$21 Trillion Unaccounted For in DoD and HUD Alone

A few researchers out of Michigan State found $21 trillion unaccounted for between the DoD and HUD. Why is the media so silent?

January 28, 2019

By: Bobby Casey, Managing Director GWP

A lot is going on and not going on at the same time right now.  President Trump just announced a three-week stopgap in the government shut-down.  During which time congress is meant to engage in “good faith” negotiations regarding installations of “smart walls”.  So basically, no continuous wall from end to end.  Just strategic walls where reinforcement is needed.

Also, Trump’s Commerce Secretary, Wilbur Ross, is saying they are nowhere near a settlement on the trade war with China, despite the impending deadline of March 1st.

Things have finally come to a very disastrous head in Venezuela, with Nicolas Maduro being unceremoniously ousted from his presidency. The POTUS recently recognized the unelected opposition leader, Juan Guaido, as the President of Venezuela.  Guaido is meant to be an interim leader until proper elections can be had; a provision in the Venezuelan constitution which allows for the head of the legislature to do exactly this.

So, stuff is happening.  Lots of stuff.

We also have the Winter Outrage Olympics taking place in the United States over everything from a child’s smirk, to a red MAGA hat, to an ad about razor blades.

All these things made real headlines in one form or another, for DAYS.  But sometimes, things fly well under the radar… so much so that a year-old article about a discovery at Michigan State University barely made the college campus newspaper!

Headline Reads: “MSU Scholars Find $21 Trillion in Unauthorized Government Spending

That’s trillion with a T.  That is just below the entire US national debt.  That’s nearly $2.4 trillion MORE than the 2018 US GDP.

The findings were with the Defense Department and the Department of Housing and Urban Development between 1998 and 2015.  Let me rephrase: this is JUST for the DoD and HUD.  That’s where the researchers stopped.  Who is to say what would’ve been found had they pursued other departments as well?

On September 10th, 2001, then Secretary of Defense, Donald Rumsfeld admitted there is $2.3 trillion in unaccounted for expenditures in the DoD. A lot of buzz around that fact with the 9/11 Truther crowd, but only as a suspected motive. No one ever bothered to circle back to that admission and investigate it after the 9/11 commission made its final statement.  It’s been over 17 years.

We’ve covered a lot of that here on GWP (here and here for example); and it’s not like you couldn’t just type a search of “Billions Missing Pentagon” and get a hearty return of assorted articles.  But always in pieces.  Never a lump sum.

$2 billion here… $6 billion there… varying time periods…

But, Dr. Mark Skidmore, an economics professor at MSU who specializes in public finance, took an interest in a very astonishing claim made by former Secretary of HUD, Catherine Austin Fitts referencing a “report which indicated the Army had $6.5 trillion in unsupported adjustments, or spending, in fiscal 2015″.  $6.5 TRILLION, in one fiscal year sounds inconceivable, if not just indicative of a typographic error.

He investigated for himself, and to his surprise it was accurate.  He opened up the time frame to 1998, and combed the documents found online with a few grad students of his, and in sum between the HUD and DoD found $21 trillion in journal voucher adjustments.  Per the Government Accountability Office comptroller:

Journal vouchers are summary-level accounting adjustments made when balances between systems cannot be reconciled. Often these journal vouchers are unsupported, meaning they lack supporting documentation to justify the adjustment or are not tied to specific accounting transactions…. For an auditor, journal vouchers are a red flag for transactions not being captured, reported, or summarized correctly.”

The biggest culprit was the Army, which accounts for $11 trillion of that.  So over half of the unaccounted-for funds flow through one division of the DoD.  Dr. Skidmore notes one particular sum where there was $800 billion transferred from the Treasury to the Army in one year.  Their approved budget was around $130 billion.  It was called a reconciliation for previous years but how?  There’s no supporting documentation.

Article I, Section 9, Clause 7 of the US Constitution is very clear:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”

A typical business might see 1% of their expenditures fall into an unaccountable category.  It happens.  But this finding falls well outside that scope. 

Dr. Skidmore started asking questions to the Office of Inspector General and the Government Accountability office, receiving a lot of run around and platitudes; also, around that same time, all the links he was referencing were disabled.  Not a glitch.  Just cut off.

This is scary, but also indicates that people in high places know.  Someone authorized the disabling of the links. 

The good doctor had the foresight to download all the documents, and has preserved all his findings from those missing pages on Solari.com (I entreat you to look into this!).

As you know, the Pentagon totally failed their first-ever audit last year, not only did the people expect it, so too did the DoD.  But here’s what I didn’t realize:

“On October 4, 2018 federal government officials accepted the recommendation of the Federal Accounting Standards Advisory Board (FASAB) that the government be allowed to misstate and move funds in order to hide expenditures if it is deemed necessary for national security purposes. The new guidelines are to apply to all agencies, not just the black budget.”

Despite the relaxing of the guidelines, the DoD STILL FAILED their audit.  And STILL no mention or summation of the journal voucher adjustments.

“With the change in accounting guidelines, which is a full departure from Generally Accepted Accounting Principles (GAAP), only a few people with high level security clearances have the authority to determine what is deemed a national security issue and these same people will now be allowed to restate financial reports in order to conceal actual expenditures without any disclosure. No one, but those few people would know that such modifications were made, thus making evaluation of government financial statements impossible. From this point forward, the federal government will keep two sets of books, one modified book for the public and one true book that is hidden.”

$21 trillion unaccounted for.  That means that the bulk of the US debt, along with a good amount of the deficit and budget, is unaccounted for.  This SHOULD be a matter of greater concern than it is.  It’s a blatant violation of the Constitution for starters, and a total abandonment of accountability, for a sum of money that is not by any standard insignificant.

I realize that money gets “lost”… but this is astounding.  This comes to roughly one third of government spending from 1998 to 2015.  No one loses one third of their money, as in “they have no idea where it went.  Even a degenerate gambler knows where their money went.

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4 thoughts on “$21 Trillion Unaccounted For in DoD and HUD Alone”

  1. Wow! The American people need to get together and demand their voices be heard. Seems to be happening everywhere. How much money is enough?

    1. At the VERY least, before another tax is instituted, Congress should answer for this money. That is their JOB! You cannot demand another dime in new taxes until you explain this number!

  2. I don’t know about HUD but IMHO a large portion of the DOD money went to “black projects”. These are the kinds of projects that the old saying “I could tell you, but then I’d have to kill you” is literally true.

    1. From what Dr. Skidmore is saying, it seems he factored that in, but this particular sum is well outside that. Black budgets are at least authorized… so there’d be some indication of authorization. But these are just line items that have NO attribution whatsoever… that’s deeply concerning. And the permission to move the money around? That’s just nuts… I don’t know. The idea of nearly the entire US debt being a black budget is unsettling to say the very least!!!

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