By Peter Cary with Douglas Pasternak and Penny Loeb
This Cobra attack helicopter was built from surplus parts. The
Pentagon sells millions of them a year. Many fall into the wrong
To the uninitiated, "military surplus" generally conjures up images of
old web belts, clanky canteens and threadbare fatigues sold in funky stores at
the edge of fading Army bases. But to a sophisticated few, it means something
very different: aircraft, weapons and weapons parts worth billions of dollars.
Most taxpayers don't know it, but every year the Pentagon declares all kinds of
equipment--attack helicopters, rocket launchers, even Stealth fighter
parts--"surplus," or unneeded. Then, through a little-known network of sales
offices at military bases, the stuff is offered for purchase to the highest
A three-month investigation by U.S. News in collaboration with
CBS's 60 Minutes has documented serious problems with the surplus sales
program. Relying on internal Pentagon records, Customs Service documents and
interviews with scores of federal agents and officials, the inquiry identified
thousands of instances where weapons and parts that should have been rendered
militarily harmless before sale were not, where weapons that should have been
designated for destruction were not and where key weapons parts that should
have been prevented from reaching foreign buyers were not. This system "on its
best day is morally embarrassing to the government," says William Portanova, an
assistant U.S. attorney in California heading a Justice Department task force
investigating the program. "And it never has a best day. It is absolutely a
disaster of the highest magnitude."
No Pentagon officials responsible for this program were willing to be
interviewed on the record. These are the principal findings of the U.S.
News--60 Minutes inquiry:
Foreign buyers are purchasing many of the Pentagon's high-tech surplus
military parts and shipping them overseas, hiding them in seagoing containers
under tons of metal scrap, seizure records show. Customs officials say Iran and
Iraq are active buyers, but by far the biggest customer is China. Among the
items seized from Chinese "scrap dealers" were fully operational encryption
devices, submarine propulsion parts, radar systems, electron tubes for Patriot
guided missiles, even F-117A Stealth fighter parts. Many of these parts, sold
as "surplus," were brand new.
So overloaded is the Pentagon's surplus sales system that some offices
responsible for disposing of the materiel have suffered significant breakdowns.
At an Air Force base in Georgia, the Pentagon's surplus sales office lost track
of $39 million in materiel. Today, no one can say where the stuff went.
The sheer volume of surplus materiel generated by the Pentagon's
downsizing is one reason for the system overload, but the modern Pentagon's
insistence on profitability is another. Last year, the surplus sales system
generated $302 million, and it is one of the few Pentagon programs capable of
covering its own costs. A Pentagon E-mail message written in April 1994
illustrates clearly the premium placed on profits by senior military officials.
Authored by a top-level official and addressed to all surplus sales directors
on the East Coast, the memo is blunt: "The work priorities at your sites as I
see them are: 1. Profits. 2. Profits. 3. Profits. 4. Profits," the official
wrote. Priority No. 6 on his list was "accountability." No. 7 was rendering
lethal weaponry harmless.
Surplus Pentagon weapons are regularly traded away by Army and Navy
museums scattered around the country, and some have been responsible for
questionable if not illegal activities (story, Page39). A federal law
allows the museums to trade tanks, jet fighters, and attack helicopters to
private citizens for other vehicles or "services." Two museums are under
federal criminal investigations for such activities.
Within the cloistered world of the Pentagon, the problems of properly
disposing of surplus weapons are nothing new, although the public has been kept
largely in the dark. Surplus weapons sales are overseen by a Pentagon office
called the Defense Logistics Agency, which manages all the military's supplies
and equipment. The DLA has spent much of the past two decades trading barbs
with the four military services about how to fix the surplus sales system.
Progress has been virtually nonexistent. Nearly a decade ago, an internal
memorandum signed by William Taft, then the deputy secretary of defense,
leveled a startling charge. "A joint U.S. Customs- investigation [has]
confirmed," Taft wrote, "that the defense disposal system is a source of supply
for arms traffickers." Since then the number of surplus weapons and critical
parts has increased, and the problems have only worsened.
Guns and money. How much Pentagon weaponry is getting into the
wrong hands is impossible to know, but it is happening, law enforcement
officials say. When a Hell's Angels methamphetamine lab was raided in
California last year, police also found military weaponry: three working
machine guns and an M-79 grenade launcher. The grenade launcher was traced to a
Pentagon surplus sales outlet in Crane, Ind. That same outlet had sold 70 of
the launchers in 1989. Pentagon documents certified that the launchers had been
cut into scrap; in fact, only their firing pins had been filed down. In 1992,
in Illinois, a man was sentenced to 41 months in prison for illegal possession
of 10 unregistered machine guns; the man had bought the weapons through
Pentagon surplus sales and welded them up to make them work. The weapons should
have been mutilated so they could never work.
Smuggling is an even bigger concern. A 16-month Customs Service
investigation that ended earlier this year resulted in the interception of
surplus military parts worth $157 million. Foreign countries can use these
parts to resupply their own armies, to find out how American weapons work or to
build their own weapons, avoiding years of costly development.
Despite a handful of successes prosecuting those who abuse the
Pentagon's surplus sale system, federal officials who have tried to plug the
holes in it are frustrated and angry. A few Pentagon officials have found
themselves demoted or reassigned for being too aggressive. Federal task forces
have been quietly disbanded with few results while prosecutors who take on
inquiries involving illegal surplus-weapons sales say they find the criminal
justice system unable or unwilling to cope. "Whenever we tried to do something
bold or aggressive, the bureaucracy at the Justice Department said `No,' " said
Jim Wiggins, a former U.S. attorney in Georgia who investigated surplus-weapons
In theory, the system for surplus disposal is simple. Whether it is a
part from a jet fighter or a pair of socks, once an item is designated as
surplus, it is trucked to a warehouse-cum-sales lot known as a Defense
Reutilization and Marketing Office, or DRMO. There all surplus items are
checked in and sorted. Then they are offered free to other government agencies
and to museums and nonprofits. What's left after that is sold to the public at
auctions where buyers must submit sealed bids.
Before that can happen legally, however, weapons and weapons parts must
be "demilitarized," or rendered militarily harmless. Machine guns, for
instance, are "demilled"--the Pentagon term of art--by being cut into six
pieces, reducing them to scrap metal. Many electronic parts are demilled by
crushing or chopping--again, reducing them to scrap. Some items--radios with
military-channel crystals, for instance--can be demilled by removing key parts.
In such instances, buyers get a functional piece of equipment but one that has
no military application. Many items, like desks, require no demilitarization.
Other things, like parts of military aircraft that have commercial use, can be
sold in the United States without being demilitarized, but buyers must obtain
licenses to ship them overseas.
How or whether something should be demilitarized is determined by its
"demil code," which is normally assigned when a piece of equipment is purchased
by the Pentagon. In theory, the codes should reflect how militarily sensitive
an item is, and the code for a specific item should rarely be changed. Theory,
however, has little to do with practice. Three years ago, for instance, a team
of nine demilitarization experts went to Battle Creek, Mich., the home of the
Defense Reutilization and Marketing Service. That office is the headquarters of
the surplus sales program, responsible for the operation of the 170 DRMOs
around the country. In Battle Creek, the team reviewed the demilitarization
codes on 2.6 million pieces of equipment in the 14 million-item inventory. The
team found that 45 percent of the demilitarization codes were wrong and that
about half the items were coded too leniently. This meant that weapons and
weapons parts that should have been rendered militarily harmless before being
offered for sale were not. Some .38-caliber revolvers, for instance, were coded
demil "A"--the same as tables and chairs. Other, far more sensitive equipment
was similarly miscoded, the team found. Electronics that guide bombs and
aircraft gunnery, sensitive communication and navigation gear, cryptographic
equipment, even hardware that allows U.S. fighter jets to jam antiaircraft
missiles--in those categories, the team found between 80 percent and 90 percent
of coding was wrong. In nine tenths of the errors discovered in this instance,
the codes applied were too lenient.
Such mistakes have consequences. When Pentagon investigator Dave
Barrington checked a DRMO outlet at Fort Benning, Ga., for example, he found
three complete TOW antitank missile systems for sale. They were assigned a code
allowing them to be bought by anyone in the United States. Says Barrington:
"You can build yourself an army out of this stuff that's miscoded."
Defense Department officials blame the military services for the
miscoding, since the services assign the codes. The services don't make coding
a high priority because anything dealing with "surplus" is a far cry from their
main mission, warfare.
The profit motive is also a factor. The more fully-operational weapons
the Pentagon sells, the more money it makes. And the Pentagon is interested in
selling. To encourage sales, in fact, the Defense Department has set up a
Web page on the Internet listing every
piece of equipment that has entered the surplus inventory. Anyone with a
computer can call up the listings, type in "missiles" or "bombs" or other
hardware and see what's available.
U.S. News did just that. After browsing the Web site at length,
a reporter gave Defense Department experts a lengthy inventory of items listed
and asked them to verify that the demilitarization codes for each were correct.
The experts found that dozens of items had been wrongly coded. "Bomb, gen.
purpose," for instance, had been given the same demilitarization code as a desk
chair--"A." Similarly miscoded were "sight, rocket launcher," "controller,
missile," and "missile guidance set." All should have been coded "D"--for
destruction. "This is the computer memory for a Tomahawk [cruise] missile!" one
of the Pentagon experts exclaimed, pointing to one item on the reporter's
shopping list. "This should be classified! This is the brains of the missile!"
Even when the Pentagon codes are correct, there is no guarantee that
weapons and weapons parts will be demilitarized properly. Curt Murphree, a
former Pentagon investigator, recalls one visit to a DRMO near Texarkana,
Texas, where he watched a worker trying to cut through the gun barrel of an
M-60 tank. "The poor kid had a cutting torch," Murphree recalled, "that
couldn't cut hot butter."
System overload. At the Defense Reutilization and Marketing
Offices around the country, workers and managers say they have been so
overloaded with equipment from the massive military drawdown--in recent years,
the DRMOs have taken in more than $20 billion worth of materiel annually--that
the demilitarization process was bound to have problems. Easily the biggest
occurred at Robins Air Force Base near Macon, Ga. So much property came into
the DRMO there three years ago that the system collapsed, and workers lost
track of $39,784,198 in surplus equipment--about one fifth of their inventory.
"The DRMO lost total accountability of . . . surplus property," an
investigative board's report concluded.
Investigators assigned to examine the problems at Robins found that the
Pentagon's DRMOs had developed what they called an "expedited processing"
program. To speed things up, a Robins DRMO manager told investigators, she
falsified demilitarization statements, registering weapons and other equipment
as scrap that was later made available for sale fully intact.
The problems at Robins raised alarms. One day in 1994, an Air Force
investigator jogging on the base saw a surplus-parts dealer named Hobart Burton
carrying an electronic device from the DRMO to his truck. The investigator
looked into the truck, jotted down the stock number of the item and checked it
later. He found that the device should have been demilitarized but had not
been. Not long after that, a team of Air Force and Pentagon agents visited the
Burton Electronics warehouse in nearby Montezuma, Ga., where they found more
electronic weapons parts that had not been demilitarized. The agents retrieved
a pile of weapons pieces and aircraft parts that had cost the government $40
million when new. Burton said he had bought most of the materiel from other
dealers; investigators believe much of it was sold by the Robins DRMO as
scrap--for 16 cents a pound. It is not illegal to buy surplus materiel that was
improperly demilled, and Burton was not charged with any crime. He is now
trying to get his money back.
The episode resulted in some surprising leads. Investigators discovered
that a Chinese-owned scrap company was legally buying surplus materiel from
Burton and from the Robins DRMO. Further inquiries revealed a score of Chinese
dealers operating from coast to coast. Although no proof developed that they
acted as agents for China, that did raise concerns. In a memo to his Chinese
boss in California, the buyer in Georgia called Robins "the candy store." The
base, he wrote, "will fill our needs into the next century," according to an
investigator who has seen the note.
The Robins case had all kinds of reverberations. It led investigators
to the discovery of a commercial listing service that offers thousands of
military surplus weapons and weapons parts. The listing, called the Inventory
Locator Service or ILS, is used worldwide by dealers in aircraft parts to
advertise their inventories. Surplus dealers also use it to advertise weapons
and weapons parts, all of which is perfectly legal too.
Fallout. The echoes from the Robins case would eventually be
felt clear across the country, in Montana, of all places. Ron Garlick is a
straight-talking businessman who runs a thriving helicopter-repair business
about 40 miles south of Missoula. Garlick had modified UH-1 Huey helicopters
for logging and construction use. Since the Cobra was a sleek and powerful
follow-on to the Huey, he thought it would make a good logger. Garlick obtained
an FAA license to build one for logging, firefighting or movie-making purposes.
When armed, the Cobra is one of the deadliest military attack vehicles
ever invented. Before it is sold as surplus, it must be demilitarized. The
demilitarization manual states that Cobra bodies must be cut into at least
three parts and that their "airframe [must be] mutilated by destroying
attaching structure by cutting, chopping, tearing, shredding, crushing or
smelting to the degree that aircraft will be unfit for repair or flight."
Garlick and other helicopter builders, however, knew that usable parts were
plentiful, even at DRMOs. Says Garlick, who has amassed a huge store of Cobra
parts, "If they were built once, I can rebuild it, and no one can stop me."
In September 1994, a flatbed truck pulled into the DRMO at Robins
carrying three Cobra bodies that looked as if they had not been properly
demilled. Air Force investigators questioned the truck driver, who said the
Cobras had been purchased at a DRMO in Groton, Conn., and were headed for a
warehouse in Joshua, Texas, owned by a man named Alan Sparks. "I don't know why
you are so excited," the man reportedly said. "Sparks has 60 or 70 of these
Original crates. Sparks actually had 88 Cobra fuselages, which
he hoped to use for logging. He also had the parts to go with them--the rotor
blades, rocket tubes, gun pods, missile launchers, and weapons controllers,
according to Pentagon records. "None of the items were demilled correctly," a
Pentagon memo states. "Some items [were] in original packing crates."
Word of Sparks's covey of Cobras shocked Jim Wiggins, the top federal
prosecutor for the middle district of Georgia, where Robins is located. A tall,
sandy-haired man with a deliberate manner, Wiggins had won a Silver Star in
Vietnam for piloting a Cobra gunship in a hazardous rescue mission. At the time
of the Sparks discovery, Wiggins was overseeing something called the Middle
Georgia Task Force, which consisted of military investigators and special
agents of the Customs Service and the FBI. The task force had been set up after
the $40 million retrieval of property from Hobart Burton.
The other person upset by Sparks's Cobras was Ron Garlick, in Montana,
who telephoned the Pentagon to see what was going on. The call was lateraled to
investigator Dave Barrington. Garlick was concerned over the Sparks seizures,
he said, because he, too, was building Cobras--and he saw no reason to give his
up. According to Barrington's notes, Garlick said he "had a significant amount
of intact weapons and weapons systems." Garlick confirms this. "Mine was fully
armed," he says of his chopper. "I had rockets on it and machine guns. I was
out there shooting coyotes with them."
Garlick didn't want trouble. The government could have his Cobra
weapons, he said, if they "want to buy them." Barrington finished scribbling
his notes, thanked Garlick and hung up.
The fate of the Cobras would hang in the balance for months, as a
bitter wrangle ensued inside both the Pentagon and the Justice Department.
Investigators, federal agents, demilitarization officers and prosecutor Wiggins
pushed for seizure of the Cobras. But the Army, which owns most of the
choppers, resisted, as did Col. Charles Masters, who was in charge of surplus
disposal. Feelings ran so high that Wiggins hauled Masters before a grand jury.
Masters says: "Quite frankly, I thought I was close to being charged. With
what, I have no idea." Ultimately, Wiggins prevailed, and the government seized
the helicopters and parts from Sparks. But as agents began to plan raids on
Garlick and other owners of Cobras, the Justice Department brought all such
seizures to a halt. The law that might authorize them was just too murky. On
September 25 of this year, the FBI sent a letter to the Pentagon advising that
23 Cobras belonging to private citizens had been "discovered during several FBI
investigations." (U.S. News has located two more.) Should the Pentagon
choose to take "corrective action," the FBI letter advised, that would be
agreeable to local U.S. attorneys. One senior Pentagon investigator calls this
the FBI's "Pontius Pilate" letter. "They're washing their hands of the whole
thing," he says.
Security threats. As worrisome as the Cobras may be to law
enforcement, agents say that the greater threat to national security is the
shipping of weaponry overseas. In September 1994, about the time the
flatbed-truck driver with the three Cobras was pulling into Robins, Pentagon
investigator Curt Murphree got word that a California company named Cal
Industries was loading 14 seagoing containers at the Pentagon DRMO in San
Antonio. The contents were listed as 240 tons of electronic scrap. Murphree,
who knew that the base processed lots of sensitive weapons equipment, got
Customs Service agents to stop the containers and pry them open. What they
found were thousands of top-secret encryption devices, hard-cased field
computers used for sending coded communications, as well as classified radio
transmitter-receivers. None had been properly demilitarized. There was also a
pile of banged-up Wang computers, but many still had their hard drives, and two
had 5¼-inch floppy disks in them. One disk was marked "Classified SCI"
(special compartmented information). The other was marked "Top Secret, SCI.
Contains Special Intelligence." Murphree checked and found that the equipment
had come from the most secure sector of Kelly Air Force Base, known as
"Security Hill." "None of this material," Murphree said, "should have ever left
the DRMO." The equipment's intended destination was Hong Kong, a common
transshipment point for goods bound for China. Kelly Air Force Base took it all
back. No charges were filed against Cal Industries, which had bought the stuff
legally. "Candidly," says former U.S. Attorney Wiggins, "the way we handle this
stuff so recklessly, it's hard to pin anyone down or hold them liable."
For 16 months, U.S. Customs ran an investigation that targeted surplus
smugglers, says John Hensley, the special agent in charge of Customs Service
investigations in Los Angeles. Dubbed "Operation Overrun," the investigation
resulted in nine seizures of $157 million worth of parts bound for China, Hong
Kong, Vietnam, the Philippines, Taiwan and elsewhere. None of the items seized
had been licensed for export. Included in their overseas-bound shipments were
radar systems, electronic-warfare black boxes, and some bizarre items--10,000
new chemical-warfare-protection suits headed to Ukraine.
In one case, records show, 28 boxes of tank and howitzer parts, valued
at $800,000, were found buried inside a container beneath automotive parts. In
another, bound for Shanghai, agents found 37 separate inertial guidance devices
for the F-117A Stealth fighter and F-111 bomber. New, the devices had cost the
government $21,759,400. The two Pentagon employees who were identified as
responsible said they could not explain how the devices had been sold intact.
Of the many countries pursuing Pentagon surplus weapons, China is
clearly running hardest. "China is the most aggressive country worldwide in the
acquisition of military hardware," says customs agent Hensley. "Anything that
seems to us to be mid-tech, or slightly out of date, is high tech to them. They
can leapfrog R&D costs. They either reverse-engineer this stuff, or if they
get enough, they just use them."
Operations. Customs agents are now convinced that a Chinese
surplus-smuggling operation began as many as 15 years ago, when a flood of
Chinese men and women entered the United States, established themselves as
residents and then set up shop. Operating with little more than a fax machine
and a bank account, they apparently form the lowest tier of the Chinese
espionage network, agents say.
The buyers hunt surplus sales outlets for military electronic parts.
When they find what they want, they bid high enough to be sure they get it.
Bids of $50,000 or $100,000 for scrap are not unusual. Sometimes they buy huge
piles of scrap knowing that valuable pieces of electronics equipment are
included, or they share purchases with legitimate scrap dealers. One dealer
with Chinese affiliations, says investigator Barrington, "was the high bidder
on every piece of scrap electronic equipment on the East Coast."
In a year and a half of intense investigation of these buyers, the
Customs Service has never found a smoking gun--a written shopping list from
overseas, or anything that could link particular Chinese scrap buyers to
Beijing or its defense agencies. "I think the reason for that, besides good
intelligence tradecraft, is that they don't need to communicate directly," says
a customs agent. "These people have been doing this for 15 years. They know
exactly what their country wants."
Last March, after 16 months of dogging leads, the Customs Service
abandoned Operation Overrun. The agency had run out of time and money; the
investigation had not been a spectacular success. Besides the $157 million in
seizures, only two criminal cases had been brought. A man named Richard Li had
been intercepted smuggling sensitive electronic gear to Hong Kong and pleaded
guilty to smuggling. A second man is currently under arrest, and his partner is
on the run. Customs Agent Hensley says the investigation clearly put pressure
on the network of Chinese traffickers. But he also is certain that once the
pressure is off, the smugglers will resume their operations. "We definitely
think they'll spring up again," he says. "The Chinese can get up to speed to
buy the stuff again, and the U.S. is the biggest warehouse in the world."
One of the biggest listings of warehoused arms and arms parts can be
found on a system called the Inventory Locator Service. ILS is a business
located in Memphis. ILS offers a computerized classified listing to paid
subscribers. About 3,000 aircraft-parts sellers and users worldwide subscribe
to it, for a fee of several hundred dollars a month. The sellers list their
inventories on the system, and buyers can scan the inventories as they browse
for purchases. ILS President Bruce Langsen says the computer system is queried
about 26,000 times each day.
Heavy-duty stuff. Pentagon investigator Barrington remembers
vividly the first time he tapped into the ILS database. A former police officer
and Army Criminal Investigations Division agent who won a Bronze Star in the
gulf war, Barrington went to work for the Defense Logistics Agency in 1994.
Back then, he thought he had a pretty good sense of the international arms
market, but the stuff he saw listed in the ILS database disabused him of that.
"I ran weapons, machine guns, flamethrowers and components of guided bombs," he
says. "And immediately, I was getting hits!"
A printout Barrington made from his ILS visits is an eye-popper. It
runs 26 pages, single spaced, and lists such items as AIM-9 Sidewinder
missiles, GBU-10 guided bombs, Maverick missiles, machine guns and grenade
launchers. Virtually everything on the list should have been demilitarized, and
probably destroyed--but it was all available for sale.
Curious to figure out where the stuff came from, Barrington began to
check those items against sales at DRMOs. Checking more than 100 weapons parts
advertised on ILS, he found that one fifth had been sold to surplus dealers in
just the past three years. All were available in the United States. With more
research, he came to believe that the heavy-duty weapons, the bombs and rockets
and missiles, had probably been sold legally by the Pentagon to foreign
governments, which then sold them as surplus. Brokers using ILS then offered
them for sale.
Langsen, the ILS president, says he has provided law enforcement
agencies access to his company's computer listings, but he did not know the
details of their investigations. Because there are 30 million items listed on
the inventory, Langsen contended that searching for weapons is not easy. But
when U.S. News gave him the stock number for a grenade launcher, Langsen
was able to find it pretty quickly. "From what I have learned in the past 48
hours," he said, "we are going to need to find a better way of combing the
database. We are not an armaments database, and we don't want to become an
The U.S. News test of the ILS system shows how easily surplus
weapons and weapons parts can be purchased by the public. Using a dummy
letterhead, the magazine sent letters to many of the companies listing weapons
parts on ILS, requesting price quotes and availability for a variety of weapons
and parts. The sellers responded with price quotes for 35 items, ranging from
bomb-arming devices to circuit cards for nuclear submarines' targeting systems
to the key components of night-vision scopes. U.S. News even bought
some, and, with 60 Minutes, went undercover to talk with surplus
dealers. Several dealers said that in buying aircraft parts at DRMOs they often
scooped up a lot of other hardware, such as weapons parts. They said they
listed it all on ILS hoping that someone would spot it and buy it.
Some dealers said they wouldn't sell weapons or parts to people who
seemed shady. Others admitted that the system had almost no controls. "I could
sell this to you," one weapons dealer explained, "and you could sell it to
someone else, and he could sell it to someone else." Another dealer wrote that
he had the parts we ordered, such as a pilot's targeting screen, known as a
heads-up display, for an F-16 fighter, and had bought them from a DRMO but
wanted more information about our company before selling to us. Another offered
to ship us a similar part, with no questions asked.
One company, Aviarms Support Corp. in Westbury, N.Y., had a different
story. A manager there said the items the company advertises on ILS are held by
Israeli, German and Dutch companies for whom it acts as a broker. Many of the
U.S. weapons parts came from the surplus stocks of the Israeli and German
militaries, he said. Had they been demilitarized? No, he said, they were all in
good working order.
One part that Aviarms was selling was listed as an "F-117A fire control
memory." Asked how Israel could have obtained surplus parts for the U.S. F-117
Stealth fighter, the manager checked his computer. Aviarms was brokering it for
an Israeli company, which got it from a German company, he said. He could trace
it no further.
Barrington was outraged by what he found on ILS. His last year at work
was consumed with tracking DRMO sales of sensitive weapons parts and trying to
get his superiors at the Defense Logistics Agency to take action. He sent
E-mail after E-mail message up and down the command chain. "Below are a few
examples of obviously Demil-required property offered" at DRMO sales, he wrote
in August 1995: "Payload section, nuclear missile. Warhead components: DRMO San
Antonio . . . Multipurpose display, F-117A Stealth Fighter: DRMO McClellan Air
Force Base, California . . . F-111 Navigation and attack computer: McClellan
Air Force Base DRMO . . . Heads-up display, F-111B fighter-bomber: DRMO
Davis-Monthan Air Force Base, Arizona."
Barrington had the support of his co-investigators, and even some
higher officials at the logistics agency, but little was done. There were no
seizures, no attempts to recover the items. On June 5, Barrington sent a final
E-mail to his bosses. "Nearing the end of the trail here. I know all of you are
very concerned about the OBVIOUS total lack of control of our vital defense
technology and hardware, but I can't help but wonder after nearly two years of
almost DAILY findings such as those above, why the government has not seen fit
to attempt to recover ANY of the thousands of sensitive or classified items
discovered via ILS." Barrington then quit to become a Baptist minister.
While no senior Defense Department official was willing to meet with
U.S. News and 60 Minutes to discuss these problems on the record,
a group of knowledgeable middle-level Pentagon and Defense Logistics Agency
managers met reporters and confirmed many of their findings. The officials
quibbled with some assertions. For instance, they acknowledged that there has
been pressure in the past to cut corners to sell surplus materiel, as evidenced
by the "profits, profits, profits, profits" memo. But they also insisted that
the new management at the Defense Logistics Agency is not profits driven. The
officials blamed the four military services, which control most of the
demilitarization codes, for writing the codes too leniently and for failing to
change them when errors are pointed out. They said the DRMOs are no longer
accepting items with demilitarization codes that had been phased out two years
They also said some fixes are in the works. One of their main goals,
the officials say, is to set up a centralized demilitarization code office,
which will assign and control all the codes, and try to enforce them. The first
step toward that, they say, should occur next year. Investigations underway at
two Pentagon museums could also result in tightening of the current rules
allowing bartering of government aircraft for a variety of services.
If those steps happen as planned, they will clearly result in some
improvement, but the problem is so great that it is difficult to say what real
effect they might have. "The scope of this program and the amount of materiel
going out the door is so huge, people normally don't believe you," says
Portanova, the assistant U.S. attorney in Sacramento. "Only the government
could have a program where they give everything away for free and they screw it
BY PETER CARY WITH DOUGLAS PASTERNAK AND PENNY LOEB