September 10, 2001: Defense Secretary Rumsfeld Announces Defense Department Cannot Track $2.3 Trillion in Transactions

In a public speech to the Department of Defense, Defense Secretary Donald Rumsfeld announces that the Department of Defense “cannot track $2.3 trillion in transactions.” CBS later calculates that 25 percent of the yearly defense budget is unaccounted for, and quotes a long-time defense budget analyst: “[Their] numbers are pie in the sky. The books are cooked routinely year after year.” Coverage of this rather shocking story is nearly nonexistent given the events of the next day. [US Department of Defense, 9/10/2001; CBS News, 1/29/2002] In April 2002 it will be revealed that $1.1 trillion of the missing money comes from the 2000 fiscal year. Auditors won’t even quantify how much money is missing from fiscal year 2001, causing “some [to] fear it’s worse” than 2000. The Department of the Army will state that it won’t publish a stand-alone financial statement for 2001 because of “the loss of financial-management personnel sustained during the Sept. 11 terrorist attack.” [Insight, 4/29/2002] This $1.1 trillion plus unknown additional amounts continues to remain unaccounted for, and auditors say it may take eight years of reorganization before a proper accounting can be done. [Insight, 8/21/2003]