The Out-of-Towner While Bush vacationed, 9/11 warnings went unheard. By Fred Kaplan Posted Wednesday, April 14, 2004

http://www.slate.com/id/2098861/

Meanwhile, back at the ranch ... Meanwhile, back at the ranch ...

In an otherwise dry day of hearings before the 9/11 commission, one brief bit of dialogue set off a sudden flash of clarity on the basic question of how our government let disaster happen.

The revelation came this morning, when CIA Director George Tenet was on the stand. Timothy Roemer, a former Democratic congressman, asked him when he first found out about the report from the FBI's Minnesota field office that Zacarias Moussaoui, an Islamic jihadist, had been taking lessons on how to fly a 747. Tenet replied that he was briefed about the case on Aug. 23 or 24, 2001.

Roemer then asked Tenet if he mentioned Moussaoui to President Bush at one of their frequent morning briefings. Tenet replied, "I was not in briefings at this time." Bush, he noted, "was on vacation." He added that he didn't see the president at all in August 2001. During the entire month, Bush was at his ranch in Texas. "You never talked with him?" Roemer asked. "No," Tenet replied. By the way, for much of August, Tenet too was, as he put it, "on leave."

And there you have it. National Security Adviser Condoleezza Rice has made a big point of the fact that Tenet briefed the president nearly every day. Yet at the peak moment of threat, the two didn't talk at all. At a time when action was needed, and orders for action had to come from the top, the man at the top was resting undisturbed.

Throughout that summer, we now well know, Tenet, Richard Clarke, and several other officials were running around with their "hair on fire," warning that al-Qaida was about to unleash a monumental attack. On Aug. 6, Bush was given the now-famous President's Daily Brief (by one of Tenet's underlings), warning that this attack might take place "inside the United States." For the previous few years—as Philip Zelikow, the commission's staff director, revealed this morning—the CIA had issued several warnings that terrorists might fly commercial airplanes into buildings or cities.

And now, we learn today, at this peak moment, Tenet hears about Moussaoui. Someone might have added 2 + 2 + 2 and possibly busted up the conspiracy. But the president was down on the ranch, taking it easy. Tenet wasn't with him. Tenet never talked with him. Rice—as she has testified—wasn't with Bush, either. He was on his own and, willfully, out of touch.

A USA Today story, written right before Bush took off, reported that the vacation—scheduled to last from Aug. 3 to Sept. 3—would tie one of Richard Nixon's as the longest that any president had ever taken. A week before he left, Bush made a videotaped message for the Boy Scouts of America. On the tape, he said, "I'll be going to my ranch in Crawford, where I'll work and take a little time off. I think it is so important for the president to spend some time away from Washington, in the heartland of America."

Dana Milbank and Mike Allen of the Washington Post recently wrote a story recalling those halcyon days in Crawford. On Aug. 7, 2001, the day after the fateful PDB, Bush, they wrote, "was in an expansive mood … when he ran into reporters while playing golf." The president's aides emphasized that he was working, now and then, on a few issues—education, immigration, Social Security, and his impending decision on stem-cell research. On Aug. 29, less than a week after Tenet found out about Moussaoui, Bush gave a speech before the American Legion. The White House press office headlined the text of the address, "President Discusses Defense Priorities." Those priorities: boosting soldiers' pay and abandoning the Anti-Ballistic-Missile Treaty. Nothing about terrorism, Osama Bin Laden, hijackings. Nothing that reflected the PDB or Moussaoui.

Anyone who has ever spent time in Washington knows that the whole town takes off the month of August. Despite the "threat spike," August 2001, it seems, was no different.

Larry Johnson, a former CIA officer and the State Department's counterterrorism chief from 1989-93, explained on MSNBC this afternoon, during a break in the hearings, why the PDB—let alone the Moussaoui finding—should have compelled everyone to rush back to Washington. In his CIA days, Johnson wrote "about 40" PDBs. They're usually dispassionate in tone, a mere paragraph or two. The PDB of Aug. 6 was a page and a half. "That's the intelligence-community equivalent of writing War and Peace," Johnson said. And the title—"Bin Laden Determined To Strike in US"—was clearly designed to set off alarm bells. Johnson told his interviewer that when he read the declassified document, "I said 'Holy smoke!' This is such a dead-on 'Mr. President, you've got to do something!' " (By the way, Johnson claimed he's a Republican who voted for Bush in 2000.)

Bush got back after Labor Day. That first day, Sept. 4, was when the "Principals Committee"—consisting of his Cabinet heads—met in the White House to discuss terrorism. As Dick Clarke has since complained, and Condi Rice and others have acknowledged, it was the first time Bush's principals held a meeting on the subject.

This morning, Roemer asked Tenet if he brought up the Moussaoui briefing at that meeting. No, Tenet replied. "It wasn't the appropriate place." Roemer didn't follow up and ask, "Why not? Where was the appropriate place?" Perhaps he was too stunned. He sure looked it.

The official story about the PDB is that the CIA prepared it at the president's request. Bush had heard all Tenet's briefings about a possible al-Qaida attack overseas, the tale goes, and he wanted to know if Bin Laden might strike here. This story is almost certainly untrue. On March 19 of this year, Tenet told the 9/11 commission that the PDB had been prepared, as usual, at a CIA analyst's initiative. He later retracted that testimony, saying the president had asked for the briefing. Tenet embellished his new narrative, saying that the CIA officer who gave the briefing to Bush and Condi Rice started by reminding the president that he had requested it. But as Rice has since testified, she was not present during the briefing; she wasn't in Texas. Someone should ask: Was that the only part of the tale that Tenet made up? Or did he invent the whole thing—and, if so, on whose orders?

The distinction is important. If Bush asked for the briefing, it suggests that he at least cared about the subject; then the puzzle becomes why he didn't follow up on its conclusions. If he didn't ask for the briefing, then he comes off as simply aloof. (It's a toss-up which conclusion is more disturbing.)

Then again, it's easy to forget that before the terrorists struck, Bush was widely regarded as an unusually aloof president. Joe Conason has calculated that up until Sept. 11, 2001, Bush had spent 54 days at the ranch, 38 days at Camp David, and four days at the Bush compound in Kennebunkport—a total of 96 days, or about 40 percent of his presidency, outside of Washington.

Yet by that inference, Bush has remained a remarkably out-of-touch—or at least out-of-town—leader, even in the two and a half years since 9/11. Dana Milbank counts that through his entire term to date, Bush has spent 500 days—again, about 40 percent of his time in office—at the ranch, the retreat, or the compound.

The 9/11 commission has unveiled many critical problems in the FBI and the CIA. But the most critical problem may have been that the president was off duty.

Update, April 15, 2004: On Wednesday evening, after the hearings, a CIA spokesman called reporters to tell them Tenet had misspoken: It turns out he did brief Bush in August 2001, twice—on Aug. 17 and Aug. 31. Assuming the correction is true, it doesn't negate the point. The first briefing, which the spokesman described as uneventful, took place before Tenet learned about Moussaoui. The second occurred after the president returned to Washington.

http://youtube.com/watch?v=xU4GdHLUHwU&feature=related

The War On Waste; Defense Department Cannot Account For 25% Of Funds — $2.3 Trillion

http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

LOS ANGELES, Jan. 29, 2002

(CBS) On Sept. 10, Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, "the adversary's closer to home. It's the Pentagon bureaucracy," he said.

He said money wasted by the military poses a serious threat.

"In fact, it could be said it's a matter of life and death," he said.

Rumsfeld promised change but the next day – Sept. 11-- the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten.

Just last week President Bush announced, "my 2003 budget calls for more than $48 billion in new defense spending."

More money for the Pentagon, CBS News Correspondent Vince Gonzales reports, while its own auditors admit the military cannot account for 25 percent of what it spends.

"According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted.

$2.3 trillion — that's $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.

"We know it's gone. But we don't know what they spent it on," said Jim Minnery, Defense Finance and Accounting Service.

Minnery, a former Marine turned whistle-blower, is risking his job by speaking out for the first time about the millions he noticed were missing from one defense agency's balance sheets. Minnery tried to follow the money trail, even crisscrossing the country looking for records.

"The director looked at me and said 'Why do you care about this stuff?' It took me aback, you know? My supervisor asking me why I care about doing a good job," said Minnery.

He was reassigned and says officials then covered up the problem by just writing it off.

"They have to cover it up," he said. "That's where the corruption comes in. They have to cover up the fact that they can't do the job."

The Pentagon's Inspector General "partially substantiated" several of Minnery's allegations but could not prove officials tried "to manipulate the financial statements."

Twenty years ago, Department of Defense Analyst Franklin C. Spinney made headlines exposing what he calls the "accounting games." He's still there, and although he does not speak for the Pentagon, he believes the problem has gotten worse.

"Those numbers are pie in the sky. The books are cooked routinely year after year," he said.

Another critic of Pentagon waste, Retired Vice Admiral Jack Shanahan, commanded the Navy's 2nd Fleet the first time Donald Rumsfeld served as Defense Secretary, in 1976.

In his opinion, "With good financial oversight we could find $48 billion in loose change in that building, without having to hit the taxpayers."

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Missing Pentagon Trillions - Where did they come from?

By Prospector | January 21, 2008

http://www.rense.com/general80/missing.htm

By Joshua Daniels

1-21-8

On September 10, 2001, Secretary of Defense Donald Rumsfeld admitted that the Pentagon had lost, by the estimate he chose to use for his speech, 2.3 trillion dollars. Many of you good readers know about this, and are asking where the money went. That’s a good question, but what really intrigues me is:

Where did it come from?

If you add up the entire US defense budgets from 1996 to 2001, you only come up with circa 1.6 trillion. Yet, according to Rummy, not only was that much money lost, but an ADDITIONAL 700 BILLION dollars has disappeared. Remember, we’re talking about 2.3 trillion dollars “missing.”

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3 Responses to “Missing Pentagon Trillions - Where did they come from?”

1. TwentyTwelve Says:

January 21st, 2008 at 8:30 pm

DOD Can’t Find $1.1 TRILLION -

Rumsfeld Inherits Financial Disaster

By Kelly Patricia O’Meara

komeara@InsightMag.com

InsightMag.com

8-15-1

The Defense Department cannot account for $1.1 trillion that seems to have

vanished within the tangled system of financial accounting put in place by

private contractors.

Every year trillions of dollars are unaccounted for by federal agencies, and

every year these same agencies are called before congressional oversight

committees to explain this mismanagement of taxpayers’ funds.

Year after year the bureaucratic mea culpas are longer on process and

shorter on substance, leaving overseers with little or no information that

is useful to correct the gross mismanagement. Take, for instance, the

financial mess at the Department of Defense (DOD).

In May, DOD Deputy Inspector General Robert Lieberman reported to

Congress that “the extensive DOD efforts to compile and audit the FY [fiscal

year] 2000 financial statements for the department as a whole and for the 10

subsidiary reporting entities like the Army, Navy and Air Force General

Funds, could not overcome the impediments caused by poor systems and

unreliable documentation of transactions and assets.”

Without ever using the word “money,” a practice common among

inspectors general (IGs), the deputy IG at the Pentagon read an eight-page

summary of DOD fiduciary failures. He admitted that $4.4 trillion in

adjustments to the Pentagon’s books had to be cooked to compile the required

financial statements and that $1.1 trillion of that amount could not be

supported by reliable information. In other words, at the end of the last

full year on Bill Clinton’s watch, more than $1 trillion was simply gone and

no one can be sure of when, where or to whom the money went.

For most Americans, an official admission that $1.1 trillion in

taxpayers’ money cannot be accounted for is incomprehensible. To put it in

perspective, consider that this missing sum would buy the following:

* nearly 14 million accounting degrees from any four-year state college,

estimating the cost at $20,000 per year;

* 36 million automobiles at an estimated cost of $30,000 each; and

* about 8 million single-family houses costing $140,000 per home.

Also, consider this:

* Assuming the average working life is 30 years, the average annual

income is $34,000 and the average federal tax on that income is $6,830,

nearly 5.5 million Americans will work their entire lives to pay $1.1

trillion in taxes.

* In fiscal 1999, 124,227,000 Americans paid a total of more than $855

billion in individual income taxes, which means that the next year the

Pentagon misplaced, lost or otherwise cannot account for all the money the

IRS collected in fiscal 1999 from individual, estate, gift, corporate and

excise taxes.

The General Accounting Office (GAO), which is the investigative arm

of Congress, wrote in its January 2001 report, DOD Major Management

Challenges and Program Risks, that the Pentagon “continues to confront

pervasive and complex financial-management problems and has been on our list

of high-risk areas vulnerable to waste, fraud, abuse and mismanagement since

1995. To date, no major part of the department’s operations has passed the

test of an independent financial audit because of pervasive weaknesses in

the department’s financial-management systems, operations and controls.”

Specifically, the GAO found that the DOD had “(1) an inability to

reconcile an estimated $7 billion difference between its available fund

balances and the Treasury’s balance; (2) there were frequent adjustments of

recorded payments between appropriation accounts - with nearly $1 of every

$3 in fiscal year 1999 contract payments representing an adjustment; and (3)

there are incorrect or unsupported obligations.”

What this means to the average American is that the Pentagon

checking-account balance doesn’t match the bank (Treasury) balance. One out

of every three dollars entered in the ledger had to be adjusted to get the

account in balance - with the Pentagon owing huge sums for which it cannot

account.

Despite the comprehensive analysis of the DOD’s finances by the GAO,

little, if any, specific information is provided about the contractors paid

hundreds of millions of dollars to put reliable and accurate

financial-accounting systems in place at DOD.

The GAO made it clear in the January report that the DOD’s

financial-management system is “flawed with decades-old problems that will

be impossible to reverse overnight: They do not comply with federal

financial-management-systems requirements and were not designed to collect

data in accordance with generally accepted accounting principles.” Yet

nowhere in the GAO report are the companies identified that were contracted

to put such systems in place.

When asked why these contractors were allowed to remain anonymous,

especially in light of the enormous amount of money at stake, GAO Director

of Financial Management and Assurance Gregory Kutz tells Insight: “That’s a

good question. I don’t think we’ve ever been asked by Congress to look at

that. Our work is mandated by Congress, and it is based on how they ask us

to carry out investigations. We tend to point the finger at the department

and not the contractors they hire. But it’s a good point and it would be

interesting to do a report about what level of blame might be placed on

specific contractors. There are pockets of excellence but, for the most

part, we’re not getting good value for our money.”

How many contractors has the DOD hired to set up a reliable

financial-management system? The GAO doesn’t have the information. In fact,

Kutz tells Insight, “I’d have to spend months trying to find who the

contractors are, and even then there is no way to be sure. With DOD you

don’t know if you have a complete list of the systems, and even then the

list probably would be several pages long. DOD has so many people building

systems for them it’s part of the problem.”

DOD public-affairs spokeswoman Susan Hansen explains that “the

systems currently in place weren’t developed to link all the information. It

isn’t one particular vendor’s fault that the system isn’t integrated. For

decades leading up to the legislation calling for auditable financial

statements, having the system linked together was not part of the vendor’s

requirements. This administration is looking at developing at DOD a

financial-management architecture - a system that works together.”

Like GAO’s Kutz, Hansen also was unable to provide a list of past or

present contractors tasked with setting up the financial-management system

at the DOD.

While it seems clear that dozens of contractors have been involved in

designing financial systems at the DOD, the names of some are known. One in

particular is on the hot seat at other federal and state agencies for

delivering systems that met neither the contractor’s promises nor the

agency’s expectations: American Management Systems Inc. (AMS).

This Fairfax, Va.-based software company last month was hit with a

$350 million lawsuit by the Federal Retirement Thrift Investment Board for

“fraudulent procurement, fraudulent performance and reckless breach of a

contract with the Board to build a computerized record-keeping system.” AMS

was contracted to “design and develop a new record-keeping system to

automate, simplify and improve the Board’s service to the Fund’s

participants.” The estimated cost of the project was $30 million.

However, more than a year later, “AMS has been unable to deliver a

reduced-function system at its most recently estimated cost of approximately

$87 million. The delays and cost overruns have been caused by AMS’ reckless

and willful misconduct.”

AMS’ problems with the Thrift Investment Board are only the latest

resulting in a string of lawsuits plaguing a company deeply involved in

developing financial-management systems for federal and state agencies -

including Vermont, where AMS’ system is used in the state’s tax department,

and Ohio, where AMS is the defendant in a class-action lawsuit involving the

child-support-payments system. Last year, AMS paid a record settlement to

Mississippi for failure to implement the system for the state’s tax

department.

How involved AMS is in developing the new “architecture” for the

DOD’s financial-management system is unknown. Neither the GAO nor the DOD

could provide specific information about the kind of contracts awarded to

AMS at the Pentagon. Despite Insight’s repeated attempts to obtain the

information from the contractor, AMS did not return the calls.

Rep. Steve Horn (R-Calif.), chairman of the House Government Reform

subcommittee on Government Efficiency, Financial Management and

Intergovernmental Relations, is concerned about all of this. He tells

Insight that “over the last few years federal agencies have made incremental

progress toward producing financial statements which received clean audits.

But good financial management also requires systems that provide accurate,

day-to-day financial information. If some government contractors are unable

to develop systems that can provide that type of information, Congress needs

to know it, and we’re asking the GAO to look into it.”

Many financial analysts familiar with contractor gouging believe that

bringing the contractors out of the shadows is the first step toward turning

around the government’s financial problems. A Wall Street analyst, who asked

not to be identified for fear of retaliation, put it this way: “How is it

that the companies hired to develop financial-management systems for

government that never seem to do the job - that can’t track the money or

produce auditable financial statements - don’t have any problem with the

financial systems in their own companies? How is it that regardless of their

size they can track their own money and come up with clean financial

statements?”

Corporate-securities attorney Jack Spidi of the Washington law firm

of Malizia, Spidi and Fisch tells Insight, “You don’t get a 10-year grace

period when you’re publicly traded. You have to submit certified audits from

day one or you’re in trouble. There’s no calling the Securities and Exchange

Commission and telling them, ‘Oh, our financial systems aren’t talking to

each other.’”

Spidi explains: “The government, if it were treated like a publicly

traded corporation on the stock exchange, would be required by the SEC to

have these systems in place and would be subject to very detailed and

rigorous accounting and reporting standards. If a large corporation like any

of the defense contractors were unable to provide financial statements, it

could lose its ability to trade on the exchange. Stockholders would be

filing lawsuits right and left, which would cause the stock to tank. The

question is: Should there be public reporting by government agencies like

all publicly traded corporations in the U.S. are required to provide? And,

if there were, would these agencies be more rigorous and careful about how

they account for the money? Public companies are accountable for the

accuracy of their financial statements; why shouldn’t government agencies be

held to the same standard?”

The situation faced by the incoming Bush administration was grave,

and nowhere graver than at the Pentagon, where insiders say Defense

Secretary Donald Rumsfeld has been heavily focused on the problem. Deputy IG

Lieberman told Congress that “although DOD has put a full decade of effort

into improving its financial reporting, it seems that everyone involved -

the Congress, the Office of Management and Budget, the audit community and

DOD managers - have been unable to determine or clearly articulate exactly

how much progress has been made.”

This soon may be remedied. With Rumsfeld demanding accountability and

hacking furiously at waste, and lawmakers now calling for an investigation

of which contractors have been paid how many hundreds of millions of dollars

for financial-reporting systems that don’t work, there is just a chance that

something may be done about that $1.1 trillion for which the Clinton

administration could not account.

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