this say about the Pentagon's culture then in the way that they spend money currently?

Well, there are definitely a lot of ways that the Pentagon can be better stewards of the taxpayer dollars. I like to reference back to the Defense Business Board's report that came to light late last year that found that the Pentagon can potentially save $125 billion just on overhead in the Pentagon. So there's plenty of places where cuts can be made. And I think it's important for the public to understand that. So that when you do get some people who come up to Capitol Hill with their hands out saying that they need more money, it's important for people to be able to say, well, wait a second, there are plenty of places to cut. Why don't we start with that?

And then maybe we can talk about increasing your budget. I remember that story. That was a really big story for like one, barely one news cycle. I think the Washington Post broke it, if I recall correctly. It did get lost kind of in other events because there was a whole lot else going on in the world in December of 2016. You know, as happens. But I still think that it speaks to something in the American, like, news consumption cycle. These stories come up not infrequently.

You know, like currently going on right now is the Leonard Glenn. France's scandal, which is, you know, sending a lot of admirals and other flag officers in the Navy-specific fleet to prison. And it's, it has to do with budgets and waste fraud and abuse and corruption, all the things that we're talking about today. But it's not stuff that gets a lot of play in the media. Why don't you think that the media in this, instead of the civilian population, seems to care about this or pay attention? Well, I think they would care about it if they, if it was reported more. And particularly in the fat Leonard scandal that you're talking about is a great example.

And it's a very, very compelling story. And it's gotten play in certain media outlets, but I think for the wider population, I don't think many people know about it. But it's a great example of fraud, waste, and abuse in the military. And I think you're right that the big problem with the fat Leonard scandal, is a cultural problem in the Navy and in the 7th Fleet in particular because this was something that was going on

for years and years and years and years and there were a lot of people that knew about it but it took years for anybody to actually take any serious action to stop it. Can you give us like a brief the Cliff Notes version of kind of what's going on with that? Absolutely. So the story is basically this.

The 7th Fleet, the Navy's 7th Fleet is the Pacific Fleet, operates all over, you know, all over the Pacific Rim. And when these ships go into port, they have to undergo a lot of services. And it's just basic, basic ship services, you know, pumping sewage off the ships and pumping clean freshwater into the ships and removing trash and providing security at the ports, that kind of stuff. It's called husbanding services.

And Fat Leonard, Leonard Glenn Davis ran a. ran a company called Glen Marine or Glen Davis Marine Asia. He provided these kind of services in ports all over the, all over the Pacific. And it's a very lucrative business. But what he was doing was he was recruiting friendly officers and Navy personnel in these ships to help steer the ships towards his ports. So he operated in some ports, but not all of them. And in certain ports he was able to charge more. And so what he was doing, he was bribing officers to give him ship schedules and to actually make the decision to send the ship to one port over another one where GDMA could get the business.

And in return, he was doling out gifts, watches, expensive dinners, the services of prostitutes, you know, really expensive hotel stays, all those kind of things. and he was roping up some very high-ranking, some very high-ranking officers. It was just recently where a retired admiral was sent to prison for accepting bribes from Fat Leonard. And he had an NCIS investigator in his pocket as well that was letting him know how the investigation was proceeding against him. And you read there, a lot of the emails and things that they had sent back and forth are public. You can go and look at them. And it's just incredible that these guys operated very brazenly and kind of didn't think they would ever get caught. Well, they didn't.

And that's where I say that this is a big cultural issue because a lot of times when instances of fraud, waste, and abuse happen, they tend to be individual crimes and done kind of in the shadows. Well, these guys were going in groups with Fat Leonard. And there are all kinds of pictures of this individual with his, you know, arm around the shoulders of very high-ranking admirals. So this was, this was done very much out in the open. And it's very disappointing to know that so many people were doing this and they were doing it in the open where other people could see what was going on. You're listening to War College. I am your host, Matthew Galt. We are talking with Dan Grazier of the Project on Government Oversight.

We're going to take a quick break and we will be right back. Welcome back to War College. I'm your host Matthew Galt. We are on with Dan Grazier from the Project on Government Oversight, and we are talking about the Pentagon's budget and the opportunities to curb waste, fraud, and abuse and save the taxpayers millions, perhaps not billions of dollars. So, Dan, right before we broke, we were talking about that Leonard Glenn Francis scandal. And I was wondering, I had a personal question for you. You were former Marine Corps captain, and then you joined, did you immediately, go into Pogo after you retired from the military or was there a brief period there? Like, what drove you

to pursue this as a career after the military? Oh, it was, it was immediately afterwards. I was actually on terminal leave from the Marine Corps when I started working at Pogo. And so this was, this move was made while it was still, while it was still in uniform, kind of plating what I was going to do when, when I took my uniform off for the last time. I, I was attracted to this kind of work, mostly because I I learned about the work of the famous Air Force Colonel John Boyd. I learned about him in the service because the Marine Corps' warfighting doctrine of maneuver warfare is based directly on John Boyd and his ideas. And so to better understand Marine Corps doctrine, I learned about John Boyd,

and I became fascinated by the work that he did. Pogo was started in the early 80s as the project for military procurement. It has since transmogrified into Pogo. But it was started by people surrounding John Boyd. So when I really understood John Boyd-style military reform, and this happened while I was in the service, I recognized that the military does a good job of talking about doing the right things. But in reality, when I would look around and I would see the way things were operating, I realized that, hey, wait a second, this doesn't match up with what we say we're doing.

and it wasn't that I saw I had personal experiences with any crazy fraud waste or abuse or anything like that. I just saw that our warfighting doctrine said that we needed to do certain things, but the way that the Marine Corps actually operated, we weren't doing those kind of things. We weren't educating our officers the right way. It's a good example. We weren't buying the right equipment. And so when I made the decision to get out of the Marine Corps, this opportunity with Pogo came up. to be able to work towards those kind of meaningful military reforms to make sure that we do have the most effective military force possible.

You make it sound as if these kinds of budget issues have a direct effect on military readiness and the way we fight wars. Can you delve into that a little bit? Is there an opportunity to improve our military in the way we fight by having better oversight and controlling the budgets more? Oh, absolutely. And I wrote a piece not too long ago about this, about how just throwing more money at the penit. on will mostly mean that we're going to get, we're just going to get more of the same. We're going to get more wasteful spending. And I can give you a couple of good examples, but one of the best ones is you look at the F-35.

And it's the most expensive weapons program in history. If it continues on its current trajectory, it will be a $1.5 trillion program when it's all said and done between the research and development and the procurement and then all the support afterwards for decades. But it's a system that doesn't work. And it doesn't work not because of, well, I mean, there's all kinds of technical issues now, but the program was doomed to fail from the very beginning because it was born from the wrong idea.

And that being the idea that it's possible to build an aircraft that can be all things to all people. The decision was made in the 1990s that the services were going to create this one common platform that was going to work for all the different services. and it was going to fill all the different missions that it needed. And history is shown again and again that that does not work. That if you want to build a good fighter aircraft, you build a good fighter aircraft. If you want to build a close air support platform, you build a good close air support platform.

But when you try to incorporate all of those design features in the one platform, it ends up becoming the proverbial jack of all trades and master of none. And one of the best things that could happen with this is to cancel the program, enforce a social. services to start over. Because history again has shown again and again that when you do that, the services actually do a better job the next time. And there's a great example of that right now where the Marine Corps was spent years and billions of dollars trying to build the next generation expeditionary fighting vehicle. And they tried to build what was essentially a cross between a tank and a speedboat.

And they were having all kinds of trouble making that work. And it was over budget and it was behind schedule. and then it was finally canceled. And now the Marine Corps is coming up with the next design, the amphibious, what is it, the amphibious combat vehicle, the ACV. And it's coming in, you know, as far as the reports go, it hasn't been fielded yet. But it's a whole lot less expensive than the EFV,

and they're doing it in better time. A good Navy example is the Seawolf attack submarine. That was another one that was. It was very expensive and it was behind schedule. The program was canceled and then the Navy went back to the drawing board and they came up at the Virginia class submarine, which became a whole lot less expensive and much more effective. So there's a couple of good examples of how cutting programs and hitting them in the pocketbook can make the services much more effective.

Do you think the American military is afraid to admit failure when that much money is on the line? Is that part of the problem? Oh, absolutely. Well, and there's actually two cultural issues with that. One, you're dealing with a lot of, you know, really, this is a little cliche, but a lot of type A personalities and where, you know, culturally, it's not acceptable for these guys to fail. So to admit failure and admit mistakes like that, that just kind of goes against their nature and their culture.

So that's a big problem. But the other problem is that it's this perpetual mindset of the budget process in the military, the whole use it or lose it mindset, where if I don't spend all this money, then it's going to be taken out of my budget for next year and it's going to go to somebody else. And you have the services that are fighting each other for budget supremacy. So that's a big problem. So no one wants to admit these mistakes for fear of having their budget cut the next time around. You know, no one ever really gets promoted in the military for having their budget cut.

Right. And do you think the politicians also play a part in all of this? Because it's kind of one of the American sacred political cows, right? no one is ever going to win office by saying that we need to cut back on the military. Oh, absolutely. That's a massive problem. And this is why we talk about, you know, President Eisenhower warn us against the military industrial complex. Well, I prefer the military industrial congressional complex because it's a triad in all three of those elements have to, you know, work together in order to make that process work the way it does. And yeah, you have elected

officials on Capitol Hill who are always looking for their next election. And you're right, very few politicians get reelected by having an opponent being able to run ads during the campaign saying that they lost jobs in their district. And I can give you, I'm not going to tell you who said it to me, but I've literally been in a meeting on Capitol Hill talking about the F-35 where I had staffer say that, look, we can't oppose this because it's worth a thousand jobs for us. That's another interesting piece of this puzzle, specifically for the F-35 that's really interesting. And one of the reasons it's been around for so long is that something like 47 different states

have a piece of it, right? Yeah, it's, we call that political engineering. And we call it political engineering in our line of work. The military actually calls it strategic engineering or strategic contracting. and it's one of these phenomena. No one quite knows how it originated. I tend to think that it was kind of by accident where a defense contractor realized that,

hey, wait a second, I'm building this thing in two different congressional districts, and so that means there's two congressmen who are going to be passionate supporters of this. Well, hey, wait a second, if I split this up and even more, then that means I have more guaranteed votes on this and more guaranteed defenders on Capitol Hill.

And so that process has been refined over the last 50 years to the point now where with the F-35, it's essentially politically bulletproof because you have upwards of 80 senators and 350 different congressmen who have a direct political stake in the continuation of the F-35 program. All right. So how do we make the civilian population care about all this stuff? How do we get them involved and get them to understand what's going on here? Well, I think people need to be, make sure that they educate themselves very well. So when, and a really good example of this is when somebody talks about jobs that are created for a weapons program in a district, the Lockheed Martins and the North of Grummans of the world will tell you that, hey, in this congressional district, we created 500 jobs. Well, that's not necessarily, what they're calling a job is not necessarily a full-time. dedicated position to building that particular widget for that weapon system. It could be that one guy spent an hour, you know, throughout the year doing his little part to build a model, like a win test model for this system. So people shouldn't be, you know, fooled by a lot of those, a lot of

those campaign ads. It definitely demand accountability for these kind of things. And they're and to recognize that there are better ways to create jobs in places than a lot of these systems. And besides, like, if we're, like the F-35, if the F-35 was only supposed to be a make-work scheme, then, hey, congratulations. It's been hugely successful. But it's supposed to do rather more than just be a make-work scheme. So I think people should demand better accountability for this, for this kind of stuff. We're supposed to be to be building quality tools that our men and women will use in the most difficult situations imaginable. And we really owe it to them to make sure that we are buying the right piece of gear. Right.

And what happens if, God forbid, we need the F-35 and it's not up to the task? We're going to be in an awful lot of trouble. And right now, the F-35 is definitely not living up to the high. hype. I published a report earlier this year analyzing the latest report from the Pentagon's top weapons testing agency, the director of operational test and evaluation. And it was a quite lengthy report because there are a lot of problems left with this system. It has a long way to go before its design is even finished, but we keep sinking more money and buying more and more of these things. And really all we're getting for our money right now is,

we're getting unproven prototypes, all of which you're going to have to go back and to be retrofitted with fixes to make them truly effective if that's even possible with the current design. And we're going to end up paying for that too. So we've already sunk a lot of money in and with a project still going the way it is, we're going to continue to sink a whole lot more money into something that is still not proven itself effective. Dan Grazier, the project on government oversight. Thank you so much for joining us on War College. Matthew is a pleasure. Thank you for listening to this week's show. War College was created by Jason Fields and Craig Hecht. Matthew Galt hosts the show and Wrangles the Guest. It's produced by me, Bethel Hobde.

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