Who's Afraid of the Big, Bad Wolfowitz

He Bungled Iraq, the Pentagon, and East Timor. Look Out, World Bank—Here He Comes

To some, Paul Wolfowitz's nomination to be president of the World Bank is yet another sign of neoconservative political hegemony; to others, it smacks of a setback for the neocons, as it means one of their top (though least doctrinaire) defense intellectuals will, for the first time in his career, be using balance sheets, not bullets, as instruments for realizing formidable political vision.

How well he'll do is anyone's guess. There were, however, a few comments of optimistic or deferential cast in Tuesday's papers regarding the deputy secretary of defense that bear commenting on, in the service of divining what we're likely to see from the architect of "free and democratic Iraq"—which a report released yesterday by the anti-corruption group Transparency International reveals is reeling with corruption and graft, thanks in part to the poor planning and practices of the U.S.-led invasion and occupation that was Wolfowitz's baby.

Deputy Secretary of Defense Paul Wolfowitz.
photo: Courtesy of U.S. Dept. of Defense
Deputy Secretary of Defense Paul Wolfowitz.

He helped manage a large organization. The World Bank's a large organization; the Pentagon's a large organization. He's been involved in the management of that organization. George W. Bush, March 16

Ah, but how well has he helped manage it? Late last year the Government Accountability Office (Congress's investigative arm) released a report on how effectively and efficiently the Pentagon's "transformation" of the armed services—an effort running to the hundreds of billions of dollars—has been going. The report pointedly noted an "absence of clear leadership and accountability" at the Pentagon's top tier—not exactly a ringing endorsement.

Citing the deputy secretary and Secretary Donald Rumsfeld specifically, the report concluded the Wolfowitz and other top Department of Defense officials haven't done a stellar job of "maintain[ing] the oversight, focus and momentum needed to resolve the weaknesses in DOD's business operations." The result, concluded the GAO, has been a "lack of transparency and appropriate accountability across all of DOD's major business areas [that] results in billions of dollars in annual wasted resources in a time of increasing fiscal constraint."

That was just with regard to "transformation." About this time last year, Comptroller General David M. Walker (the GAO's chief) gave Congress a verbal update on a critical 2002 GAO report about across-the-board Pentagon financial management problems. Since 2002, Walker said, things hadn't got much better. The principal reasons included a "lack of sustained top-level leadership and management accountability for correcting problems".

While Walker did give Rumsfeld and Wolfowitz points for at least talking about addressing these problems, he added that they've been heavy on talk and light on walk, and he called for a much higher level of "direct, active support and involvement of Secretary and Deputy Secretary . . . in achieving shared, agency-wide outcomes and successes." Walker noted that these were not trivial matters, and that the current Pentagon leadership's lack of attention to them has helped enable a continuing "existence of pervasive weaknesses in DOD's financial management" that has "hindered operational efficiency, adversely affected mission performance and left the department vulnerable to fraud, waste and abuse."

Walker went on to cite some examples of what poor financial and operational management atop the Pentagon has wrought—examples that would not seem to portend well for a Wolfowitz-run World Bank. Among the dubious financial and accounting achievements that have occurred on Wolfowitz's watch:

  • Weak Iraq-related distribution and accountability processes that have screwed both the American solider and American taxpayer. "These weaknesses," he revealed, "resulted in (1) supply shortages, (2) backlogs of material delivered in theater but not delivered to the requesting activity, (3) a discrepancy of $1.2 billion between the amount of material shipped and that acknowledged by the activity as received, (4) cannibalization of vehicles, and (5) duplicate supply requisitions."

  • Helping defense contractors abuse the federal tax system with impunity. "Under the Debt Collection Act of 1996, DOD is responsible—working with the Treasury Department—for offsetting payments made to contractors to collect funds owed, such as unpaid federal taxes," Walker said. "However, we found that DOD had collected only $687,000 of unpaid taxes over the last six years. We estimated that at least $100 million could be collected annually from DOD contractors through effective implementation of levy and debt collection programs."

  • Proliferation of Weapons of Mass Destruction constructive material from DOD's own inventory. "Using a fictitious company and fictitious individual identities," Walker reported, "we were able to purchase a large number of new and usable equipment items over the Internet from DOD," including "a bacteriological incubator, a centrifuge, and other items that could be used to produce biological warfare agents."

  • Putting civilians in danger by neglecting environmental responsibilities. "DOD continues to lack a complete inventory of contaminated and real property sites, which affects not only DOD's ability to assess the potential environmental impact and to plan, estimate costs, and fund cleanup activities, but also its ability to minimize the risk of civilian exposure to unexploded ordnance," Walker reported. "The risk of such exposure is expected to grow with the increase in development and recreational activities on land once used by the military for munitions-related activities."

  • Letting insurers bilk the Pentagon. "Tens of millions of dollars are not being collected each year by military treatment facilities from third-party insurers because key information required to effectively bill and collect from third-party insurers is often not properly collected, recorded or used by military treatment facilities."
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