Pentagon Loses Track of $2.5 Trillion
Peter St. Onge /
Editor’s note: This is a lightly edited transcript of the accompanying video from professor Peter St. Onge.
The Pentagon has failed its seventh audit in a row, losing track of $2.5 trillion worth of assets. Where will Elon Musk possibly find $2 trillion of waste and fraud?
Last week, the Pentagon once again failed its legally mandated annual audit, suggesting that government workers are, in fact, above the law. Now the Defense Department is promising to get its books sorted by … 2028. Which just so happens to be Donald Trump’s last year in office.
In fact, the Pentagon has never passed an audit dating back to 1990 when they were mandated by the Chief Financial Officers Act. The law gave the Pentagon until 2017—27 years—to comply, since military industrial lobbyists have a lot of friends in Congress.
Nonetheless here we are 34 years later, seven years after it became legally binding, and the Pentagon can’t account for $2.5 trillion.
Was it sold on eBay? Was it purloined by contractors? Is it in a slush fund for regime change and election fortification? Who knows.
The Pentagon’s chief financial officer was defiant, saying that “if a report card is half good and half bad, you wouldn’t call that a failure.”
After all, the Defense Department does know where some of the assets are. For example, the Pentagon building, which is marked on a map and almost impossible to give to the Taliban.
It’s worth noting that if your taxes are only 37% accurate, you will not get a pass to fix it in 2028. You will be in a cage.
It’s also worth noting that Enron executives did 20 years for misstating assets. WorldCom got 25 years.
So, how does the Pentagon manage to lose track of so much money? Alas, we have only glimpses since it can’t pass an audit. But what we can see is hilarious.
For example, an estimated $220 billion in untracked spare parts—which literally are sold on eBay, presumably for export. To give a flavor, one warehouse allegedly containing $127 million in spare parts wasn’t even listed on property records. The Pentagon didn’t know it exists.
Given nobody’s watching the till, this all means military contracts can be fantastically profitable. The Defense Department famously paid $640 for toilet seat covers—inflation-adjusted $1,650. In 2018, it paid $10,000 for a toilet seat cover for C-17 cargo planes—after a public outcry, it just 3D-printed the cover for 300 bucks.
Beyond premium toilet seat covers, the Pentagon’s inspector general found that officials overpaid 4,451% for airplane parts—which they probably lost. Including a washer—a metal ring for a screw—that cost $4,000.
Zoom out to entire programs and it’s grim: The new F-35 fighter—obsolete because of drones—was promised at $50 million a pop, but has climbed to nearly $700 million per plane.
For perspective, $700 million would replace roughly 500 railroad bridges. It would pave 10,000 miles of road, or keep a military contractor in mistresses. In case you wonder why the wars must go on.
So, what’s next?
In a 2014 Gallup poll, Americans estimated that 51 cents of every federal dollar spent is waste and fraud—with state governments close behind at 47 cents.
If that’s true, we are wasting more than $5 trillion per year fattening leaches with wars—more than twice the entire income tax.
The solution is easy: Slash the spending, fire the leeches, repeal the income tax. All it takes is translating public opinion into public policy.
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