75 The Real Game of Missing Money wanting to reengineer the federal budgetary process. The first is that much of defense contracting has been organized and priced on a “cost-plus basis.” That is, contractors are reimbursed for their stated costs plus a set mark-up. Experts familiar with the defense procurement process believe that this has resulted in ballooning expenses, poor performance, and less innovation. Second, government contractors are rarely disqualified despite criminal behavior or corporate malfeasance or even criminal conviction. One of the more infamous cases concerned a govern- ment contractor that was sued on multiple occasions for sex slave trafficking, including by the project contract manager—accusations confirmed by defense department criminal investigators. The contractor in question continued on as the largest contractor at the U.S. State Department, was protected by senior state officials, and then was awarded a sole-source contract to manage the criminal justice system in Iraq. Third, there is often no more carefully hoarded information within a federal agency than the agency contract budgets. If our government is going to be run by government contractors, then we need to know who they are, what they are responsible for, and how that relates to any finan- cial reporting and accounting problems we are having. David Walker was head of the GAO, chief auditor to the U.S. Congress, while the U.S. govern- ment consistently failed to comply with laws requiring audited financial statements and over $4 trillion went missing. One reporter with whom I was working was promised by Walker that he would publish the names of government contractors associated with these losses. This was after petitions under the Freedom of Information Act to the agencies failed to result in even basic disclosure of the relevant contractors and their contracts. Mr. Walker failed to ever honor that commitment. Today, with the names of those contractors still invisible, Mr. Walker serves as the CEO of the Pete Peterson Foundation, where he pontificates on fiscal accountability and the need for Americans to tighten their belts. Fourth, perhaps the greatest risk of all is the outsourcing of our military capacity. Overall, federal employment has declined in recent decades. One reason for this is the increased dependency of the military on outside contractors. Given the importance of the U.S. active and reserve military for national defense, the idea that these functions are dependent on private corporations whose investors also control governmental purse strings is truly frightening to contemplate. Fifth, private contractors often operate without legal liability, creating governmental and military operations for which no one is liable. One famous example of this “nether world” came out when Gary Webb published his Dark Alliance news series and book on government narcotics trafficking in South Central Los Angeles. In response to citizen concern inspired by Webb’s story, then Director of the CIA, John Deutch, agreed to attend a town hall meeting in South Central Los Ange- les with local Congressional representatives in November 1996. Confronted by allegations in support of Webb’s story, Deutch promised that the CIA Inspector General would investigate the “Dark Alliance” allegations. This resulted in a two-volume report published by the CIA in March and Octo- ber of 1998 that included disclosure of one of the most important legal documents