Markus Grant investigates the systems extracting from regular people. Healthcare, housing, labor, money in politics.
Each episode: name the system, show the receipts, give the audience a move they can take. Both parties named when both parties cashed the check. Mechanism over motive. No team jerseys.
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EP05: The Pentagon Failed Its Audit Again. The Budget Went Up Anyway.
•Markus Grant•Season 1•Episode 5
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10:25
The Pentagon failed its financial audit for the eighth straight year. Auditors could not verify 64 cents of every dollar of budgetary resources, and the budget went up anyway. Meanwhile the same government grades SNAP to the second decimal.
Markus Grant runs the mechanism: cost-plus contracts that pay a fee on top of whatever gets spent, award fees paid out for acceptable work, and a fighter program marketed as jobs in all fifty states so every member of Congress can find theirs. One side of the ledger gets an error-rate target. The other gets a bigger check.
Key receipts: - 8: consecutive failed Pentagon audits, a disclaimer of opinion with 26 material weaknesses (DoD FY2025 audit) - 64 cents: of every dollar of budgetary resources that auditors could not verify - $900.6 billion enacted for fiscal 2026, $1.07 trillion proposed for fiscal 2027 - About $2.4 trillion: to contractors from 2020 to 2024, roughly 54% of Pentagon discretionary spending (Costs of War and Quincy Institute, July 2025) - 10.62%: the SNAP payment-error rate states are graded to
Receipts and case file: theranter.com/case-file/the-audit-they-dont-run Newsletter: newsletter.theranter.com Watch on YouTube: youtube.com/@TheRanterOfficial
SPEAKER_00
Here's what you have to understand about this country. Rate of fire, putting more rounds downrange faster than the other guy? That's the religion. We will never ever be outgunned. So in 1964, we outgunned ourselves. Somebody looked at a rifle that worked and said, you know what this needs? It needs a discount. They swapped in a cheaper, dirtier powder and never tested it in the actual rifle. Did it fire? It sure did. It fired so fast, hot, and filthy, it cooked itself shut. The gun that was designed to never stop firing is now leaving teenagers in the mud, ramming a cleaning rod down their own barrel while under fire. The guy in the tree line in sandals, carrying that cheaper, cruder rifle, keeps getting the only feature that matters. Click, click, boom. Nobody who approved that powder ever cleared a jam under fire. That math only works if the kid holding the rifle is worth nothing. Zero. That was 60 years ago. Today, its budget is $900 billion, a machine that flunks its own audit every year and gets a fatter check every time. They don't check the work, they just sign. I check the work. I'm Marcus Grant, so let's check the work. Last December, the Pentagon failed its financial audit for the eighth year running. And be careful with the word failed, because failed sounds normal. Failed sounds like the C minus, like a colonel forgot to carry the one. That's not what happened. Auditors looked at a trillion dollars in assets and said professionally, we can't tell you what this is. The phrase is disclaimer of opinion, which is accounting for, I am not putting my name on this. It reads like a hostage note in Excel. Most of what they own, most of what they spend, they can't vouch for. Danny, am I reading that right? Two-thirds of the budget, and the answer is a shrug on a letterhead? The audit found 26 material weaknesses. Material weaknesses sound like a chair with a wobbly leg. This is the Defense Department. A material weakness is a hole big enough to lose a carrier group in. And one of those holes is perfect. The F-35 Global Spare Parts Pool. They couldn't verify it exists. Not that the count was off, that the parts are there at all. The most expensive weapon program in human history has a spare parts pool that sits somewhere between a warehouse and Bigfoot. And before somebody says the Pentacon is complicated, listen. So is a casino, and it accounts for every chip on the floor because the one that loses track of the money stops being a casino. Complicated does not mean imaginary. There's a law that says pass a clean audit by 2028. Every year they stand up and recommit to 2028, which is what you say when the test is on the desk and the homework is still a concept. Twenty-four major agencies, one is never passed. Not once, and you're looking at it. This is where it stops being paperwork. The same week the books came back unreadable, Congress passed, and the president signed, a defense bill north of $900 billion. And don't make this a team sport because both parties handed it over. The House, both sides, the Senate, both sides. This country can't agree on lunch or bridges, but give the Pentagon a check nobody can read, and everybody finds their inside voice. Sixty-fifth year in a row. And next year's bill is already trying to get bigger. House appropriators just advanced the biggest defense funding bill ever. Over a trillion dollars. The books still don't close, and the check still grows. I'm a poet and I didn't know it. I came in thinking the Pentagon couldn't pass an audit. That was too generous. The audit is the ritual. The check is the religion, and the religion always gets funded. The Pentagon can't account for most of what they spend. Fine, I'll do it for them. Boeing sold the Air Force a soap dispenser for the C-17 cargo plane and charged about 8,000% over a commercial one. That same dispenser in a gas station bathroom runs about 30 bucks. Same soap, same hand, same job. The Pentagon's own inspector general caught it as part of nearly a million in overcharges. When you hear a number like that, 8,000%, you wait for the rest of the story, right? The correction, the conviction? Or maybe somebody got fired. Yeah, well, that never comes. There's nothing to correct. That number, that's the business plan. Boeing doesn't make real money selling the Air Force the plane. It makes the real money for decades after, selling the parts. Because once you own that C-17, it's yours, baby. Only Boeing sells the parts that fit it. You can't shop around a soap dispenser for a military cargo plane, so the markup is the point. Sell the plane once, sell the soap and the dispenser forever. That model has a bigger name on the flagship programs, the jets, the ships, the places where the real money lives. It's called Cost Plus. I know, cost plus sounds like accounting jargon because the people who named it want you to stop listening right now. So don't. The contractor spends, the taxpayer pays it back, and then the taxpayer tips them for the trouble. On any job you've ever worked, you blow the budget and you eat it. That's the only reason the budget exists. The pain is yours, so you better behave. Cost plus deletes the pain. Every dollar comes back no matter how high it climbs. They installed a meter and then they just walked away from it. There's an OG version of this where the fee is a flat cut of the spend. Spend a million, pocket a hundred grand. Spend two, pocket two hundred. The more you waste, the more you make. Well, you know what? The government looked into that one, saw exactly where it ends, and they banned it in 1940. We've known for a better part of a century that paying a man more for spending more is absolutely insane. And yet we kept the one where the taxpayer still eats the overrun. That's the reform we picked? Really? There's supposed to be a backstop. Most of these contracts carry a performance bonus. Hit the targets on time, on spec, earn the bonus, right? That's how it is. Sounds fair. Well, guess what? That's not how it is. So the GAO went and looked. The Pentagon had handed out billions in bonuses to contractors who either exceeded the target, hit the target, or missed it completely. Paying for performance to programs that were not performing. Turns out everybody started at 100, and you only lost points if somebody could name a specific screw up on the record, and you know that almost never happens. If you hired this guy as a contractor, you would fire him in a week. You'd be telling the story to your buddies for the rest of your life. The Pentagon signs him up for 30 years. The silent part we don't know or don't think about or don't want to think about is the names of these defense companies are already sitting in our retirement's 401ks and mine. I'm gonna keep chasing this rabbit and see what I can find. I followed the rabbit all the way down, and at the bottom the Queen of Hearts is screaming, off with their heads. For one second, you understand her completely. But I can't do that. So here's what the Cheshire cat showed me instead. First, a weapon system so uncancelable that even Dick Cheney couldn't kill it. The V twenty two Osprey. 1989, Cheney runs the entire building, looks at the price and says stop. Congress funds it anyway. He tries again in nineteen ninety, ninety one, ninety two. Four years the man in charge says stops and the money keeps moving. They even barred the Pentagon from spending a dollar to study a cheaper replacement. You can't kill it, can't replace it, you can only keep buying it. The Osprey runs through Fort Worth in Philadelphia, and when Cheney moved to end it, a delegation walked in to save it. Two parties, one purchase order. That's the old one. Now the cat points are the newest, the latest and greatest, the F thirty five, and Lockheed brags it puts jobs in all fifty states. Spread the work wide enough and canceling the thing is a layoff notice in everyone's backyard. The system is bigger than the man who runs it. Look at this shirt. Flaming the stains on one tea party? Which one? I couldn't tell you. Boston, Wonderland, the movement? Well they all run together down here. Now forget the trillion dollar budget. Let's look down at Snap's hundred billion. If you get food help and you can work, here's the deal as of this year. Twenty hours a week of worker training and you document every one. Miss the paperwork, not the work, not the training, just the paperwork, and the food can stop after three months. The states get graded on an air rate tracked to two decimal places. Two decimal places for fucking groceries. Now that Snap is accounted for, let's look up at the Pentagon. It failed its audit for the eighth year running and couldn't form an opinion on most of its budget. No penalty, no three month clock, a bigger budget in the morning. Same two words on both files. Program integrity. Down at the tray, it has teeth. Up at the Pentagon, oh we have manners. Both parties built this. Sixty five years of bills. They count the hungry family to the decimal and let the Pentagon answer in the fog. Accountability always points down, and we're the floor. For years we've shamed Walmart for paying so little the taxpayers end up paying the workers' groceries. We built the same deal for the people we send to war, and we made it worse. A quarter of the people in uniform can't reliably feed their own families. When they apply for food stamps, the government counts their housing allowances income and rules them out. So they line up at the food bank. The food bank at the base. There is a food pantry at Moody Air Force Base, and an airman who wants to use it goes to his first sergeant. The richest military on earth can put the chain of command between a soldier and a bag of groceries. The same taxpayer funds the trillion dollar budget and feeds the soldier the budget for God. You know that bumper sticker, the one with dreams of an Air Force holding a bake sale to buy the bomber? Well, we've got the bake sale now. It's just not for the bomber. It's so the goddamn soldier can eat. Remember the powder? The only way that math ever worked was to price a soldier at zero. This is the same math. The hungry kid, the enlisted family, the parent filing a form for groceries while a weapon program survived another fail audit. All of this priced low enough for the budget to balance. Sixty years apart. Zero. I'm Marcus, and we audit the hungry.