Sanders Unveils Bill to Force Pentagon to Pass an Audit—or Return Part of Its Budget

A bipartisan group of lawmakers led by Sen. Bernie Sanders introduced legislation Wednesday that would require the Pentagon to return a portion of its enormous and ever-growing budget to the Treasury Department if it fails another audit in the coming fiscal year.

The Audit the Pentagon Act, an updated version of legislation first introduced in 2021, comes amid mounting concerns over rampant price gouging by military contractors and other forms of waste and abuse at an agency that's set to receive at least $842 billion for fiscal year 2024.

"The Pentagon and the military-industrial complex have been plagued by a massive amount of waste, fraud, and financial mismanagement for decades. That is absolutely unacceptable," Sanders (I-Vt.) said in a statement as he unveiled the bill alongside Sen. Chuck Grassley (R-Iowa).

"If we are serious about spending taxpayer dollars wisely and effectively," said Sanders, "we have got to end the absurdity of the Pentagon being the only agency in the federal government that has never passed an independent audit."

In December, the Pentagon flunked its fifth consecutive audit, unable to account for more than 60% of its $3.5 trillion in total assets.

But congressional appropriators appear largely unphased as they prepare to raise the agency's budget to record levels, with some working to increase it beyond the topline set by the recently approved debt ceiling agreement. Watchdogs have warned that the deal includes a loophole that hawkish lawmakers could use to further inflate the Pentagon budget under the guise of aiding Ukraine.

Late Wednesday, following a lengthy markup session, the House Armed Services Committee passed its version of the National Defense Authorization Act, which proposes a total military budget of $886 billion. Rep. Ro Khanna (D-Calif.) was the only committee member to vote no.

A huge chunk of the Pentagon's budget for next year is likely to go to profitable private contractors, which make a killing charging the federal government exorbitant sums for weapons and miscellaneous items, from toilet seats to ashtrays to coffee makers.

"Defense contractors are lining their pockets with taxpayer money while the Pentagon fails time and time again to pass an independent audit. It's a broken system," said Sen. Ed Markey (D-Mass.), a co-sponsor of the new bill. "We need to compel the Department of Defense to take fraud and mismanagement seriously—and we need Congress to stop inflating our nation's near-trillion-dollar defense budget."

"Putting the wants of contractors over the needs of our communities," he added, "isn't going to make our country any safer."

"If the Department of Defense cannot conduct a clean audit, as required by law, Congress should impose tough financial consequences to hold the Pentagon accountable for mismanaging taxpayer money."

If passed, the Audit the Pentagon Act of 2023 would force every component of the Defense Department that fails an audit in fiscal year 2024 to return 1% of its budget to the Treasury Department.

A fact sheet released by Sanders' office argues that "the need for this audit is clear," pointing to a Commission on Wartime Contracting in Iraq report estimating that "$31-60 billion had been lost to fraud and waste."

"Separately, the special inspector general for Afghanistan Reconstruction reported that the Pentagon could not account for $45 billion in funding for reconstruction projects," the fact sheet notes. "A recent Ernst & Young audit of the Defense Logistics Agency found that it could not properly account for some $800 million in construction projects. CBS News recently reported that defense contractors were routinely overcharging the Pentagon—and the American taxpayer—by nearly 40-50%, and sometimes as high as 4,451%."

Further examples of the Pentagon's waste and accounting failures abound.

Last month, the Government Accountability Office released a report concluding that the Pentagon can't account for F-35 parts worth millions of dollars.

Earlier this week, as The Washington Postreported, the Pentagon said it "uncovered a significant accounting error that led it to overvalue the amount of military equipment it sent to Ukraine since Russia's invasion last year—by $6.2 billion."

"The 'valuation errors,' as a Pentagon spokeswoman put it, will allow the Pentagon to send more weapons to Ukraine now before going to Congress to request more money," the Post noted.

Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee and a supporter of the Audit the Pentagon Act, said Wednesday that "taxpayers can't keep writing blank checks—they deserve long-overdue transparency from the Pentagon about wasteful defense spending."

"If the Department of Defense cannot conduct a clean audit, as required by law," said Wyden, "Congress should impose tough financial consequences to hold the Pentagon accountable for mismanaging taxpayer money."