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Where is the money going?

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Key Details Lacking On Post-9/11 Billions


In the year after the Sept. 11 attacks, Congress gave the Pentagon $28.5 billion in "emergency-response" money to fight terrorism. The Pentagon has spent almost all of it. But nothing on the public record shows in any meaningful way how the money was actually used. And even confidential reports to congressional staff about the spending leave defense-budget experts wondering exactly what was bought in many cases.

The public has less information than usual, and arguably less than it needs, about the "emergency supplemental" appropriations. Congress okayed the funds during a national crisis without knowing completely how they would be spent, in the expectation that a fuller explanation would come later.

But the explanation has come almost entirely in private exchanges between the office of the Defense comptroller and a handful of congressional aides. No public documents on the spending have been printed. And even the insiders' "execution" papers leave a host of unanswered questions, experts say.

The only publicly available document on actual post-Sept. 11 spending is a quarterly report to Congress on the Web site of the Office of Management and Budget. It says, for example, that $4.8 billion was spent on "Increased Worldwide Posture," $1.7 billion on "Offensive Counter-terrorism," and so on. The terms' meanings are broadly defined in other documents. Yet there is no description in the report of precisely what was purchased with those monies.

The execution reports submitted privately to congressional staff in 2002 purport to explain further where the money went. While these reports can often be more specific, they just as frequently say next to nothing about what was delivered for the dollars. In fact, one expert said that the Pentagon appears to be most specific when the dollars at stake are fewest—and least specific when describing hundreds of millions in expenditures.

A House staffer who is intimately familiar with the materials said: "There's no way you could do a halfway-decent budget analysis from any of that information. It's very vague. Given the character of what the money was for [fighting terrorists], there's little stomach up here to bore into it."

The aide, who requested anonymity, said: "It's been written off, in terms of oversight."

Most of the $28.5 billion was spent on unclassified programs, so the lack of specifics in the reports to Congress does not appear, in most cases, to be driven by security concerns.

Pay first, ask questions later

At issue is the "Defense Emergency Response Fund," or DERF, a special pool of money created in 1989 for the Pentagon to respond to natural disasters. Normally, the executive branch requests money from Congress for particular programs. The executive can significantly deviate from that plan only with congressional approval.

But after Sept. 11, the president wanted to use the "emergency-response" funds for a lot of anti-terrorism spending, because the administration wanted flexibility to redirect money as needed.

However, Winslow Wheeler, a former Senate Budget Committee aide, said the Bush administration "did not return the favor of the flexibility that Congress gave them by being scrupulous in accounting for how the money was spent."

Wheeler, now a visiting senior fellow at the Center for Defense Information, a non-partisan security think tank, said: "When I was around it was hard as hell to find out what was going on."

The DERF money appropriated in the year after Sept. 11 came in two packages—$17 billion a few days after Sept. 11, plus $11.3 billion last summer.

The amounts at issue are not insignificant. The $28.5 billion is a fraction of the hundreds of billions of total U.S. military spending since Sept. 11. But it's probably enough to buy a new fleet of midair refueling tankers or purchase a rudimentary anti-ICBM shield or replace half of America's aircraft carriers.

The Pentagon provided Defense Week with an execution report summarizing spending in the first months after Sept. 11. A spokesman, Lt. Col. Gary Keck, said the document typifies the kind of thorough data Congress has consistently received on the emergency spending. Some reporters were given copies of the documents months ago, he said, and the Pentagon has been more than forthcoming about it. Beyond the execution reports, he said additional stacks of data were also provided to Congress; but to see those, a reporter would have to submit a Freedom of Information Act request.

The White House, too, argues that Congress has been fully informed about the post-Sept. 11 expenditures.

Michael Toth, a spokesman with the Office of Management and Budget, or OMB, said in a written response to a query: "First, DOD and OMB provided definitions, in advance of receipt of the funds, which explained what was intended to be funded in each category. Second, DOD then provided detailed quarterly reports that showed by service, by category what was issued, committed and obligated. These were much more detailed than the current summary report. Third, the DOD provided periodic detailed briefings to the staffs of the defense oversight committees and the Senate and House Budget committees on execution of these funds. Fourth, the GAO did an audit on the program that found DOD executed the funds as indicated."

The GAO audit, which has not yet been released, is a limited examination of whether a separate internal accounting system the Pentagon set up to track the first post-Sept. 11 emergency funds worked. The answer was yes, sources say, but that does not mean GAO gave the Pentagon a passing grade on financial management of such funds.

In fact, a year ago, the Pentagon Inspector General audited the DERF and similar Pentagon funds and found: "Controls over the process used to compile the reports on budget execution did not provide reasonable assurance that the reports were accurate and reliable." There were billions of dollars in unreconciled discrepancies, the auditors said.


Several aspects of the Pentagon's presentation of the facts to Congress made life difficult for legislators, multiple sources say.

The budget information was initially presented to Congress in never-before-used categories such as Increased Worldwide Posture or Offensive Counterterrorism—not in traditional appropriations accounts like "Procurement, Army."

In later reports, at Congress' behest, the Pentagon used the traditional categories—but only at their highest level of aggregation. In other words, they'd say how much was spent on Army procurement, but only rarely would say, for example, how much was spent on wheeled tactical vehicles versus missiles; or on particular kinds of vehicles or missiles; or on the number of units procured.

The change in categorization also made comparing or tracking spending through time next to impossible, experts say.

In addition, because Pentagon officials said the money was for the "global war on terrorism," they almost never said where a given funding line was being funneled, so it was not possible to tell how much operations in Afghanistan cost versus those in the Philippines, for example, or how much domestic security cost.

Also missing were other key details. For example, the document provided by the Pentagon says that Increased Worldwide Posture in the Air Force in the four months after Sept. 11 involved things like "Contingency Response" for $224 million and "Mobilize Guard and Reserves" for $348 million. But there is no description of the numbers of troops assumed in the dollar figures, how much particular operations contribute to the expenditure—or any other breakdown.

The same Air Force summary says "Base Force Protection Projects" had cost $157 million to date and "Anti-Terrorism" had cost $48 million. But again, there is no further explanation of precisely what was purchased or where.

One source said the reports the Pentagon provided Defense Week, which covered the first post-Sept. 11 supplemental bill, were in fact the most specific ones given to Capitol Hill.

By contrast to the current Bush administration's 2002 documents, the justification materials that President Bush's father sent to Congress before the first Gulf War in February 1991 explained more about assumptions and rationales.

On one page of the 1991 documents, for instance, the Pentagon spelled out dollar costs of various wartime scenarios (air-only war, air-and-ground fighting, etc). The costs depended on how many aircraft and vehicles by type would be lost in combat. On another page, the 1991 papers spelled out precise assumptions about the number of reserve personnel (346,000, broken down by service) who might be called up.

Unanswered questions

Amy Belasco, U.S. defense-budget specialist with the Library of Congress' non-partisan Congressional Research Service, said: "From all the many pages of accounting information on the [first post-Sept. 11 supplemental], Congress can tell that DOD spent $42.6 million for security at the Winter Olympics compared to the $45 million that it anticipated. But we can't say how much the war in Afghanistan cost. That's because the categories that DOD adopted in the DERF don't distinguish costs by mission. It was frustrating not to be able to answer seemingly obvious questions from Congressional staffers.

"Nor can we tell from the accounting data how many troops were initially deployed for the war, how quickly they were withdrawn, or how many are there now, or what it costs to keep troops there," Belasco said. "And because we don't know that, we can't say how much DOD will need to continue the U.S. presence in Afghanistan this year or next year. DOD's comptroller has made projections of those costs, but Congress has no independent way of assessing those estimates based on experience thus far. Nor can Congress tell how much DOD spent on shoring up security at bases in the U.S., an expense that could continue for many years to come."

Steven Kosiak, director of Budget Studies at the Center for Strategic and Budgetary Assessments, a defense-budget think tank in Washington, D.C., is another keen observer of the U.S. defense budget. He said the figures provided to Congress so far offer an inadequate explanation of where the $28.5 billion has gone.

"What things cost should have some impact on what you decide to spend money on in the future and what policies you adopt," Kosiak said. "We don't really know what the war cost. We don't really know what homeland-security measures cost. We don't really know what this various stuff was used for. So it's hard to make rational decisions about where to place emphasis in the future—when you don't know how money was spent in the past and how much different activities have cost."

Danielle Brian, executive director of the Project On Government Oversight, a watchdog group, said: "I don't know who to blame more: the Pentagon for being so arrogant or Congress for being so complacent. ... More than a handful of staffers should know when you're spending that kind of money."

Brian added that even a full accounting by the Defense Department of the spending would be suspect, given the Pentagon's dysfunctional financial-management system.

$44 billion and counting

Last month, Congress added to the $28.5 billion. Lawmakers appropriated to the DERF an additional $15.7 billion. That brought the total in this account since Sept. 11 to over $44 billion.

The administration has not gotten any more informative about its aims. For example, last March, the Pentagon sent a request for supplemental funding to Capitol Hill asking for $6.7 billion "to root out terrorists worldwide." And in the supplemental request enacted last month, the Pentagon asked for $6.4 billion to procure "various critical equipment and weapon systems, such as munitions, laser targeting devices, communications, and classified programs. ..."

Congress, for its part, may be getting tougher about the emergency funding. Last month's appropriation of $15.7 billion was about 75 percent less than the president wanted. What's more, Capitol Hill attached strings to its spending bill, including requiring the Pentagon to give "details" on its spending five days before money is obligated.

Yet large chunks of the $28.5 billion enacted in the year after Sept. 11 remain MIA. And it is not yet known whether the "details" the Pentagon provides to Congress about how the latest batch of cash is spent will be any more informative than previous execution reports.

Also unclear is how much information about emergency spending on defense programs will be readily available to the public, which paid for it.

Copyright King Publishing Group, King Communications Group, Inc., All rights reserved.