I was working for the Navy as a contractor in the 1990's when Saddam Hussein invaded. It felt nice working for them during that war because part of me felt guilty for not having joined the service, and the job was connected to improving military pay and payroll services and I thought I was contributing to the betterment of the soldiers and sailors of the military; not just the "war-fighters." Anyway I developed an interest in IT, Acquisitions, and process improvement while working there as I saw the antiquated, ad-hoc, and not always best software the military uses; and the poor procurement processes behind those acquisitions. I left that position but i continued to learn about and study acquisitions and the issues around them even on my next job -- which was on the News Release (Website) team for the Bureau of Labor Statistics (BLS). Anyway, the result was that I read articles by folks associated with efforts to improve military acquisitions, including the large book from the "Project for a New Century." Thus when 9/11 happened, initially I resisted the notion that the neo-cons involved were out to corrupt the military. Rumsfeld came into office talking about acquisitions reform. I thought he was talking about the very real improvements the military needed. He was, but he also was working these other angles. I'm not defending him, but sometimes we have to understand what we are looking at.
The origin of the allegation that the Pentagon mis-placed 2.3 trillion dollars is in a speech given by Dick Cheney the day before 9/11 at the Pentagon:
Cheney was attacking the Government Bureaucracy:
"The topic today is an adversary that poses a threat, a serious threat, to the security of the United States of America. This adversary is one of the world's last bastions of central planning. It governs by dictating five-year plans. From a single capital, it attempts to impose its demands across time zones, continents, oceans and beyond. With brutal consistency, it stifles free thought and crushes new ideas. It disrupts the defense of the United States and places the lives of men and women in uniform at risk."
And of course like any Rightie, he was attacking the Government, but not just the government, but the processes by which we accomplish acquisitions:
...."The adversary's closer to home. It's the Pentagon bureaucracy. Not the people, but the processes. Not the civilians, but the systems. Not the men and women in uniform, but the uniformity of thought and action that we too often impose on them."
I found the speech here:
He got a standing ovation for this, and truth to tell, I cheered him too. The enemy he described was bad process, bad accounting, failures in communication, duplicate programs, etc...
The technology revolution has transformed organizations across the private sector, but not ours, not fully, not yet. We are, as they say, tangled in our anchor chain. Our financial systems are decades old. According to some estimates, we cannot track $2.3 trillion in transactions. We cannot share information from floor to floor in this building because it's stored on dozens of technological systems that are inaccessible or incompatible.
Cheney wasn't saying that 2.3 trillion had been stolen, merely that he wasn't able to track that information or control it from his office.
Folks have played doctor with this quote, but duplicate and wasteful processes, projects and programs still siphon off money from necessary projects and functionality. American's have the best project managers in the world, but when it comes to running a sustained program we fall flat. This is what Cheney was talking about. And to his credit he tried to do something about it even as his friends and colleagues indulged in massive corruption. The war on Terrorism sabotaged this long over due project, because in wartime duplication, overlap, and waste are okay. Bombs aren't designed to be used over a period of months, they are designed to blow things up.
The real numbers of waste were in the millions and billions, not the trillions, and he saw it in terms of waste and duplication. I agree with him when he says:
We maintain 20 to 25 percent more base infrastructure than we need to support our forces, at an annual waste to taxpayers of some $3 billion to $4 billion. Fully half of our resources go to infrastructure and overhead, and in addition to draining resources from warfighting, these costly and outdated systems, procedures and programs stifle innovation as well. A new idea must often survive the gauntlet of some 17 levels of bureaucracy to make it from a line officer's to my desk. I have too much respect for a line officer to believe that we need 17 layers between us.
To his credit Cheney was outlying truth. And to his credit some of the money spent on these wars also went to process improvement and better acquisitions processes.
Our business processes and regulations seems to be engineered to prevent any mistake, and by so doing, they discourage any risk. But ours is a nation born of ideas and raised on improbability, and risk aversion is not America's ethic, and more important, it must not be ours.
On the one hand, Cheney was making an important point, one can't accomplish anything by staying in one's comfort zone. On the other hand what he saw as risk avoidance is counterbalanced by what happens when one disregards risks. The effort to cut waste by consolidating and centralizing only scaled that waste up in some cases. The F35 Joint Strike fighter has proved emblematic of that. His criticism of risk avoidance led to his embrasure of risks that wound up killing thousands of people. One can't eliminate risk, but Murphy's law will tell you that if you leave identified risks in a project they will turn into issues. He'd make a tautological statement on risk, but it's the "unknown risks" one tries to avoid by mitigating the known risks. His calculation on risks with regard to Iraq led him to risk the entire countries future on faulty assumptions and outright frauds.
Those who fear danger do not volunteer to storm beaches and take hills, sail the seas, and conquer the skies. Now we must free you to take some of the same thoughtful, reasoned risks in the bureaucracy that the men and women in uniform do in battle.
Not that Cheney ever stormed any beach, unless it was in a swimming suit; but his audience included men who had. And they cheered him for this speech because it only was too true.
On the other hand I read that old speech and I see a lot of ideas that reflect the triumph of arrogance and ideology over practicality. He wanted to modernize the PPBES, combine programming and budgeting, and he called it the last vestiges of the Cold war. Which might have been true, but the Military invented central planning for a reason, and the result of ignoring institutional lessons about risk planning and contingency planning led him to think that rehashed strategies like Blitzkrieg and firebombing (shock and awe) were something new and brilliant. He would go on to invade Iraq on assumptions that were disproved in Vietnam. He identified real problems, but then he let his arrogance, prejudices and delusions goad him into "solutions" that made things worse.
And of course the irony is that we did waste about 2.2 trillion on the Iraq war, counting casualties and ongoing costs from the waste of lives and wealth.