Pentagon Defied Laws and Misused Funds, Panel Reports

By TIM WEINER

WASHINGTON -- Congress says in a new report that the Pentagon defied the law and the Constitution by spending hundreds of millions of dollars on military projects that lawmakers never approved, including a super-secret Air Force program. The Pentagon acknowledged some of the accusations Wednesday night, saying honest mistakes led to its failure to notify Congress about the way it was spending money.

The House Appropriations Committee, expressing anger and astonishment in a report that accompanied this year's military spending bill, which is scheduled to be debated by the House on Thursday, said the practice had eroded trust between the nation's lawmakers and military commanders.

Representative Jerry Lewis, Republican of California and chairman of the committee's defense spending panel, said the Pentagon's actions showed its belief "that it can even move money to a program Congress has closed down, maybe presuming, 'Oh, well, nobody will know.' "

"What do we have to do to make them understand what we mean when we say no?" Lewis asked.

The Pentagon spokesman, Kenneth H. Bacon, said tonight that the failure to notify Congress about the military's redirecting of appropriated funds had taken place. "We work very hard to respond to the directives Congress gives us," Bacon said. "Do we get it right 100 percent of the time? Of course not."

He acknowledged that the Air Force wrongfully started and financed a highly classified, still-secret project, known as a "black program," without informing Congress last year. The committee said that act was illegal. It also raises questions about civilian control of black programs, whose costs and nature are the most highly classified secrets in the Pentagon. Military officials refused to discuss any details of the black program.

The committee's 313-page report says the Air Force tried to buy an $800 million military communications satellite without lawful authority, and illegally diverted from an unspecified program hundreds of millions of dollars to update its C-5 transport plane. It also says the Pentagon spent millions of dollars on a "Star Wars" missile defense program that was previously canceled by Congress.

The report cited three other examples involving military trucks, missiles and tanks. It did not provide specific cost figures, but committee staff members said these practices were a chronic and worsening problem adding up to billions of dollars spent improperly and illegally over the past decade, particularly in the last year or so as military officials have tried to finance more and more expensive programs.

Addressing the specific charges other than the Air Force black program, Bacon said the military had on occasion failed to notify lawmakers about the way it spent money on these and other military projects. But he said these were honest errors, and not open defiance.

As for the military satellite, he said there were legitimate disputes over whether caches of research money should be segregated from money to the satellite. Bacon said the several hundred million dollars transferred to the C-5 program involved a misunderstanding between the Pentagon and Congress, and the "Star Wars" program was a controversy over whether the program had been completely canceled.

The law and Pentagon procedures allow military officials to shift funds from one account to another, but not without telling Congress. They cannot finance programs Congress never approved, or use money for a purpose that lawmakers never intended. But they have done so for years, the committee's report and its staff members said.

"The Constitution is pretty clear on this," Lewis said. It says: "No money shall be drawn from the Treasury but in Consequence of Appropriations made by law." That means the Pentagon cannot spend money unless Congress authorizes and appropriates it for specific programs.

Congress struggles every year over the military's budget and the costs of weapons. But the Pentagon now consumes half of the available funds in the Federal budget, and some senior Republican lawmakers, mindful that their party is cutting billions of dollars from domestic programs, are trying to be more vigilant about military spending.

The Pentagon spending battle has been joined this year in the House on two fronts: the accountability of Pentagon officials and the cost of weapons, including the $70 billion F-22 fighter jet program.

The committee has withheld $1.8 billion sought to produce the first six F-22's, saying the money would be better spent on pilots and present-day planes. The F-22 is supposed to be the flagship of the 21st century Air Force. The decision has produced howls of protest from the Pentagon.

"We can fund the F-22," President Clinton said today. "It would be a mistake to abandon the project."

The Senate's defense bill finances the first six F-22's. But Senator John W. Warner, Republican of Virginia and chairman of the Armed Services Committee, told Defense Secretary William S. Cohen this week that "we can't be giving you a blank check to buy aircraft."

The House Appropriations Committee report noted that the Air Force was trying to write its own checks for the F-22. It said the Air Force requested hundreds of millions of dollars that was supposed to help buy the first F-22's, but Air Force officials, "in violation of specific Congressional direction," earmarked the money for additional research and development.

The Air Force, in a statement, said it "had not misled Congress or misused appropriated funds." It called the committee's report a product of "misunderstanding or misinterpretation," and said it would "work with Congress to clear this up."

That may take some doing. The committee called the Air Force's "lack of accountability astonishing."

Its report said the Air Force broke the law by starting a new program to update electronics and software on the C-5 transport plane. This program, "which the Congress never formally approved," cost several hundred million dollars. The money was obtained "by diverting funds specifically provided by the Congress for another program," the report said.

The committee said the Air Force has been taking money out of research funds to help finance a new $800 million Milstar military communications satellite. One of the satellites was lost in space this spring, but because appropriated money was diverted, the Air Force cannot say how much a replacement will cost taxpayers, the report said.

"This committee is little short of amazed," the report said in a passage accusing Pentagon and missile-defense officials of illegally financing a "Star Wars" system known as the Medium Altitude Air Defense program, or Meads.

Meads has cost $100 million but produced nothing, the committee said. It was canceled last year by Congress. But it received at least $2 million diverted by Pentagon and missile-defense officials from another missile-defense program to help keep it alive, the report said.

In each of these cases, Bacon said, honest mistakes and misunderstandings had taken place, and not deliberate violations of law.