Funds for masks and swabs went to jet parts, uniforms
WASHINGTON — A $1 billion fund Congress gave the Pentagon in March to build up the country’s supplies of medical equipment has instead been mostly funneled to defense contractors and used to make things such as jet engine parts, body armor and dress uniforms.
The Cares Act, which Congress passed earlier this year, gave the Pentagon money to “prevent, prepare for, and respond to coronavirus.” But a few weeks later, the Defense Department began reshaping how it would award the money in a way that represented a major departure from Congress’ intent.
The payments were made even though U.S. health officials think major funding gaps in pandemic response still remain. Robert Redfield, director of the Centers for Disease Control and Prevention, said in Senate testimony last week that states desperately need $6 billion to distribute vaccines to Americans early next year. Many U.S. hospitals still face a severe shortage of N95 masks. These are the types of problems that the money was originally intended to address.
“This is part and parcel of whether we have budget priorities that actually serve our public safety or whether we have a government that is captured by special interests,” said Mandy Smithberger, a defense analyst at the Project on Government Oversight, a watchdog group.
DOD officials contend that they have sought to strike a balance between boosting American medical production and supporting the defense industry, whose health they consider critical to national security. The Pentagon, which as of 2016 employed more than 156,000 people working in acquisitions alone, also has lent its expertise to the Department of Health and Human Services as it seeks to purchase billions of dollars in needed medical equipment.
“We are thankful the Congress provided authorities and resources that enabled the (executive branch) to invest in domestic production of critical medical resources and protect key defense capabilities from the consequences of COVID,” Ellen Lord, the Pentagon’s undersecretary for acquisition and sustainment, said in a statement. “We need to always remember that economic security and national security are very tightly interrelated, and our industrial base is really the nexus of the two.”
After the Washington Post reported the funding changes in an online article Tuesday, two House Democrats called for an investigation and public hearings on the matter, questioning the legality of how the money was used and calling it “unacceptable.”
The $1 billion fund is just a fraction of the $3 trillion in emergency spending that Congress approved earlier this year to deal with the pandemic.
Congress, at President Donald Trump’s urging, is debating whether to pass another massive stimulus package, and the Pentagon and defense contractors have called for an additional $11 billion to be directed toward their programs.
The $1 billion fund was allocated under the Defense Production Act, which allows Trump to compel U.S. companies to manufacture products in the nation’s interest.
Among the awards: $183 million to firms including Rolls-Royce and ArcelorMittal to maintain the shipbuilding industry; tens of millions of dollars for satellite, drone and space surveillance technology; $80 million to a Kansas aircraft parts business suffering from the Boeing 737 Max grounding and the global slowdown in air travel; and $2 million for a domestic manufacturer of Army dress uniform fabric.
The Democratic-controlled House Committee on Appropriations has made clear that the Defense Department’s decision to funnel the DPA funding to defense contractors went against its intent in that section of the Cares Act, which was to spur the manufacturing of personal protective equipment.
“The Committee’s expectation was that the Department would address the need for PPE industrial capacity rather than execute the funding for the (defense industrial base),” the committee wrote in its report on the 2021 defense bill.
Pentagon officials counter that they have been fully transparent with both Democrats and Republicans in Congress about their plans.
Defense industry groups argue that the DOD awards are crucial to ensuring that important niche manufacturers don’t wither away during the economic shock caused by the pandemic. Companies that sell aircraft parts for both military and commercial jets, for example, have been financially wrecked by a global slowdown in air travel.
Critics say it’s unclear why the defense industry should have gotten what amounts to a dedicated bailout fund when few other sectors of the economy got the same treatment.