[db48x]

No, it really wasn’t outrageous. It was bad accounting, but not an outrageous waste of money.

They were essentially building repair kits that could be shipped off to military bases and used to maintain particular pieces of equipment. The contractor bought the tools and spare parts in bulk, marshaled them all at some warehouse somewhere, and then broke down the bulk items into individual kits. A palette full of hammers got broken up so that each kit had exactly one hammer. The same has to happen for all of the other tools and items in the kit.

That’s a useful service and it is definitely worth paying money for. If you want a good example, check out this video: https://www.youtube.com/watch?v=FxBgTDpsUC0. You can see how this would be used: in the 1940s the army was setting up bases everywhere, and they all needed to communicate with each other. So obviously you ship out teletype machines, a repair kit or two, a pile of manuals, and a platoon of Signal Corps engineers to keep the teletypes in working order. The kit is mostly common tools, but if every base had to order every one of those items individually then it would be chaos. Logistics wins wars, and this is a very good example of how.

Then whoever did the bookkeeping recorded it as if they had purchased COTS items each with some normal price, instead of doing it as a contracted service with both material and labor costs. You see how one bookkeeping method can be used to generate outrage for political gain, while the other cannot? It was an entirely cynical manipulation on the part of the politician(s) in question.

[lmm]

> Then whoever did the bookkeeping recorded it as if they had purchased COTS items each with some normal price, instead of doing it as a contracted service with both material and labor costs.

OK, and why was that? Like, they were essentially embezzling this "R&D cost"; even if they were embezzling for the sake of buying useful military equipment, embezzling is still an outrage, I think rightly.

[db48x]

There’s no evidence that it was embezzlement, or any other type of fraud. Just bad accounting.

[lmm]

"Embezzlement is [...] where someone takes money or assets that were entrusted to them and uses them for a different purpose than for what they were intended." That would seem to apply just as much to spending funds on useful military equipment that's different from what they were allocated for as it does to spending them on blackjack and hookers. If the funds were being spent correctly then why would they be accounted for falsely?

[db48x]

> If the funds were being spent correctly then why would they be accounted for falsely?

How should I know? There’s never been any hint that the funds were spent on the wrong items. After all, the military has a rather large budget for spare parts and repair equipment, and Congress doesn’t micromanage how many hammers they are allowed to buy.

Most likely it was just an honest mistake. Someone used form P instead of form Q (or told the contractor to), and accounting didn’t notice. Indeed, if this were evidence of a crime I think the politician in question would have lead with that, rather than pointing it out as an example of government waste (which is bad but not generally criminal).

[lmm]

> There’s never been any hint that the funds were spent on the wrong items.

How would we ever know, if they can be incorrectly accounted for and no-one cares?

> Indeed, if this were evidence of a crime I think the politician in question would have lead with that, rather than pointing it out as an example of government waste (which is bad but not generally criminal).

Proving intent is a lot harder. If the government is overpaying its contractors... there's probably crime going on there too, but it'll be the nudge-wink kind that's very hard to prove. You funnel an overlarge contract to them, then a few years later after you've gone around the revolving door they funnel an overlarge contract to you. That's a crime, but it doesn't leave any evidence except, well, overly large expenditures in the accounts.

[db48x]

> How would we ever know, if they can be incorrectly accounted for and no-one cares?

I am saying that they purchased the correct items. We _can_ know that because there is an itemized list of items that they purchased.

> Proving intent is a lot harder. If the government is overpaying its contractors... there's probably crime going on there too, but it'll be the nudge-wink kind that's very hard to prove.

Don’t misunderstand, I never said that this wasn’t plausible. I just said that there’s no evidence of it. And if there had been evidence, ~30 years ago when this was a current event, the aforementioned politician would have mentioned it. Remember, this guy was looking for soundbites that would make himself look good. Finding government waste made him look good, but finding corruption would have been even better for him.

Worse, even the allegation that this was a wasteful purchase doesn’t really hold up either. A $435 hammer (or a $600) hammer makes for a great soundbite, and plenty of easy outrage from the average voter. But it hinges on nobody looking too closely, because the reality is that they just paid a contractor to purchase COTS parts and assemble them into repair kits. There’s nothing outrageous about that, once you get past the odd bookkeeping.

The most outrageous thing about it is that the politician relied on the “$600 hammer” story for years without much push–back from the media. The media in general should be much more skeptical of things that politicians say. They should check the facts independently, and they should report on the truth or falseness of the statements.