The Center for Public Integrity

A former executive for the Pentagon’s top defense contractor collected $1.66 million in salary, consulting fees and retirement pay from two top defense contractors last year before becoming the Republican chief of staff for the Senate Armed Services Committee in February.

The appointment is the second by a Republican member of either the House or Senate Armed Services committee to provoke criticism from independent groups that consider it a conflict of interest.

Ann Elise Sauer, who was appointed to her present job by Sen. John McCain, R-Ariz., worked for more than a decade as a vice president and lobbyist for Lockheed Martin before leaving in Jan. 2011, according to a financial disclosure she made to the Secretary of the Senate in April.

In 2011, she was paid a salary and bonus totalling $660,390, deferred compensation of $769,574, and $232,872 labeled as “retired pay” on the financial disclosure form. Lockheed is the Defense Department’s largest corporate contractor, earning $28.3 billion, or 61 percent, of its sales from the department in 2011, according to the company’s annual report.

The M1 Abrams tank has survived the Cold War, two conflicts in Iraq and a decade of war in Afghanistan. No wonder — it weighs as much as nine elephants and is fitted with a cannon capable of turning a building to rubble from two and a half miles away.

But now the machine finds itself a target in an unusual battle between the Defense Department and lawmakers who are the beneficiaries of large donations by its manufacturer.

The Pentagon, facing smaller budgets and looking towards a new global strategy, has decided it wants to save as much as $3 billion by freezing refurbishment of the M1 from 2014 to 2017, so it can redesign the hulking, clanking vehicle from top to bottom.

Its proposal would idle a large factory in Lima, Ohio as well as halt work at dozens of subcontractors in Pennsylvania, Michigan and other states.

Opposing the Pentagon’s plans is Abrams manufacturer General Dynamics, a nationwide employer that has pumped millions of dollars into congressional elections over the last decade. The tank’s supporters on Capitol Hill say they are desperate to save jobs in their districts and concerned about undermining America’s military capabilities.

So far, the contractor is winning the battle, after a well-organized campaign of lobbying and political donations involving the lawmakers who sit on four key committees that will decide the tank's fate, according to an analysis of spending and lobbying records by the Center for Public Integrity.

Sharp spikes in the company’s donations — including a two-week period in 2011 when its employees and political action committee sent the lawmakers checks for their campaigns totaling nearly $50,000 — roughly coincided with five legislative milestones for the Abrams, including committee hearings and votes and the defense bill’s final passage last year.

The Center for Public Integrity used two datasets compiled by the Center for Responsive Politics. The first was a database of all Federal Elections Commission records containing the campaign contributions from certain defense contractors. The other database from the Senate Office of Public Records included the lobbying efforts of those contractors.

For the campaign contributions, the Center included individual donations made by top executives of these companies, donations to candidates and committees by the companies’ political action committees (PACs) and the PACs of their subsidiaries.

From these data, the Center selected donations made by General Dynamics executives, the company’s PAC and the PACs of affiliated companies. The Center also built a table of members of key defense committees going back to 2001, identifying all leadership PACs of defense members, and also a table of information that contains campaign donations and defense committee affiliations of anyone who signed an Abrams Tank-related letter dated June 20, 2012, which advocated for continued funding for the program.

By joining the separate tables to the FEC and SOPR data, the Center used descriptive statistics to see relationships among General Dynamics and members of Congress, especially those who sit on committees that have authority approving legislation related to the Abrams Tank.

Federal officials in charge of detecting dangerous nuclear materials charted a new strategy at a House hearing on July 26, in the aftermath of the government’s failed attempt to build large, advanced radiation scanners for ports and border crossings.

Huban Gowadia, the acting director for the Domestic Nuclear Detection Office, said her office will sharply increase the use of hand-held monitors, which she said are both cheaper and more reliable than the stationary scanners the government spent six years trying to develop.

But she emphasized that the task of preventing the importation of dangerous nuclear materials — including those that could be fashioned into  so-called “dirty bombs” — remained an “inherently difficult technical task,” and offered no near-term, comprehensive solution.

The nuclear detection office, part of the Homeland Security department, sunk $230 million into developing 13 Advanced Spectroscopic Portals that scientists and nuclear security experts assessed as a bad investment.

In 2011, the National Academy of Sciences reported that much of the nuclear detection office’s testing on its own product was “misleading.” The academy found that the new machines, despite their high price tag, offered little improvement over previous technology and even performed worse in some key areas, such as detecting radiation that would have been “masked,” or concealed in lead lining, for example.

The new machines cost $1.2 million each to develop — twice as much as older radiation monitors that the government deployed at nearly 600 locations after the 2001 terrorist attacks. According to the Raytheon Corporation, one of the developers of the new machines, the older ones were unable to distinguish between genuine threats and naturally-radioactive fertilizer or bananas — requiring costly second inspections whenever they alarm.

Multiple Pentagon efforts to account precisely for the flow of military spending are facing major delays and at least an $8 billion cost overrun, according to a new report by the Defense Department’s inspector general.

The internal watchdog, in a report last week, said that the military services have missed their deadlines for designing and integrating new accounting software meant to bring their bookkeeping up to modern standards and manage their parts and weapons inventories more efficiently. In the Army’s case, the launch date for its new accounting system has slid 12 years, from 2004 to 2016.         

The delays threaten to derail Defense Secretary Leon Panetta’s goal of completing a major financial audit for the Pentagon by 2017, according to the inspector general’s report. The aim of such audits is give the Pentagon’s top brass a better understanding of how their funds are being spent and help avoid misspending and waste.

Accounting software systems for the Navy and Air Force have also experienced delays and cost overruns. Launch of the Air Force’s program, managed by Accenture, has been postponed from October 2009 launch to April 2017, and its cost has jumped from $420 million to almost $2.2 billion, according to the new report. The Navy’s program, developed by IBM, is to be launched in August 2013, more than two years behind schedule.

“As a result of the schedule delays, DoD will continue using outdated legacy systems and diminish the estimated savings associated with transforming business operations through … modernization,” said Amy J. Frontz, the principal assistant inspector general for auditing, in an introduction to the report.

For years, the U.S. has pursued a reliable missile defense shield. But major parts of the program need better management or the entire effort will experience serious delays, says a new report from the Government Accountability Office.

Cost estimates and timetables for five key missile defense programs are “either not reliable or the program is missing information that could make it more efficient,” according to the report, released Friday.

Systems analyzed by the GAO were the Standard Missile-3 (SM-3) Block IIA, Aegis Ashore, Ground-based Midcourse Defense (GMD), Precision Tracking Space System (PTSS), and the Targets and Countermeasures Extended Medium-Range Ballistic Missile.

GAO lists ten “best practices” that the programs should be following, and found only four cases — out of a possible 50 — where the programs “fully” met these criteria. In ten cases the criteria were just “minimally” met. To help improve the “transparency and needed accountability” of the programs, GAO recommended that they be directed to “improve their compliance” with best practices. For long term solutions, managers need to do a better job of overseeing and pacing the work, the report said.

In its response to a draft version of the report, officials at the Pentagon said they agreed with GAO’s overall findings and recommendations.  

The GAO's review included a reminder that the agency has “consistently reported … troubled acquisition histories” for the missile defense effort. One such report came in April. That study found that President Barack Obama’s administration was repeating a mistake made by his predecessor, George W. Bush.

The Obama administration’s top nuclear disarmament expert expressed concern Friday over partisan sentiments on Capitol Hill that could affect the passage of a key nuclear treaty.

A government watchdog is calling for tighter — and more coordinated — cyber security efforts by federal agencies to protect the U.S. electricity grid, a potentially vulnerable target for U.S. enemies.

The volume of malicious software and online attacks targeting overall U.S. computer networks has tripled in the last two years, raising the possibility of an eventual threat to the flow of electric power to homes, businesses, and the Internet itself, according to a Government Accountability Office report released Tuesday.

“Terrorists, hackers, and other non-government groups all have the desire and are trying to gain the ability to get into our electricity infrastructure,” Gregory Wilhusen, the director for information security issues at GAO, said in an interview. “The impact of widespread outages could have national security implications. And, in residential areas, it not only affects homes and customers. It also has major effects on commerce.”

According to a report three weeks ago by the Department of Homeland Security’s Computer Emergency Response Team, reported attacks on organizations in the electrical energy sector in the U.S. have increased from three in 2009 to 31 in 2011. These amounted to 21 percent of the total reported in that time period.

Several of the attacks cited in the report were carried out through spear-phishing, an attempt to steal information for monetary gain. In one case, an employee at what the report identified only as a “bulk electric power organization” opened to door to hackers merely by clicking on what appeared to be a PDF of an e-mailed industry newsletter; the attachment then released malicious software onto the company computer. Homeland Security’s response team was called on to deal with what it labeled as a “sophisticated threat.”

The official in charge of monitoring America’s $51 billion effort to reconstruct Iraq has estimated that $6 billion to $8 billion of that amount was lost to waste, fraud and abuse.

Stuart Bowen, the Special Inspector General for Iraq Reconstruction (SIGIR) for the past eight years, gave that estimate in an interview with the Center for Public Integrity on Monday, shortly after releasing a new summary of his office’s many grim discoveries since it began work in in 2004.

In Friday’s report, Bowen said the exact funds lost to fraud and waste “can never be known,” largely because of poor record-keeping by the U.S. agencies involved in the effort. These include the Departments of State and Defense, along with the U.S. Agency for International Development.

According to the report, auditors repeatedly found that the State Department and Defense Department failed to properly review invoices from government contractors, often approving billions of dollars in services without checking if costs were accurate or efficient. “I think the consistent theme throughout our eight years of oversight work has been the inconsistent availability of records and information on contracts and costs,” said Bowen, a former Texas lawyer.

Bowen said his efforts were hampered from the outset by the ineffectiveness of a clearinghouse created in Iraq for government departments to submit reconstruction bills and contracts for review and oversight. Known as the Iraq Reconstruction Management System, the system was often ignored, with the result that nearly a third of all the contracts could not be monitored adequately.