As with recent corporate scandals, there is a real price to pay for such lack of oversight. Part of the cost is monetary and takes the form of the millions of wasted dollars; part of the cost takes the form of compromised military readiness. This June, GAO auditors unveiled a case that neatly demonstrates how the two costs are interrelated. The study came at the request of members of Congress who wanted to follow one item through the Pentagon's Byzantine accounting system. What they learned was striking -- a story even longtime observers of Pentagon bureaucracy were not quite ready for.

U.S. political leaders fear, perhaps rightly, that the Iraqi leader Saddam Hussein may be reconstituting his chemical and biological arsenal or, worse, that he may be developing nuclear weapons. If American military forces were to invade Iraq tomorrow, each soldier would expect, and probably be issued, protective clothing to guard against a possible chemical or biological attack. With few exceptions, that clothing would be a full-body overgarment known as Joint Services Lightweight Integrated Suit Technology, or JSLIST.

These suits were developed by Army engineers in Massachusetts in 1997 in an effort to upgrade the older, more cumbersome protective garments used during the Gulf War. From a distance, a soldier dressed head-to-toe in a JSLIST suit might not appear to be wearing anything unusual. JSLIST jackets and pants are layered with weaves of advanced polymers designed to keep the wearer cool while guarding against chemical agents; but the suit's surface is patterned with standard military camouflage and looks fairly conventional. JSLIST boots and gloves, constructed from matted black rubber, are designed to prevent, say, a mist of nerve gas from seeping up a cuff. The suits are also equipped with gas masks and hoods that form a tight seal around the soldier's head.

"Imagine you're in the Gulf, where it's 84 degrees and there's a chemical threat," says John Eldridge, editor of Jane's Nuclear, Biological and Chemical Defence. "These suits are absolutely critical, if we're to believe what's coming out of Iraq's weapons of mass destruction program." Since Sept. 11, with the subsequent spate of anthrax attacks in the United States and talk of terrorists using unconventional weaponry in cities or on the battlefield, numerous divisions of the military have been clamoring to get the suits, according to JSLIST program manager Douglas Bryce. From 1997 to the present, the Pentagon has purchased 1.6 million JSLIST outfits, and had distributed 1.2 million to the various services. The Defense Department plans to have 4.4 million by 2011, at a total cost of about $1 billion.

And yet, when GAO auditors attempted to track the Pentagon's current JSLIST stockpile, they made a puzzling discovery. Despite the suits' high utility and demand, and despite the millions of dollars being invested in them, two bases in Hawaii -- one Air Force, one Navy -- had sent their JSLIST pants and jackets to a government liquidation contractor. The suits, which cost the government about $200 each, were being auctioned off on the contractor's Web site for $3 an outfit. (In fact, the $3 was higher than the initial asking price, which became artificially inflated by government investigators who bid for the items during their research.) By the time GAO auditors had brought the resales to the military's attention, over 400 units had been auctioned off the block.

"The Defense Department's left hand knows nothing about what the right hand does," said Rep. Dennis Kucinich, D-Ohio, the ranking member of the Government Reform Subcommittee that had asked the GAO for its study. During a congressional hearing, he expressed astonishment with this particular instance of institutional blindness: "What I did not expect as a result of our request was to be surprised again by the severity and the starkness of the Pentagon's inability to be able to understand exactly how their own systems work and to be able to account for the very materiel which the taxpayers of the United States pay for."

How could this happen? Although the Defense Department runs the most technologically advanced military in the world, its process for procuring, controlling and paying for an item as simple as the JSLIST suits is barely computerized and exceedingly complicated. From purchasing to deploying JSLIST, 11 Defense Department "components" must perform 128 processing steps. "Of the 128," according to the GAO, "100 -- 78 percent -- involved manual entry or reentry of data into one or more of the 13 nonintegrated data systems supporting the JSLIST processes." In plain English, that means faxes, typed memos, phone calls and other ways of conveying information that can't be easily entered into a database.

Not surprisingly, gathering the suits for battle from their various storehouses would present an immense challenge. No one in the Pentagon hierarchy knows the exact location of the 1.2 million suits the military currently owns, because few if any of the myriad Defense Department divisions have accounting systems capable of exchanging such information. The troubling implications of this were recently demonstrated when the Pentagon proved unable to locate and recall 250,000 defective units of the JSLIST predecessor; the department "was not certain if the suits had been used, were in supply, or were sent to disposal." Today, to find all the JSLIST suits, a costly and time-consuming worldwide call would have to be put out to all corners of the military. In some cases, servicemen would have to sift through warehouses and manually dig them up. Certain bases keep absolutely no records of the suits, while others use paper or dry eraser boards to maintain their only tally, according to the GAO.

The Defense Department's inability "to quickly identify and locate JSLIST has contributed to some military units declaring them excess to their immediate needs, while at the same time [the Pentagon] had been attempting to expedite the issuance of JSLIST to military units in response to the events of Sept. 11, 2001," the GAO said in its report. On both the Air Force and Navy bases, there were a variety of reasons that people chose to do away with the suits. Two stand out. In the first case, Air Force officials wanting to discard the protective garments were told by the base supply officer that "no one else needed" them; in the second, the Navy servicemen said they "had more than the 32 required to meet their immediate needs."

Some Pentagon officials argue these resales represent an insignificant aberration from standard procedure and do not reflect business as usual. Bryce, the JSLIST program manager, said in an e-mail: "We regret that 0.065 percent of the JSLIST articles produced to date (1,934 coats or trousers identified by the GAO compared to 2,952,456 coats or trousers produced) were disposed of by various components of the Department of Defense from January of 2001 through June of 2002. However, since June of this year we have put a process in place that will ensure that disposal of these garments outside of the Department of Defense will not happen again."

But others within the Pentagon say the misplaced suits are emblematic of the system's deeper flaws. "It's part of the larger problem, for sure," says Chuck Spinney, a longtime civilian analyst in the office of the Secretary of Defense. "We have accounting problems from big things to little things. What we have is essentially a house of cards, and no one knows how strong it is."

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