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View Full Version : Pentagon pays $1 million to ship washers



publius
2007-Aug-18, 04:34 AM
Here's a case of fradulent billing that just makes you blind mad:

http://www.palmettoscoop.com/2007/08/16/lexington-company-swindled-pentagon-for-205-million-in-fraudulent-charges/

This bunch charged nearly a $million to ship washers.

You know, China recently executed the head of their drug regulatory agency for taking bribes from drug companies and other shenagins. This kind of crap just about rises to the execution level. It would send a strong message.

Now, the above idiots just went wild. The question I have is how much of this goes on, but with reasonable looking charges......

-Richard

Maksutov
2007-Aug-18, 05:04 AM
The Pentagon...the Pentagon.

:think:

Isn't that the same bunch that recently lost 190,000 weapons (110, 000 AK-47s and 80,000 handguns, IIRC) somewhere in the Middle East?

Trust them, they know what they're doing. (http://www.washingtonpost.com/wp-dyn/content/article/2007/08/05/AR2007080501299.html)

publius
2007-Aug-18, 05:46 AM
You know, sometimes there is method to their madness. While the above is certainly not one of them, overbudgeting and overcharging are actually one of the ways they hide big expenditures for secret projects.

We're so accustomed to the government wasting huge amounts of money, it's become a good way to hide money.

Denver Airport is probably, probably mind you, a shining example of that. There is a lot of kookery about that (which is another well-used trick -- encourage lunacy and kookery, UFOs, New World Order, etc, to ward off any serious looking into), but a serious theory is that is some huge Doomsday facility, perhaps an improved replacement for Mount Weather.

The cost overruns were just insane, and they did other things that made absolutely no sense, unless of course, they were indeed building some very secret facility underground.

Speaking of Mt. Weather, many of the contigency plans were supposedly activated on 9/11. There was a rumor that there was a frantic 911 call from someone who said a big plane crashed into a mountain. It was Air Force One flying into Mt. Weather, supposedly. They've got some huge doors there and a runaway inside, apparently. :)

I wouldn't be surprised if Air Force One might be able to fly right into the ground around Denver Airport, now.

And the ridiculous amounts of money required to build all that stuff are neverly publically approved. It's all done with wink and nod tactics. And because of the secrecy, you can be assured there's a lot of skimming off the top there as well.

-Richard

publius
2007-Aug-18, 06:01 AM
Here's that Air Force One flew into the mountain story:

http://www.guardian.co.uk/g2/story/0,,1859632,00.html

And note that's a UK paper. :)

-Richard

Van Rijn
2007-Aug-18, 06:07 AM
Not that I'm big on wasting money, but isn't this another politics thread, and not space related? One of the reasons I like BAUT is the limitation on political discussion, but it sure seems to be filtering in a lot lately.

sarongsong
2007-Aug-18, 06:41 AM
Political? Looks like the apprehension of an on-going criminal activity, to me.
...C&D's fraudulent billing started in 2000...The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping...the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and ''high-end automobiles'' that the [two C&D owner] sisters spent the money on...Another site attributes the death of one sister last year to suicide and the remaining one is facing up to 40 years.

Neverfly
2007-Aug-18, 06:47 AM
Any such media reporting events like this are worthy of being seen, I think...

Attention to fraud and manipulation discourages it.

Its interesting how for 6 years they managed to get away with it. I can't help but wonder if it was sudden or incremental.

I mean, weren't they scared at first?
forty years is a long time- in which you can't spend all that money you swiped...

publius
2007-Aug-18, 07:02 AM
From what I gather, it was incremental. They started out relatively small, got away with it, and got more and more greedy. The Pentagon's purchasing is just so huge it boggles the mind. There was some automated payment system for "high priority" purchases they took advantage of.

What is surprising is it took so long for some real person to notice that the system was paying a million dollars for small shipments, and say, "Hmmm, something is fishy here." But that's the way it is with some mind-boddlingly huge government agency.

I have relatives who served in the military through the years, and they can all tell stories of unbelievable stupid waste, and gravy-train sweet deals that contractors (sometimes relatives of politicians) would get. Anyone who's been in it will tell similiar stories.

There was one in particular during Vietnam of tanker loads of fuel just being burned because they had no place to store it, and they had to unload it. So they just dug trenches, dumped it, and set it alight.

-Richard

Van Rijn
2007-Aug-18, 07:10 AM
Political? Looks like the apprehension of an on-going criminal activity, to me


Funny, it looks like there is a lot of political commentary in this thread to me.

Neverfly
2007-Aug-18, 07:25 AM
Yeah, I have 8 years Army behind me- and I can tell stories too. Including those told to me by contractors.

captain swoop
2007-Aug-18, 09:41 AM
Atthe end of the war in the UK aircraft and vehicles went from the production line direct to the scrap yards, the Govt didn't want to just end the contracts and force companies to close factories.

publius
2007-Aug-18, 06:21 PM
Atthe end of the war in the UK aircraft and vehicles went from the production line direct to the scrap yards, the Govt didn't want to just end the contracts and force companies to close factories.

That reminds me of a WWII story one of my uncles or one of the family friends told. At the end of the war, they had huge shipping pipelines of equipment and material going over to Europe. He was on one of those ships and the order came to just dump all that brand new equipment into the ocean! He described in horror having to dump brand new jeeps, car lots full of them, overboard. It killed him.

The reason they got for that was similiar to the above. If brought back, all that stuff dumped on the market would've "ruined the economy". That's just flat ** as far as I'm concerned, an excuse. There is nobody in his right mind who would waste his own stuff on that scale. Only a government can do that.

-Richard

Moose
2007-Aug-18, 06:59 PM
Funny, it looks like there is a lot of political commentary in this thread to me.

For what it's worth, this sentiment is seconded.

Neverfly
2007-Aug-19, 01:03 AM
(snip)
The reason they got for that was similiar to the above. If brought back, all that stuff dumped on the market would've "ruined the economy". That's just flat ** as far as I'm concerned, an excuse. There is nobody in his right mind who would waste his own stuff on that scale. Only a government can do that.

-Richard

It makes you wonder if it's a sign of the times. Would such happen today?

Or would we find a good use for excess material like that?
I'm sure a starving boy in China would have been happy to have that Jeep. (So would I :p )

The Backroad Astronomer
2007-Aug-19, 01:11 AM
just saw a documentary about the jeep last night, the company who made them wanted th GIs and their families to buy new ones. Willies the maker of the jeep lost a lot of money after the WWI from people buying surplus trucks from the army.

Neverfly
2007-Aug-19, 05:31 AM
just saw a documentary about the jeep last night, the company who made them wanted th GIs and their families to buy new ones. Willies the maker of the jeep lost a lot of money after the WWI from people buying surplus trucks from the army.

That completely makes sense

But throwing excess into the ocean makes absolutly no sense whatsoever.

Just because an item exists- Doesn't mean that it is For Sale!
The excess vehicles could have been put to use- even mundane use would be preferable to deep sixing them. The US could have given them to allied nations even as a gift- say- Thanks for your support- sorry about the debt eh?

Davidplf- Im not insinuating that you agree with dumping them in the ocean btw...

publius
2007-Aug-19, 05:52 AM
Just because an item exists- Doesn't mean that it is For Sale!
The excess vehicles could have been put to use- even mundane use would be preferable to deep sixing them. The US could have given them to allied nations even as a gift- say- Thanks for your support- sorry about the debt eh?


Consider the definition of "loose money" here. Manufacturer A makes a bunch of goods they sell to the government. They were paid for it. They argument of loss is that if the government then turned that back loose at home, they wouldn't be able to sell more new ones. So the notion of loss is not getting what they *think* they could make.

It's the same logic that a "budget cut" is when you only increase something by 5% instead of the 10% you were planning on. Or going the other way, arguing you're saving money by not spending as much as you could have. You go into debt buying stuff, but yet you "save" because you didn't go into as much debt as you could have. :lol:

That just doesn't fly with me. That's related to what I call the rat-race, loop of crap notions of economics, which seems to reduce to the following.

Poor Joe Sixpack works his tail off. He must spend every penny of that to buy crap he doesn't need to keep all the other Joes working. If Joe stops buying and starts saving, the economy collapses. That is the reasoning that leads to dumping ship loads of jeeps into the ocean. And I just don't buy it.

It just seems to boil to "busy work", such as paying someone to dig a hole, then fill it up, then dig it again, the idea that the whole economy is some fruitless circle of everyone running around working to to make stuff that is really worthless.

-Richard

The Backroad Astronomer
2007-Aug-19, 05:58 AM
well throwing in ocean does not make sense I was pointing why it happened, and in the show they said dumping them in the ocean most were just turned into scrap metal.

publius
2007-Aug-19, 06:10 AM
well throwing in ocean does not make sense I was pointing why it happened, and in the show they said dumping them in the ocean most were just turned into scrap metal.

Yes, I'm sure the majority of stuff was scrapped or otherwise destroyed in a way so the raw materials could be reused. But they did indeed dump ship loads of material that were in transit into the ocean. In those cases, they were probably "saving money" in a preverse way, as it would've cost more to bring it back to destroy it, rather than just dumping it.

ETA: Interesting: Google on dumping jeeps in the ocean WWII. They dumped some close to shore, and some people actually went out and salvaged them, and re-sold them anyway. :)

-Richard

Michael Noonan
2007-Aug-19, 06:19 AM
Originally Posted by Van Rijn
Funny, it looks like there is a lot of political commentary in this thread to me.

For what it's worth, this sentiment is seconded.

Lets just add math and make all these scientific stories. Take two coins, mark one side science and the other politics.

Any combination can then be evaluated:-
Science - Science no problem.
Science - Politics the science of politics, they need all the informed help they can get.
Politics - Science normally a funding problem and a chance to discuss what is really needed.
Politics - Politics NO not here, no place for it.

Now lets get serious, :think: what else don't we know about?

Ship washers ... Yes I would have them washing ships for the next forty years. Interesting thread publius.

Neverfly
2007-Aug-19, 06:27 AM
I agree - Im glad to have threads like these pop up in OTB as watching the news usually kills more brain cells than enhancing them. If I heard one more thing about Paris Hilton...

captain swoop
2007-Aug-19, 11:47 AM
Just after the war my dad was an apprentice and Skinningrove Steel works (On Teesside) They got a scrap train full of wooden packing cases, each one containing an unused Packard V8 truck engine, they all went into the furnace (well, a whole bunch were baught on 'Scrap Chits' and ended up powering a vsariety of local vehicles)

Maksutov
2007-Aug-19, 11:59 AM
The company from which I bought my first telescope (a 3" reflector), and materials for making my later 4.25" and 8" reflectors, got its start in a similar fashion.

They started out by selling war surplus lenses, many of which were slightly chipped and deemed unsuitable for use. Most of these lenses which had been vital to the war effort would have been scrapped. But this company apparently bid on them and got them at really low prices.

That was Edmund Scientific (http://scientificsonline.com/article.asp?ai=52&bhcd2=1187524567).

Neverfly
2007-Aug-19, 12:14 PM
I used to get the Edmund scientific catalogue throughout the nineties... I enjoyed the catalogue and ALSO bought my first lenses (albeit at a much later date and probably not as skillfully as Maksutov) and built my first scope thanks to them. However, they were not cheap!

Reading the link Maksutov posted leads to a "brief history" of the company.
Its an interesting summarization, as it is utterly full of typographical errors and misplaced words.

And toward the very end we seem to get an interesting editorial.


Instead of single lens elements, these are achromats. Rather than being shipped in coin envelopes, they are shipped in a velvet-lined box. They are not chipped. And, at twelve hundred dollars, these lenses are not going into science fair projects.

It appears this description is from Wikipedia.

Maybe the author was as grumpy as I was that we came in late in the game...

I think ES would (or the company that bought them) do well to write their own history than to borrow wiki's...

Maksutov
2007-Aug-19, 12:48 PM
Maybe some of those 190,000 weapons were bought with this money (http://www.guardian.co.uk/Iraq/Story/0,,2008189,00.html)?

Although the funds might have also come from profits made on these resources (http://www.nytimes.com/2007/05/12/world/middleeast/12oil.html?ex=1336622400&en=034ced4a02a3dcd3&ei=5088&partner).

Is there anything wrong here?

As Theodoric of York (http://snltranscripts.jt.org/77/77rtheodoric.phtml) used to say
Naaaah!BTW, to those who would find this political, a major blunder by any organization, no matter what their affiliation, is a major blunder. It's not talking politics to point it out.

Meanwhile, wouldn't it be much better to spend and account for $12,000,000,000 on something like this (http://neo.jpl.nasa.gov/)?

Larry Jacks
2007-Aug-19, 05:39 PM
The reason they got for that was similiar to the above. If brought back, all that stuff dumped on the market would've "ruined the economy". That's just flat ** as far as I'm concerned, an excuse. There is nobody in his right mind who would waste his own stuff on that scale. Only a government can do that.

America was late to the game when it came to producing aircraft for WWI. When the war ended, it had huge numbers of surplus planes, engines, and related parts that went on the surplus market. You could buy a brand new Jenny (2 seat trainer plane that was very popular with the barnstormers of the 1920s) for $500 or less. It took years to use up that surplus. As a result, it was very difficult for many years for anyone to build and sell new airplanes. The supply of surplus planes made it difficult to be in the airplane business. It probably delayed aviation development by as much as 10 years.

After WWII, there were even more massive amounts of surplus munitions and equipment. In some cases of munitions that I know about, the stuff was dumped or burned because it would've been too expensive (and dangerous) to ship it back to the US. In the case of planes, thousands were scrapped. Some, like the C-47/DC-3 were released to the market where several hundred of them are still flying today. Those planes were the mainstay of many of the world's airlines for years after the war. It wasn't until much more capable planes (e.g. the Constellation or Stratoliner) came out that many airlines had an incentive to upgrade.

The DoD is hugely inefficient but it by no means has a lock on government blunders. Not too long ago, it was reported that the Department of Agriculture had been paying farm subsidizies to thousands of dead farmers for years at an estimated cost of well over a billion dollars. Construction projects like Boston's notorious "Big Dig" are several hundred persent (and many billion dollars) in overruns. When there's no consequences for wasting tax dollars, the incentive to spend money wisely is largely absent. When political graft and corruption is factored in, being a good steward of tax dollars can actually hurt your career.

Cylinder
2007-Aug-19, 06:07 PM
Meanwhile, wouldn't it be much better to spend and account for $12,000,000,000 on something like this (http://neo.jpl.nasa.gov/)?

The $12 billion did not belong to the United States. It wasn't ours to spend.

Maksutov
2007-Aug-20, 01:50 AM
The $12 billion did not belong to the United States. It wasn't ours to spend.I know that, as it was pointed out in the article I referenced. Plus where did I write that the United States would be spending it?

Instead what I was getting at was it would have been a good thing if it had been spent on something positive, productive, and meaningful instead being mismanaged, lost, and most likely being used for something negative, destructive, and meaningless.

mugaliens
2007-Aug-20, 06:23 PM
Ok, bad on the gov for being so stupid, and send the execs of that company to prison for 20 years - also for being so stupid.

Doodler
2007-Aug-20, 06:57 PM
well throwing in ocean does not make sense I was pointing why it happened, and in the show they said dumping them in the ocean most were just turned into scrap metal.

Disposing of evidence, plus converting completed merchandise into scrap metal costs labor and materials to chop them (they don't just unscrew and unbolt themselves, ya know?) Plus there's no point in putting them on the market because the prices would have crashed. With a glut in supply, the profit drops below the cost, and any sane corporation starts trimming the employment rolls to get costs down below what the market will bear. End result, massive unemployment at a time when employment is more critical than ever because of the sacrifices that have been made to keep the war machine running.

Peacetime production isn't anywhere NEAR 100% efficiency in order to keep demand up. You do NOT want more product on the shelf than you know you can move, and sometimes, throttling back gives you more bang for less buck. That is, unless you've got a drekhot product everyone wants, which ain't often. Heck, there are laws against dumping on markets simply because its a tactic used to the detriment of the health of the economy at a systemic level, even though theoretically, companies compete on individual levels. Call those regulations "rules of warfare" in economic terms.

Speaking as to why governments do that kind of thing. The simple answer is to protect people. Since we're talking post-war history here, I'll address the politics of that particular time period. Why would a factory build planes just to break them down? Simple, keeping people employed in a nation that had been pretty shattered by bombardment. Yeah, there was money to be made in the reconstruction, but for that ramp up period until the government could mobilize effectively, something had to keep the machine oiled. Yes, rich men profited up top in the boardroom, but a lot of families that would have been on the street and hungry collected paychecks which housed and fed them. As theoretically illogical as it sounds looking back 60 years on, at the time, it accomplished the task and maintained the economy to aide its transition from wartime production to postwar reconstruction. If they'd cut off the contracts, you'd have had a massive jump in unemployment, a lot of public uncertainty about where their next meal was coming from, and where they'd live. You'd also have a lot of the corporations that were necessary to restore postwar life folding right and left. These companies had already ordered the parts that their employees were assembling, so they'd have to pay to dispose of them themselves, and they'd be in the hole because the money supposedly coming in from the government's buy order would have left a gap and they're gone.

So while its superficially wasteful, that excess momentum from wartime production going into peacetime is sometimes a price worth paying to avert unnecessary shockwaves in the economy from a rapid transition to peacetime life.

Doodler
2007-Aug-20, 07:11 PM
Ok, bad on the gov for being so stupid, and send the execs of that company to prison for 20 years - also for being so stupid.

I don't see the DoD as at fault here. The expedited process was designed to get little things to critical theaters quickly without bureaucratic hassles. Some might decry this as a reason to distrust the government's handling of tax dollars, all this tells me is that I can't trust Americans not to screw us all over when our backs are turned.

If it were me making the call, this woman would be dragged naked down Pennsylvania Avenue, then hung by her ankles and burned alive as a traitor.

NEOWatcher
2007-Aug-20, 07:18 PM
I don't see the DoD as at fault here.
I agree with you. Although, the sentence seems rather harsh to me...

Anyway, the simple fact that this was caught means the DoD has some control over the situation.

How much money should be spent to catch this up front? Would $20M of extra oversight have prevented this? I doubt it.