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Pentagon IG overlooking fraud, Grassley says

Updated 8:33 p.m.
The Pentagon's official watchdog has gotten lazy and isn't paying attention to signs of fraud and abuse in defense contracting, according to Sen. Charles E. Grassley (R-Iowa).

Grassley's staff launched their own audit of the Pentagon's auditors - the Department of Defense Office of the Inspector General -- after receiving anonymous notes alleging misconduct and low productivity at the agency.

In a 73-page report released Wednesday, Grassley found that the Inspector General last year essentially abandoned its mission of auditing defense contracts, largely because the Pentagon's accounting system is so "broken" that no audit trail is possible. Last year, he said, the 765 auditors in the inspector general's office were unable to document "any measurable fraud" in defense contracts - something that Grassley found hard to believe.

"Oversight is gravely impaired, leaving huge sums of the taxpayers' money vulnerable to fraud and outright theft," Grassley wrote in his report. "The OIG Audit junkyard dog has been de-fanged and rendered harmless."

Instead of pursuing contract fraud, the Pentagon's watchdog has been conducting defense policy reviews, "which yields zero benefits to the taxpayer," Grassley wrote. "They deserve the title: 'DOD Policy Police.' "

In a statement Wednesday evening, Inspector General Gordon S. Heddell did not dispute Grassley's findings and said his office would embrace some of the senator's recommendations.

"I'm in the process of transforming the Department of Defense Office of the Inspector General," Heddell said. "The observations and recommendations made by Senator Grassley are relevant -- and important -- but they are only one piece of a much bigger transformation that I embarked upon well over a year ago when I was confirmed by the Senate."

By Craig Whitlock  | September 8, 2010; 5:18 PM ET
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The inspector-generals are themselves knee-deep in fraud. The last one had to resign because he failed to mention a conflict of interest involving his contractor brother. The one before that ran off and joined Blackwater - soon after exonerating them of wrongdoing in their Iraq billing.

The Pentagon is by far the most crooked Dept in Washington (well, Arlington).

More money goes missing there than in the rest of the govt put together. For all the wittering about "honor and duty", that building contains the world's largest collection of crooks, chisellers, parasites, and useless moochers off the taxpayer.

Just a thought - why not try giving senior Pentagon management and policy posts to people who AREN'T executives from the arms industry?

Posted by: bourassa1 | September 8, 2010 6:43 PM | Report abuse

"Very few international diplomacy issues can be solved without Pentagon involvement." This message brought to you by America's arms merchants and beltway bandits everywhere. The Pentagon: Where millions go missing every day.

Posted by: BlueTwo1 | September 8, 2010 8:01 PM | Report abuse

Sure they are.

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Posted by: shoestrade42 | September 8, 2010 9:47 PM | Report abuse

Blackwater. Where was Grassley during all of their no-bid contracts and the shoddy work they did for the tropps?

Posted by: rlj611 | September 8, 2010 11:12 PM | Report abuse

Ah yes, election time, and Chuck needs to act like hes concerned for us. Remember the death panels he spoke of? Retire.

Posted by: jimbobkalina | September 9, 2010 1:47 AM | Report abuse

I disagree with the Senator that the fraud is occurring because DoD's financial system is outdated.

The wars, Wall Street Scheming, Bank Raids, etc. are precisely designed to defraud the taxpayers.

Software has nothing to do with it.

Posted by: kishorgala | September 9, 2010 5:24 PM | Report abuse

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