Departments of Defense & Housing Cannot Account for $21 Trillion in Unauthorized Spending (VIDEO)

Two departments of the US federal government may have spent as much as $21 trillion they can’t account for between 1998 and 2015, a professor at Michigan State University has discovered. Papers supporting the study briefly went missing just as an audit was announced for the very first time.

Mark Skidmore, a Professor of Economics at MSU specializing in public finance, and a group of graduate students made the discovery after overhearing Catherine Austin-Fitts, a former Assistant Secretary for the Department of Housing and Urban Development (HUD) from the first Bush administration, announce that the July 2016 report by the Department of Defense’s Office of Inspector General (DoDIG) had indicated $6.5 trillion worth of military spending that had not been adequately documented.

They came up with the figure after digging through the websites of the  Department of Defense (DoD) and the Department of Housing and Urban Development (HUD) as well as reports by the Office of the Inspector General (OIG) over the summer.

Skidmore had assumed Austin-Fitts must be mistaking billion for trillion. Based on his previous experience with public finances, he thought the figure was too big even for an organization as large as the US military.

Attempting to uncover the reasoning behind these adjustments, Skidmore began to dig deeper. He says, “I tried to call and talk to the office of the Inspector General to talk to the people who helped generate these reports. I haven’t been successful, and I stopped trying when they disabled the links.

In early December the authors of the research discovered that the links to key document they used, including the 2016 report, had been disabled. Days later, the documents were reposted under different addresses, they say.

Despite disabled links and neglect from officials, the verification of over $6 trillion inspired Skidmore and his students to comb through thousands of Office of Inspector General (OIG) reports for the years 1998 through 2015.

“Sometimes you have an adjustment just because you don’t have adequate transactions… so an auditor would just recede. Usually it’s just a small portion of authorized spending, maybe one percent at most. So for the Army one percent would be $1.2 billion of transactions that you just can’t account for,” Skidmore explained in an interview with last month.

Aerial view of the Pentagon.


While it is known that the US government engages in unauthorized spending and black budgets, quantities this enormous grossly abuse basic Constitutional and legislative requirements on government spending.

Skidmore also co-authored a column on Forbes, explaining his research.

The same week the interview took place the DoD announced that it will conduct its first-ever audit“It is important that the Congress and the American people have confidence in DoD’s management of every taxpayer dollar,” Comptroller David Norquist told reporters as he explained that the OIG has hired independent auditors to dig through the military finances.

Shortly after Skidmore’s findings went public, the Pentagon announced that it will conduct the first ever audit of the Department of Defense (DoD). Despite having $2.2 trillion in assets and billions of dollars flowing through each year, the DoD has famously never been audited. The audits are set to begin in 2018 and occur annually. “It is important that the Congress and the American people have confidence in DoD’s management of every taxpayer dollar,” DoD Comptroller David L. Norquist told reporters as he explained that the OIG has hired independent auditors to dig through the military finances.

In addition to depriving the public of access to US financial accounting reports by disabling links, the Department of Defense’s clever implementation of an audit bent this twisted act into a positive endeavor for DoD in the eyes of the public. Apart from Forbes’ brief report on the adjustments and NPR’s recognition of the first audit, US corporate media has failed to inform the public about any of the details concerning the shocking findings of Mark Skidmore’s research.

After discovering that the figure was accurate, he and Fitts collaborated with a pair of graduate students to comb through thousands of reports of the OIG dating back to 1998, when new rules of public accountability for the federal government were set and all the way to 2015, the time of the latest reports available at the time. The research was only for the DoD and the HUD.

“This is incomplete, but we have found $21 trillion in adjustments over that period. The biggest chunk is for the Army. We were able to find 13 of the 17 years and we found about $11.5 trillion just for the Army,” Skidmore said.

U.S. Air Force F-35A
© Daniel Hughes

The professor would not suggest whether the missing trillions went to some legitimate undisclosed projects, wasted or misappropriated, but believes his find indicates that there is something profoundly wrong with the budgeting process in the US federal government. Such lack of transparency goes against the due process of authorizing federal spending through the US Congress, he said.

“While we can’t know for sure what role our efforts to compile original government documents and share them with the public has played, we believe it may have made a difference,” Skidmore commented.

* This article was expanded from original report by RT America.


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