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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. (Rumsfeld 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.” (O'Meara 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. (O'Meara 8/21/2003)


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