Senator Bernie Sanders has rallied a team of senators to implore the Pentagon to scrutinize the blatant price gouging by military contractors. A recent exposé by CBS News aired on “60 Minutes” substantiated accusations that private corporations are grossly inflating prices charged to the Defense Department for arms and equipment. This pricing scandal translates into hundreds of millions in unnecessary taxpayer spending and windfall profits for the weapons industry.
The letter to Defense Secretary Lloyd Austin, penned by Sanders and fellow Senators Elizabeth Warren, Ron Wyden, Mike Braun, and Chuck Grassley, cited the CBS News six-month investigation. “This investigation revealed astronomical overcharges by defense contractors amounting to hundreds of millions of dollars,” the letter states.
The letter further noted, “As per the CBS report, DOD’s set-price contracts usually allowed private profits in the range of 12-15%. However, Pentagon analysts discovered overcharges that inflated total profits to nearly 40% and sometimes a staggering 4,000%. Major culprits include Lockheed Martin, Boeing, Raytheon, and TransDigm, who’ve been fleecing the department and U.S. taxpayers, while reveling in huge profits, rocketing stock prices, and lavish executive compensation packages.”
Sanders and his colleagues lambasted the Pentagon for its monumental failures in oversight. They noted that the CBS investigation underscored persistent concerns regarding the department’s inability to pass an audit, maintain precise financial records, or protect against fraud risk in the multibillion-dollar contracts awarded annually.
Last year, Sanders, Wyden, Grassley, and others proposed a bill that would mandate a full, independent audit of the Pentagon. Unfortunately, it didn’t make it to a floor vote in either house of Congress.
The senators’ missive emphasized that the DOD can no longer anticipate the tolerance of Congress or American taxpayers towards unchecked military spending. This comes at a time when the Pentagon is demanding $842 billion for the fiscal year 2024, and Republicans are clamoring for increased military spending during debt ceiling discussions with the Biden administration.
Currently, the U.S. military budget surpasses the combined military spending of over 144 countries. Approximately half of the Pentagon’s yearly budget lines the pockets of private corporations. These corporations are flagged by a recent Defense Department-backed study as “profitable” and amassing “substantial amounts of cash beyond their needs for operations or capital investment.”
William Hartung, a senior research fellow at the Quincy Institute for Responsible Statecraft, highlighted this week that the Pentagon’s chronic oversight shortcomings will likely worsen due to the rush to quickly augment production to support Ukraine and store systems relevant to potential conflict with China.
Hartung cautioned, “As spending surges and scrutiny diminishes, the likelihood of fraud, waste, and abuse increases. The arms industry and its allies in Congress and the Pentagon aim to make any alterations related to the Ukraine crisis permanent, potentially supercharging the weapons industry while diluting oversight and accountability.”
This setup paves the way for unending, unwarranted price hikes, which could persist long after the resolution of the Ukraine war. It’s time to pull back the curtain on this unchecked profiteering at the expense of taxpayers.
