Watchdog Stings Defense Dept., Obtains $1.2 Million In Military Gear With A Fake Cop Shop

from the 1033-open-air-bazaar dept

The Defense Department's 1033 program allows local law enforcement agencies to buy military equipment. Often, the purchases are made easier with sizable grants, meaning agencies can load up on assault rifles, grenade launchers, armored vehicles, and extra ammo at nearly no cost. (They can also get computers, office furniture, etc. through these grants, but if that were the extent of the program, there would be zero controversy.)

The 1033 program is supposed to be tightly controlled and every acquisition vetted to prevent high-powered military gear from falling into the wrong hands. We've already noted local agencies aren't performing much in the way of oversight, resulting in several agencies receiving suspensions for failing to account for the whereabouts of purchased gear.

The problem, however, isn't just on the receiving end. The Defense Department isn't doing much in the way of due diligence when adding new agencies to the list of military gear purchases. The Government Accountability Office (GAO) performed a sting operation, setting up a fake law enforcement agency to see if it could acquire used military gear. By the end of it, the fake agency had obtained $1.2 million in gear, all without ever having to speak directly with anyone at the Defense Department. From the GAO's report [PDF]:

[O]ur investigators, posed as authorized federal law enforcement agency officials of a fictitious agency, applied and were granted access to the LESO [Law Enforcement Support Office] program in early 2017. In late 2016, we emailed our completed application to the LESO program office. Our application contained fictitious information including agency name, number of employees, point of contact, and physical location. We also created mail and e-mail addresses, and a website for our fictitious law enforcement agency using publicly available resources. All correspondence, including follow-up questions regarding our application, was conducted by email with LESO officials.

The first application was sent back for fixes. The revised application -- still loaded with fake info -- sailed through. It even included fake legal authorization.

LESO officials also emailed us to request confirmation of our agency’s authorizing statute; in response, our investigators provided fictitious authorizing provisions presented as a provision in the U.S. Code. At no point during the application process did LESO officials verbally contact officials at the agency we created—either the main point of contact listed on the application or the designated point of contact at a headquarters’ level—to verify the legitimacy of our application or to discuss establishing a MOU [Memorandum of Understanding] with our agency.

Not only were there no phone calls, there was no attempt by LESO officials to physically verify the existence of this fictitious law enforcement agency.

LESO’s reliance on electronic communications without actual verification does not allow it to properly vet for potentially fraudulent activity. For example, DLA [Defense Logistics Agency] did not require supervisory approval for all federal agency applications, or require confirmation of the application with designated points of contact at the headquarters of participating federal agencies. Additionally, at the time we submitted our application, DLA officials did not visit the location of the applying federal law enforcement agency to help verify the legitimacy of the application.

Since the DoD didn't perform any sort of prerequisite checks, it comes as no surprise it paid little attention to who was receiving the 1033 handouts.

Our independent testing of DLA’s internal controls also identified deficiencies in the transfer of controlled property, such as DLA personnel not routinely requesting and verifying identification of individuals picking up controlled property or verifying the quantity of approved items prior to transfer.

[...]

Using fictitious identification and law enforcement credentials, along with the LESO-approved documentation, our investigator was able to pass security checks and enter the Disposition Service warehouse sites. Personnel at two of the three sites did not request or check for valid identification of our investigator picking up the property.

From the GAO's description, acquiring controlled items appears to be no more difficult than shopping on Amazon.

Our investigators, after being approved to participate in the LESO program, obtained access to the department’s online systems to view and request controlled property. We subsequently submitted requests to obtain controlled property, including non-lethal items and potentially-lethal items if modified with commercially available items. In less than a week after submitting the requests, our fictitious agency was approved for the transfer of over 100 controlled property items with a total estimated value of about $1.2 million. The estimated value of each item ranged from $277 to over $600,000, including items such as night-vision goggles, reflex (also known as reflector) sights, infrared illuminators, simulated pipe bombs, and simulated rifles.

And, to top everything off, the DLA managed to ship this fake agency more items than it actually requested.

Furthermore, although we were approved to receive over 100 items and the transfer documentation reflects this amount, we were provided more items than we were approved for. The discrepancy involved one type of item—infrared illuminators. We requested 48 infrared illuminators but onsite officials at one Disposition Services site provided us with 51 infrared illuminators in 52 pouches, of which one pouch was empty.

The report goes on to note the DLA has never performed its own fraud audits, suggesting it has almost no interest in ensuring military gear only ends up in the hands of approved and thoroughly-vetted law enforcement agencies. Yes, all of this appears to be changing going forward, but considering the 1033 program has transferred billions of dollars of equipment already, there's really no telling how many others have obtained equipment with fictitious entities or simply ended up with a bunch of items they never ordered. That the weapons obtained were only simulators is of little comfort. They're simply modified versions of the real thing which could be made operable again with items obtained from non-government entities.

It's not that the DoD is only a few steps away from being logistically-bulletproof either. The GAO report notes the systems and controls used aren't even adequate -- which would be the minimum needed to ensure control of potentially-dangerous items. When presiding over the distribution of military gear, the DoD needs to implement controls far surpassing "adequate." So far, it can't even meet this very low bar.

Filed Under: 1033, controls, defense department, dod, gao, law enforcement, military gear, surplus