Waste and Fraud in the Defense Establishment
By Kira Webster
Despite allegedly spending $51 million of American taxpayer money over a year ago, New Century Consulting is still in business with the Pentagon. NCC was originally signed on for a program called Legacy, designed to improve Afghan forces and technology with the capabilities of fighting the Taliban. As the subcontractor, they initially developed and pitched the contract to another contractor, the Jorge Scientific Corporation – now known as Imperatis. Between October 2011 and March 2014, auditors from Sigar (Special Inspector General for Afghanistan Reconstruction) found that Imperatis didn’t have sufficient supporting documentation from NCC for their $134 million in expenditure costs.
Top NCC officials expensed lavish items like Porsches, a Bentley, an Aston Martin; inflated their own salaries; $1,500 in alcohol; paid over $400,000 salaries to their spouses who they couldn’t prove had done any work whatsoever; and $42,000 in cash on automatic weapons despite the contract stating specific regulations prohibiting those expenditures. Millions of dollars were also spent in compensation for consultants who were sent overseas to train the forces. Senator Claire McCaskill (D-Mo.) stated that they were supposed to be paid at a 100% rate while deployed, but only 60% when they were on leave. NCC’s audit shows that they paid their consultants the full rate regardless of where they were.
Alarmingly, the Afghan National Security Force’s assessments released by Sigar during the investigation also show that only 11 out of 43 units are fully capable. Meanwhile, progress reports from the Department of Defense also state that corruption ranges from Afghan National Police extortion at illegal checkpoints to Afghan security institutions taking bribes from contractors and pay-for-position schemes.
Sen. McCaskill’s exposure of NCC’s audit provides a rare glimpse into battlefield contracting that normally stays hidden in the shadows. Private contractors have become increasingly more popular since President Barack Obama decreased the number of troops in Afghanistan, and since more weapon manufacturing companies have been paying more lobbyists. Now, contractors outnumber military personnel three to one. They’re indispensable in handling security, transportation, and construction, but the Department of Defense has faced severe criticism of financial negligence concerning U.S. taxpayer dollars. Two years ago, the Defense Department was unable to account for $890 million spent on emergency reconstruction and humanitarian projects.
Government contracts have become a broken system and a horrible money pit. Harvard Political Review reported in 2016 that the Pentagon has 1.7 million contracts open, which makes proper spending oversight and management impossible. This leaves room for confusion over where money has gone, and no time for scrutiny. Contractors can also charge for whatever kind of work they do, even simple tasks like doing laundry for the troops, providing meals, building inferior facilities for buildings, and even basics like water and electricity. There is also no prestigious system set in place to monitor contractors’ work. The most common contracts that get signed are based on a “cost-plus” system, where the government will reimburse the contractors for expenses and adds commission as profit. This system works in a way that allows contractors to get earn more profit with the more money they spend, even if their work is insufficient.
It goes without saying that this contract system is fueled by greed, waste, and a lack of oversight. Private contractors have increasingly become another form of a government slush fund.
In President Donald Trump’s latest budget, defense Spending was upped 13 percent while the State Department took a 29 percent cut. Substituting peaceful diplomacy and negotiation with building weapons and military bases would cut costs considerably since larger weapons manufacturing companies wouldn’t be able to buy their hands in war. In addition, the money being wasted in the Pentagon could be better used in our education system, or legitimate humanitarian projects that help stabilize other countries in need, and thereby strengthen our relationships with them.
