Sanders Denounces a Pentagon Budget System Found 'Inherently Susceptible to Fraud'

Sen. Bernie Sanders said Monday that a new congressional watchdog report showing the Pentagon failing in efforts to combat department-wide fraud and waste revealed an "absolutely unacceptable" situation that merits true accountability.

Budget Committee chair Sanders (I-Vt.), along with House Oversight Committee chair Rep. Carolyn Maloney (D-N.Y.), had requested the Government Accountability Office (GAO) report, which was made public Monday.

The report covered fiscal year 2020, when the Defense Department (DOD) "obligated approximately $422 billion on contracts."

"The scope and scale of this activity," the report found, "makes DOD procurement inherently susceptible to fraud."

GAO also noted that it "has long reported that DOD's procurement processes are vulnerable to waste, fraud, and abuse," and referenced 2018, when the Defense Department "reported to Congress that from fiscal years 2013- 2017, over $6.6 billion had been recovered from defense-contracting fraud cases." The report also noted that in 2020, about one out of five of the Pentagon's inspector general's ongoing investigations were related to procurement fraud.

Auditors found a number of shortcomings the Pentagon has in tackling fraud risks, which can include contractors billing for work not completed or disguising conflicts of interests.

A year after the formation of the Pentagon's Fraud Reduction Task Force, for example, 11 of the department's 59 organizations, including the Army, hadn't designated a representative to that body. Also problematic is that the department "policy governing the risk management program does not specifically require fraud risk assessments," and as such, "DOD may not be identifying all fraud risks, and its control activities may not be appropriately designed or implemented."

The department's overall fraud risk profile may also be inaccurate as a result of not all component organizations reporting their individual procurement fraud risks.

"Given the billions of dollars DOD spends annually on procurement," the report stated, "failing to manage and mitigate fraud effectively may ultimately adversely affect DOD's ability to support the warfighter."

A statement from Sanders and Maloney pointed to the assessment of the Pentagon's lackluster efforts as particularly egregious in light of defense contracts regularly "worth hundreds of billions of dollars."

"The Pentagon doesn't seem to want to get serious about combating the fraud, waste, and financial mismanagement that has been its legacy for decades," said Sanders. "They don't seem to want to get serious about spending taxpayer dollars wisely and effectively. Well, I think we can all agree, that is absolutely unacceptable."

"Currently," added Sanders, "the U.S. spends more on our nation's military than the next 13 countries combined. Meanwhile, half of our people are living paycheck to paycheck, just under 40 million Americans are living in poverty, and over 600,000 Americans are homeless including roughly 40,000 veterans. The time is long overdue for the Defense Department to be held to the same level of accountability as the rest of the government."

Maloney, in her statement Monday, similarly pointed to "this failure to safeguard taxpayer dollars" as "completely unacceptable."

She urged the Biden administration to act on the report's recommendations to ensure the Pentagon stops putting money into "fraudulent contracts."