The U.S. Military Has Lost Every Fight Since WW-II AND $21 Trillion Dollars...,

Forbes  |  In two prior columns, which can be accessed here and here, Mark Skidmore and I wrote about $21 trillion in federal government transactions in the Departments of Defense (DOD) and Housing and Urban Development (HUD) that our government indicated were undocumented and unexplained. As the concerns and questions we raised gained traction, investigative reporter Dave Lindorff dug into the issue, recently publishing the article “Exclusive: The Pentagon’s Massive Accounting Fraud Exposed” in The Nation. Based on a series of interviews with current and former government officials, Lindorff concluded that Pentagon accounting is “phony”, composed of made up numbers designed to obfuscate and thus propelling “US military spending higher year after year”.

The issue received additional attention in the media when incoming Representative Alexandria Ocasio-Cortez referred to the $21 trillion in a Tweet:

$21 TRILLION of Pentagon financial transactions “could not be traced, documented, or explained.” $21T in Pentagon accounting errors. Medicare for All costs ~$32T. That means %66% of Medicare for All could have been funded already by the Pentagon. And that’s before premiums.

This comment captured the attention of numerous media outlets including the New York Times and the Washington Post where the focus was on fact checking (see here and here, for example). The near universal assessment was that the comment by Ocasio-Cortez was misleading—the $21 trillion in undocumentable transactions do not reflect actual unauthorized spending. However, there is a very important point that is missed by nearly everyone.

Despite our efforts as well as those of Dave Lindorff, our government has not shared any underlying data or information regarding the nature of the undocumentable transactions. For example, both Mark Skidmore and Dave Lindorff have repeatedly asked the Office of the Inspector General (OIG) to provide an addendum to a report published by the OIG in 2016, which indicated that the Army had $6.5 trillion in undocumentable transactions. Typically, undocumentable transactions are a just small fraction of authorized spending. How could a $122 billion Army financial statement generate undocumentable adjustments that were 54 times authorized spending?

More specifically, both Skidmore and Lindorff requested that the OIG provide more detailed information about the nature of 170 transactions that generated $2.1 trillion in undocumentable transactions (see page 6 of the OIG report). Why would the Army make up such huge phony numbers, as Lindorff and his sources assert? And yet is difficult to imagine that such huge sums could flow in and/or out of the Army financial statement in a way that was unauthorized. It is impossible to verify without greater transparency.

We have consistently argued that in order to determine what these transactions were presumably for, one would need access to the underlying data. And yet the OIG has refused to provide any additional information, even with a FOIA request. Without any supporting documentation, we are all left with having to decide whether or not we “trust” that government authorities are sharing accurate information. At some level, we all must operate with some degree of underlying faith, but in this context there is reason to doubt. As we demonstrated in our last article, Comptroller of the DOD, David Norquist, clearly withheld critical information from Congressman Walter Jones, thus making his testimony deceptive. Greater transparency is needed to re-establish public trust. Instead, we are blocked from accessing any further information. Indeed, the most recent OIG report was fully redacted!

Last year the Pentagon conducted its first ever independent audit, which it failed. During the audit process Pentagon officials became concerned that the audit would reveal potentially sensitive information. Several months after beginning the audit, the Federal Accounting Standards Advisory Board (FASAB) posted a new document, which recommended that the government be allowed to misstate and move funds in order to hide expenditures if it is deemed necessary for national security purposes.

See page 3 of the document for a summary:

This Statement permits modifications that do not affect net results of operations or net position. In addition, this Statement allows a component reporting entity to be excluded from one reporting entity and consolidated into another reporting entity, and the effect of the modification may change the net results of operations and/or net position.