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Rum$feld's $9 Billion Slush Fund

For all the debate over President Bush's $87 billion supplemental request for military operations and economic reconstruction in Afghanistan and Iraq, no one seems to have noticed that the sum includes a slush fund of at least $9.3 billion, which Secretary of Defense Donald Rumsfeld can spend pretty much as he pleases.
Rumsfeld's $9 Billion Slush Fund

By Fred Kaplan
Posted Friday, October 10, 2003, at 2:42 PM PT

For all the debate over President Bush's $87 billion supplemental request for military operations and economic reconstruction in Afghanistan and Iraq, no one seems to have noticed that the sum includes a slush fund of at least $9.3 billion, which Secretary of Defense Donald Rumsfeld can spend pretty much as he pleases.

Last week, the congressional armed services committees—and this week the House Appropriations Committee—marked up the supplemental, excising a few hundred million that Bush had requested for new hospitals, housing, and sanitation. But the committees didn't touch a nickel of the slush fund—and there's a cravenly wink-and-nudge reason why they didn't.

Most of the supplemental request is fairly straightforward: $32 billion to maintain the tempo of military operations, $18 billion for military personnel, $5.1 billion for security and a new Iraqi army, $5.7 billion for electrical power, and so forth.

But deep within, the document  http://www.globalsecurity.org/military/library/budget/fy2004/omb/supplemental_9_17_03.pdf proposes the following allowance:

Not less than $1.4 billion, to remain available until expended, may be used, notwithstanding any other provision of law, for payments to reimburse Pakistan, Jordan, and other key cooperating nations, for logistics, military and other support provided, or to be provided, to United States military operations.

First, look closely at those first three words: Not less than. In other words, Rumsfeld could transfer more than $1.4 billion for this purpose—how much more, who can say? The section goes on to say that Rumsfeld must notify the appropriate congressional committees whenever he uses any of this money, and that the payments must be made with the concurrence of the secretary of state. But otherwise, the bill emphasizes that he alone determines how to spend this money "and such determination is final and conclusive."

Another section, subtitled the "Iraq Freedom Fund," states that the secretary of defense can transfer $1,988,600,000 from one part of the overall $87 billion supplemental to any other part, again, as long as he notifies the committees when he does this. (As with the previous allowance, the committees appear to have no power to disapprove these transfers.)

Still another section reads:

Upon his determination that such action is necessary in the national interest, the Secretary of Defense may transfer between appropriations up to $5 billion of the funds made available in this title.

Again, he "shall notify the Congress promptly of each transfer."

Another section gives Rumsfeld authority to "transfer not more than $500 million of the funds appropriated in this title to the contingency construction account ... to carry out military construction projects not otherwise authorized by law." So much for pulling in the reins on Halliburton and Bechtel.

Then there is this section:

Notwithstanding any other provision of law, from funds available to the Department of Defense for Operations and Maintenance in fiscal year 2004, not to exceed $200 million may be used by the Secretary of Defense, with the concurrence of the Secretary of State, to provide assistance to military forces in Iraq, Afghanistan, and other friendly nearby regional nations to enhance their capability to combat terrorism and to support U.S. military operations in Iraq and Afghanistan.

Egregious syntax makes this one a little hard to follow, but maybe that's because the leeway it allows is quite a bit broader than in the other sections. It gives Rumsfeld the power not merely to transfer funds within the $87 billion, but to transfer up to $200 million from the Pentagon's entire operations and maintenance budget—in other words, from programs that have nothing to do with Iraq, Afghanistan, or terrorism.

Finally, the president has a little slush fund, too. One section notes that he may transfer "any appropriation made available in this title," as long as it does "not exceed $200 million."

Add them all up: $9.3 billion—11 percent of the entire, already-controversial sum (and that doesn't include the expandable loophole provided by the "not less than" clause).

There is no overlap or double-counting in this calculation. Each of these separate sections explicitly notes, "The transfer authority provided in this section is in addition to any other transfer authority available to the Department of Defense" (italics added), or words to that effect.

In the supplemental document, the Pentagon offered explanations for these loopholes. Transfer accounts are "necessary due to the dynamic nature of these operations," or "to provide the flexibility needed to allocate funding to those components that are actually incurring costs," or "to help the Department address the unpredictable scope, duration, and intensity of these military operations."

Certainly postwar Iraq and Afghanistan are a lot more unpredictable than, well, the Pentagon predicted. Much of life is unpredictable. That's why budgets have supplementals. The entire $87 billion request is officially designated "an emergency requirement." Yet much of it is broken down into specific line-items or at least general categories of spending. Is the situation really so unpredictable that more than $9 billion of that sum—and possibly much more (the "not less than" clause)—might need to be spent in ways so quickly, and so differently from what is currently imagined, that Rumsfeld must be given the authority to move it around, from one account to another, without prior congressional approval? If the circumstances do warrant it, couldn't he simply put forth another supplemental? The present supplemental didn't run into many obstacles, despite growing criticism of the whole operation; there's no reason to fear that a subsequent one would, either.

So why have three committees of Congress essentially abrogated such a sizable chunk of their oversight powers? Mainly because they wanted to. The lawmakers can play populist politics, tossing out hundreds of millions of dollars for new Iraqi hospitals, housing, garbage trucks, and business subsidies. They can thunder that their constituents—the American people—don't get federal money for such niceties, so why should Iraqis? Meanwhile, they know that Rumsfeld can use some of the slush-fund money—the "transfer funds"—to put them back in the budget, very low key, notifying the committees but not needing their permission. Responsibility is thus eluded, electoral-politics points are gained.

The trick lets legislators avoid a few hundred million dollars' worth of potential outrage from the constituents. The price they pay, though, is that Rumsfeld gets several billion dollars of walking-around money for whatever projects in the region he may want to enrich.

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