[Congressional Record Volume 164, Number 116 (Wednesday, July 11, 2018)]
[Senate]
[Pages S4907-S4908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                    Department of Defense Oversight

  Mr. GRASSLEY. Mr. President, I come to the floor today to discuss the 
continuing need for addressing hard-hitting oversight of the Department 
of Defense. That need for oversight is as great today as it ever was. 
Waste is alive and very well at the Pentagon.
  I have a poster, a blowup of a cartoon published in the Washington 
Post in 1985, during my early years in the U.S. Senate. It shows Ernie 
Fitzgerald, a famous whistleblower, confronting what are quite 
obviously his chief adversaries, the big spenders at the Pentagon.
  As a senior Air Force official, Ernie Fitzgerald committed a crime. 
He says he ``committed truth.'' Ernie Fitzgerald is famous for, in 
1968, exposing a $2.3 billion cost overrun on the C-5 aircraft program. 
In those days, having a senior Pentagon official like Ernie Fitzgerald 
speak the truth about a cost overrun on a high visibility program was 
unheard of. In fact, it was dangerous. It was so dangerous that it cost 
Ernie Fitzgerald his job. That is why I like to call Ernie Fitzgerald 
the father of whistleblowers.
  The cartoon also depicts the infamous $640 toilet seat that made 
history back in those days as one example of the terrible waste at the 
Defense Department. That happened in 1985, when I, as a first-term 
Senator, began watchdogging the Pentagon. After a report uncovered a 
$640 toilet seat and a $400 hammer, I began asking very tough 
questions, such as: How could the bureaucrats possibly justify paying 
such exorbitant prices? I am still waiting for a straight answer.
  A lot has changed since the 1980s. The internet, which was in its 
infancy in the 1980s, is now a part of everyday life. Mobile phones 
back then were once the size of bricks. Now those mobile phones can fit 
in the palm of your hand and do a lot more work than just making 
telephone calls. But one thing hasn't changed in all those decades--
wasteful Department of Defense procurement practices.
  Since I began my work on this issue, there have been 6 Presidents and 
12 Secretaries of Defense, yet the problem of wasteful spending at the 
Defense Department keeps going on. Since those earliest revelations, 
there has been a steady flow of new reports on spare part rip-offs. No 
political party is immune from these horror stories.
  During the administration of George H.W. Bush, oversight efforts 
uncovered soap dishes that cost $117 and pliers that cost nearly 
$1,000. In some cases the Department of Defense admitted that some high 
prices didn't pass the smell test.
  True, better deals were negotiated. People tried to make some 
changes, but to offset losses on lower prices, the contractors jacked 
up overhead and management charges, making the overall contract price 
the same.
  Exercising oversight on these contracts is like working with a 
balloon. You know the famous balloon--when you squeeze it in one place, 
the problem pops out someplace else.
  Under President Bill Clinton, a report by the Government 
Accountability Office--we know it here as the GAO--revealed that one 
defense contractor paid its top executives more than $33 million a 
year, an amount that was reimbursed by the Federal Government as part 
of a contract.
  I happen to agree that a company has a right to pay its executives 
whatever it wants; however, when the government enters into cost-
reimbursement contracts, those contracts in which the government 
directly repays the company for costs incurred instead of paying a 
fixed price, the contractor loses incentive to control costs, and top 
executives draw sky-high salaries at the taxpayers' expense.
  I introduced an amendment in the 1997 Defense authorization bill to 
curb executive compensation billed directly to the taxpayers, but as 
you might expect, with the respect the Defense Department has in this 
body, that amendment was voted down.
  During the Bush administration in the early 2000s, I worked with the 
GAO to expose abuse of government charge cards by Defense Department 
employees. We found some truly egregious expenditures--for examples, 
over $20,000 at a jewelry store, over $34,000 on gambling, and over 
$70,000 on tickets to sporting events and Broadway shows. In some 
cases, employees who spent thousands of taxpayer dollars on personal 
expenses--way beyond anything that was an ordinary business expense--
were not only not asked to repay the money to the taxpayers but oddly 
were promoted and even issued new charge cards. Instead of being held 
accountable, it is quite obvious they were rewarded for their illegal 
activity.
  During the Presidency of President Obama, I pressed the Pentagon to 
answer for a $43 million gas station built in Afghanistan. This project 
was revealed as part of an audit conducted by the Special Inspector 
General for Afghan Reconstruction. When I pressed for answers, the 
Defense Department responded by saying that the direct cost was 
actually only $5 million, but the number didn't include the massive 
overhead costs charged to the project, which pushed the overall price 
tag up to that $43 million. Anybody anywhere else--outside the 
beltway--knows that doesn't meet the smell test, and that is not even a 
commonsense answer to my overall question. How did we waste $43 million 
there?
  Even more alarming is what happened to the rest of the $800 million 
provided for other business development projects in our efforts to help 
Afghanistan recover. Auditors could only find documentation to support 
about half of the money spent, leaving about $400 million unaccounted 
for. This kind of sloppy bookkeeping means we may never know how the 
rest of the money was spent. Was it used for unauthorized purposes or 
pocketed by crooked people? We will probably never know.
  Now, under the Presidency of Donald Trump, over 30 years since all 
this started with me, the overpriced airborne toilet seat has really 
gained altitude. Instead of the $640 that this cost, the new pricetag 
was reported by the Air Force to be $10,000, and that happens to be 
only for the lid of the toilet stool. Any American can tell you that 
$10,000 for a toilet seat cover is ridiculous. Americans work too hard 
to see their precious tax dollars flushed down the toilet.
  I asked the Department of Defense for confirmation that the seats 
cost $10,000. They still haven't answered my letter, but after my 
inquiry, the Department of Defense has changed their story. They 
clarified to the media that they are now 3D printing the toilet seat 
lids for much less, but they never answered my questions. We don't know 
how many seat covers were purchased at the $10,000 pricetag; we don't 
know when they moved to 3D printing instead of purchasing; and we still 
don't have documentation or official confirmation on the true price of 
toilet seat lids.
  Even if the issue of the toilet seat has been sorted out, it is clear 
the Department of Defense still does not have a grip on spending. OIG 
reports have revealed that the Pentagon frequently overpays for simple 
parts and does not perform adequate cost analysis.
  One of the primary culprits for continuing waste and misuse of tax 
dollars is the Department of Defense's noncompliance with the 
congressional

[[Page S4908]]

mandate to pass an audit. The Department of Defense has a very bad 
record. It is impossible to know how much things cost or what is being 
bought when nobody is keeping good track of the money being shoveled 
out the door.
  For nearly 30 years, we have been pushing the Pentagon to earn a 
clean opinion on any of their audits. Way back in 1990, Congress passed 
the Chief Financial Officers Act, which required all departments of the 
government to present a financial statement to an inspector general for 
audit by March 1992. All departments have complied and earned clean 
opinions except one and that is the Department of Defense. Instead of 
clean opinions, the Department of Defense has earned a long string of 
failing opinions called disclaimers. It boils down to the fact that the 
books at the Department of Defense are unauditable.
  In 2010, 20 years after that 1990 congressional action, Congress 
finally got fed up and passed a new law requiring the Pentagon to be 
ready for audit by September 2017. The Department was given 7 long 
years to get its act together and to meet the same requirements as 
every other Federal agency entrusted with public money. Obviously, that 
deadline has come and gone like other deadlines have come and gone. 
According to the Comptroller and Chief Financial Officer, Mr. David 
Norquist, a clean audit is still at least 10 years away. That is 10 
years of not being able to follow the money. If you can't follow the 
money, you don't know whether it is spent legally.
  There is a longstanding, underlying problem preventing the Pentagon 
from reaching the goal of a clean audit. This is the so-called feeder 
system. I will not describe a feeder system, but feeder systems are 
supposed to capture transaction data, but those feeder systems are 
broken. Auditors cannot connect the dots between contracts and 
payments. You can't follow the money because there is no reliable 
transaction data and little or no supporting documentation. You tend to 
spend money without knowing what you even bought. The Pentagon will 
never earn a clean opinion until those accounting systems are able to 
produce reliable financial data that meet accepted standards.
  Over the last 25 years, the Department of Defense has spent billions 
trying to fix these outdated accounting systems but with no success. 
How is it that the very mighty Pentagon can develop the most advanced 
weapons in the world but can't seem to acquire something as simple as 
an accounting system? We need to get to the bottom of this problem and 
fix it.
  I am working with my colleagues on the Budget Committee to get the 
Government Accountability Office to conduct an independent review of 
the Pentagon's effort to acquire modern accounting systems. What is the 
problem? That is what we are trying to find out. Should the Defense 
Department keep trying to fix the antiquated feeder systems or is it 
time to develop new, fully integrated systems that can deliver reliable 
financial information? We need and we want some answers.
  The Department of Defense is currently attempting to conduct a full 
financial audit. Secretary Mattis has directed all employees to support 
the audit, and the results are expected in November. Although the new 
Chief Financial Officer appears to be making a good-faith effort to get 
a handle on the problem, he also happens to be spending hundreds of 
millions of dollars a year for audits with a zero probability of 
success. It could be very wasteful spending that kind of money if they 
don't have a feeder system in place.
  The first priority of our Federal Government remains and ought to be 
national security. We must ensure that our military forces remain 
strong enough to deter any potential aggressor and, as a result, 
preserve the peace.
  The men and women on the frontlines deserve fair compensation and the 
best weapons and equipment money can buy. We want to field the most 
capable military force in the world. Because national defense is so 
very important, congressional watchdogging of defense spending is very 
essential. We don't want one single dollar to be wasted--not even a 
penny.
  Until the Defense Department is able to earn a clean opinion on a 
very regular basis, we have no assurance that Defense dollars are being 
spent wisely and, most importantly, according to law. Report after 
report shows that precious Defense dollars are being wasted, misused, 
and unaccounted for. Reforms have been made, but very clearly the war 
on waste has not been won. Much more work needs to be done.
  From my oversight post in the Senate, I will continue to apply 
pressure on the Pentagon to step up the war on waste. I don't expect 
much help from the inspector general. Mr. Fine seems to be AWOL on 
waste. I raised the issue of the $10,000 toilet seat cover with him 
over a month ago and still haven't received an answer. His office found 
the time to update the media about the toilet seat cover. Yet my letter 
has gone unanswered.
  However, after revelations about the $43 million gas station, 
Secretary Mattis's reaction was sweet music to my ears. He issued an 
all-hands memo. In that memo, he stated flatout: I will not tolerate 
that kind of waste. Known for being a man of your word, Secretary 
Mattis, I am counting on you for your help. Maybe together we can wipe 
out the culture of indifference toward the American people's money by 
the Pentagon.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Ms. CORTEZ MASTO. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.