The Defense Finance and Accounting Service, the agency that provides finance and accounting services for the Pentagon’s civilian and military members, has just revealed that it cannot provide adequate documentation for $6.5 trillion worth of “adjustments” to Army general fund transactions and data. According to a report released July 26 by the by the Inspector General of the US Department of Defense, US military budget practices are out of control. The report notes,
“The Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in year-end JV adjustments made to AGF data during FY 2015 financial statement compilation. The unsupported JV adjustments occurred because OASA (FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system-generated adjustments.” (emphasis added)
“Journal vouchers” provide serial numbers, transaction dates and the amount of the expenditure, not so complicated, or?
This is no minor book-keeping bureaucratic snafu. It exposes the rampant corruption at the heart of the world’s largest military Leviathan, the Pentagon. The Pentagon report goes on to declare, “In addition, DFAS Indianapolis did not document or support why the Defense Departmental Reporting System-Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY2015…the data used to prepare the FY2015 AGF third quarter and year-end financial statements were unreliable and lacked an adequate audit trail.” (emphasis added)
Translated into plain English, the US Army–and that’s only one branch of the US Armed Forces–destroyed accounting documents, did not provide an audit trail for accountability of funds allocated by Congress, and made apparently arbitrary, unverifiable accounting year-end adjustments that made it look like the books balanced, adjustments of $6.5 trillion worth. In other words they not only cooked the books, they Dixie-fried them, as in…trillion…trillion…trillion…
Interesting to know there are two mammoth institutions with government ties or government agencies which never have submitted to an independent audit. One is the privately-owned but Government linked and supposedly Congressionally monitored (hardly) Federal Reserve. The second institution never to have been audited is the Pentagon. Never.
The day before September 11, 2001 then US Defense Secretary Rumsfeld announced, “According to some estimates, we cannot track $2.3 trillion in transactions.” The story vanished the next day in the panic of 911 events.
Finally, under the pressures of exploding Federal Budget deficits, Congress demanded that the Army achieve “audit readiness,” for the first time ever, by Sept. 30, 2017. No one in Washington believes that will happen.
The corruption, falsification, probable fraud and embezzlement is so huge and so endemic that it will destroy any effort at transparency, buried under the cover of bureaucratic ineptitude. It’s symptomatic of the rot of Washington and a nation that only a few decades ago held a tradition of honesty and integrity in public service. If we want to give a name to a faceless bureaucracy responsible for accurate reporting of that unaccountable $6.5 trillion, his current name is Colonel (retired) Robert M. Speer, Assistant Secretary of the Army Financial Management and Comptroller, formerly with PwC, one of the mega accounting firms. Presumably he understands how to do basic accounting.
Whom the gods would destroy…
The title of my latest book is The Lost Hegemon: Whom the gods would destroy. It refers to the fact that the boring old patriarchs, let’s call them BOPs, such as D. Rockefeller or G. Soros or W. Buffett–oligarchs whose so-called power is based on the popular delusion that they have real power, a funny kind of hypnosis or mass delusion we nurture–that their ability to push their globalist one world fascist agenda is failing.
It’s failing everywhere, whether in their use of Islam as with Fethullah Gülen in Turkey’s recently failed US coup attempt, or in their ISIS/Al Qaeda terror war against Syria to gain control of the oil and gas of the region. Or they have failed in their effort to isolate Russia or encircle China in the South China Sea. It recalls the final days of the Roman Empire which collapsed during the Fourth Century AD not from foreign invasion, but from internal moral rot and corruption.
The roots of the decline and ultimate collapse of the Roman Empire, in its day also the world’s sole superpower, lay in the political decision by a ruling aristocracy, more accurately, an oligarchy of wealth, boring old patriarchs of that day, to extend the bounds of empire through wars of conquest and plunder of foreign lands. They did so to feed their private wealth and personal power, not to the greater good of the state.
The economic model of the Empire of Rome was based on the plunder of conquered territories. As the empire expanded, it installed remote military garrisons to maintain control and increasingly relied on foreign mercenaries to man those garrisons.
In the process of military expansionism the peasantry, the heart of the empire, became impoverished. Small farmers were bankrupted and forced to flee to Rome to attempt a living as proletarians, wage laborers. They had no voting rights or other citizen rights. In the eyes of the rich, they were simply the ‘mob’ that could be bought, manipulated, and directed to attack an opponent; they were the ‘demos,’ the masses, the public. Roman ‘democracy’ was all about mass manipulation in the service of empire.
The once independent farmers were forced to leave their farms, often for years, to fight foreign wars of conquest. The south of Italy was devastated as one result. Those with money were able to buy land as the only stable investment, becoming huge latifundistas or landowners. That led to the concentration of land in a few hands, and the land in turn was worked by slaves captured in wars of conquest. Small farmer-held farms were gradually replaced by those huge latifundia, bought for booty, and the gap between the rich and the poor increased. When the two brothers Gracchus tried in the second century AD to ease the growing gap between rich and the rest by introducing agriculture reforms that limited the powers of the wealthy Senators, they were assassinated by the men of wealth. Today D. Rockefeller is one of the biggest farmland owners in America, receiving millions in taxpayer dollars as subsidy to boot.
The government of Imperial Rome didn’t have a proper budget system. They too squandered resources maintaining the empire while itself producing little of value. When the spoils from conquered territories were no longer enough to cover expenses, they turned to higher taxes, shifting the burden of the immense military structure onto the citizenry. Higher taxes forced many more small farmers to let their land go barren. To distract its citizens from the worsening conditions, the Roman ruling oligarch politicians handed out free wheat to the poor and entertained them with circuses, chariot races, throwing Christians to the lions and other entertainments, the notorious “bread and circuses” strategy of keeping unrest at bay.
The next fundamental change that mortally wounded the Roman Empire was the shift from a draft army made up of citizen farmer soldiers to one of paid professional career soldiers as the ever-more distant wars became more unpopular. It was not unlike what took place in America in the years after the Vietnam War when President Nixon abolished the draft in favor of an “all volunteer” Army, after the popular anti-war protest became a threat to the future agendas of the military.
As conditions for Roman soldiers in faraway wars became more onerous, more incentives were needed to staff the legions. Limiting of military service to citizens was dropped and Roman citizenship could be won in exchange for military service, not unlike what is taking place now as immigrant youth are being promised US citizenship if they risk their lives for America’s wars in Afghanistan, Iraq or elsewhere.
The revelation of a $6.5 trillion Army bookkeeping disaster is but a symptom. A Presidential race pitting Democrat Hillary Clinton against Republican Donald Trump is but a symptom. A nation that spends on wars everywhere in the world while ignoring its domestic infrastructure decay whose proper rehabilitation would cost an estimated $3.6 trillion, merely half of what the US Army cannot account for is, sadly, destined to collapse. Unless of course the American people get disgusted with the Sodom and Gomorrah that today is Washington, and begin to act outside the matrix.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”
