16 $21 Trillion in Unaccounted-for Government Spending from 1998 to 2015

by Project Censored
Published: Updated:

Two federal government agencies, the Department of Defense and the Department of Housing and Urban Development (HUD), may have accumulated as much as $21 trillion in undocumented expenses between 1998 and 2015. Independent news sources, including RT and USAWatchdog, reported this finding based on an investigation conducted by Mark Skidmore, a professor of economics at Michigan State University. Skidmore began to research the alleged irregularities in DoD and HUD spending after hearing Catherine Austin Fitts, who was assistant secretary of HUD during the George H.W. Bush administration, say that the Department of Defense’s Office of Inspector General (OIG) had found $6.5 trillion worth of military spending that the Department of Defense could not account for. [For Project Censored’s previous coverage of the missing $6.5 trillion in US Army spending, see Elsa Denis with Mickey Huff, “Over Six Trillion Dollars in Unaccountable Army Spending,” in Censored 2018: Press Freedoms in a “Post-Truth” World.]

The figure given by Fitts was 54 times the US Army’s $122 billion budget as authorized by Congress, leading Skidmore to think that Fitts had meant $6.5 billion in undocumented spending, not $6.5 trillion. Typically, adjustments in public budgets are only a small fraction of authorized spending. In an article for Forbes, co-authored with Laurence Kotlikoff, Skidmore said the “gargantuan nature” of the undocumented federal spending “should be a great concern to all tax payers.”

Working with Fitts and two graduate students, Skidmore investigated reports from the 

websites of the Departments of Defense and Housing and Urban Development as well as the Office of Inspector General. In one of these reports, Skidmore found an appendix that showed a transfer of approximately $800 billion from the US Treasury to the Army. As MSU Today reported, not only did Skidmore’s queries to the OIG go unanswered, but the OIG also at one point disabled links to “all key documents showing the unsupported spending.” Skidmore and his colleagues were able to continue their research because they had already downloaded and stored the relevant documents. [See Solari’s archive of the documents, “DOD and HUD Missing Money: Supporting Documentation.” Solari is a private company founded by Catherine Austin Fitts, who also serves as the company’s president.]

Shortly after Skidmore’s findings went public, the Pentagon announced the first ever audit of the Department of Defense. Although the Pentagon is responsible for $2.4 trillion in assets, including personnel, real estate, and weapons, it has never been audited. The announced audits are set to begin in 2018 and projected to take place annually thereafter. [For previous coverage of the Pentagon’s budget by Project Censored, see Jeannette Acevedo with Peter Phillips, “Pentagon Awash in Money Despite Serious Audit Problems,” in Censored 2015: Inspiring We the People.]

RT’s report quoted the DoD’s comptroller, David L. Norquist, who explained that the OIG had hired independent public accounting firms to audit the Pentagon’s finances because it is “important that the Congress and the American people have confidence in DoD’s management of every taxpayer dollar.” MSU Today reported that the DoD did not explain what led to the audit, but that Skidmore believed his team’s efforts to compile the government documents and make them public “may have made a difference.”

Apart from the article in Forbes that Skidmore co-authored and an NPR story on the OIG’s decision to undertake an audit of the Pentagon, US corporate media have failed to recount any of the details concerning the significant findings of Mark Skidmore’s research.

Greg Hunter, “Missing $21 Trillion Means Federal Government is Lawless—Dr. Mark Skidmore,” USAWatchdog, December 3, 2017, https://usawatchdog.com/missing-21-trillion-means-federal-government-is-lawless-dr-mark-skidmore/.

Andy Henion, “MSU Scholars Find $21 Trillion in Unauthorized Government Spending; Defense Department to Conduct First-Ever Audit,” MSU Today, December 11, 2017, https://msutoday.msu.edu/news/2017/msu-scholars-find-21-trillion-in-unauthorized-government-spending-defense-department-to-conduct/.

“$21 Trillion of Unauthorized Spending by US Govt Discovered by Economics Professor,” RT, December 16, 2017, updated January 17, 2018, https://www.rt.com/usa/413411-trillions-dollars-missing-research/.

Student Researcher: Andrea Fekete (North Central College)

Faculty Evaluator: Steve Macek (North Central College)