Obama's Serious About Taking an Axe to Corruption and Waste at the Pentagon

Of all Barack Obama’s promises of reform, perhaps the most audacious is his pledge to “restore honesty, openness, and commonsense to Pentagon contracting and procurement.” Washington is littered with the open-jawed skeletons of such efforts, and given the historic length of the White House to-do list, some might say taking on the defense establishment smacks of hubris. But a raft of recent statements, directives, and appointments indicate the administration fully intends to chaperone Pentagon shopping trips and hold defense contractors accountable in a way they never have been before.

For good reason, the president doesn’t specify exactly which golden-age standards he has in mind for the restoration of honesty and openness. In the half-century since Dwight Eisenhower’s farewell warning about an unaccountable “military-industrial complex,” not much has changed. Countless blue-ribbon commissions, white papers, and special hearings on the Hill have been set up to reform the system. Yet most defense analysts agree the problem is worse than ever. The Government Accountability Office estimates that 40 percent of Pentagon acquisitions come in over cost, the most since records began. Five percent of the military’s current base budget of $533 billion is thought to be lost through corruption every year. Other billions are simply unaccounted for in the Pentagon’s books, larger versions of those missing unmarked bricks of reconstruction cash we sent to Iraq by the hockey bag.

“We’re spending more than ever before for less and less,” says Winslow Wheeler, a lion among Washington’s defense reformers and director of the Straus Military Reform Project at the Center for Defense Information. “It’s a meltdown.”

Fulfilling a campaign pledge, the president has moved swiftly to address the problem. The White House has put an end to no-bid contracts and instructed the Justice Department to sniff out and prosecute cases of contractor waste and theft. Most important, on March 4, the White House ordered the Office of Management and Budget (OMB) to craft strict new guidelines for overseeing contracts government-wide. In announcing this directive, the president singled out the Department of Defense, putting the Pentagon and its practically in-house contractors on notice that the days of “blank checks” are over.

Echoes of the president’s frustration can be heard in Congress, where Carl Levin and John McCain have introduced legislation to increase competition and make it easier to pull the plug on weapons programs that overshoot advertised cost. Meanwhile, at the Defense Department, Robert Gates has been making his own noises about the dawn of a more sober era in what the Pentagon buys and how. 

If Gates proves the primary engine of reform at the Pentagon, he won’t be alone. Running the Pentagon’s acquisition’s office will be Ashton Carter, a reform-minded policy scholar and physicist who worked in Clinton’s Pentagon on non-proliferation issues. As the department’s weapons czar, Carter will preside over all meetings between Pentagon officials and contractors. He will decide, in consultation with the Defense Secretary and the White House, which weapons to buy, cut back, and kill. While some defense watchers say Carter lacks the acquisition experience and bureaucratic dog-fighting skills necessary to face down the defense executives, lobbyists, and generals who will be defending some $400 billion in business for contracted goods and services -- “They’ll view him as a plaything,” says one former employee of a major defense contractor -- others say he may prove a tiger.