More than 80 percent of the Defense Department’s Afghanistan reconstruction contracts are vulnerable to putting U.S. taxpayer money into enemy coffers, a government watchdog says in a new report.

According to the Special Inspector General for Afghanistan Reconstruction (SIGAR), a poorly written section of the defense authorization bill means that “millions of contracting dollars could be diverted to forces seeking to harm U.S. military and civilian personnel and derail the multi-billion dollar reconstruction effort.”

“The possibility that taxpayer money could be supporting the insurgency is alarming and demands immediate action,” said John Sopko, the SIGAR. “Every effort should be made to implement stronger controls that protect our troops and ensure the success of our reconstruction efforts.”

The section of the law in question gives DOD power to keep funds from companies who associate with enemy elements. But, SIGAR said, the rule “only applies to contacts more than $100,000 -- but roughly 80 percent of contracts awarded in Afghanistan fall below this threshold.”

SIGAR also found that contracting agencies simply do not know who their subcontractors are, on many projects. That's a typical problem across the federal government for oversight officials, who often must rely on prime contractors, often small overseas companies, to identify their subcontractors adequately.

Spoko has turned up the heat on the federal government since taking the position last summer. On Wednesday, he took a moment to boast, in House testimony, that his office has produced more investigations in the last 3 months than were completed in the previous nine months. But inspector generals can effect change only if the government heeds their recommendations, he argued.

“SIGAR currently has 73 open recommendations. If all of them were accepted, the U.S. government could potentially save about $450 million,” he said.

Sopko named several factors contributing to wasted U.S. taxpayer money in Afghanistan, including poor planning, security, and monitoring.

Additionally, the U.S. has failed to establish an anti-corruption plan across the spectrum U.S. efforts in Afghanistan.

“More than two years ago, SIGAR recommended that the United States develop an integrated anti-corruption strategy. Although the U.S. Embassy in Kabul produced a draft strategy, it was not adopted,” he said.

There is plenty of money to keep watch over. Congress has appropriated nearly $93 billion for Afghanistan reconstruction since 2002, Sopko said. Last fiscal year, Central Command’s Joint Theater Support Contracting Command “awarded 9,733 contracts, valued at approximately $1.7 billion,” according to the SIGAR report.

To keep U.S. money out of enemy hands, CENTCOM now publishes a list of suspect companies -- so far, just five companies -- but Sopko’s team found contracting officers aren’t checking the list.

UPDATE: Following the release of the SIGAR report, Sens. Kelly Ayotte, R-NH, and Richard Blumenthal, D-Conn., introduced the “Never Contract With The Enemy” bill, on Thursday. “American taxpayer dollars should never benefit our enemies,” said Ayotte, who co-authored the original provision with former Sen. Scott Brown, R-Mass. The new language fixes the problem, the senators said in a statement, “by allowing officials across government to more expeditiously stop contracts that have been found to benefit our enemies.”

The Defense Department underestimated the cost of the Afghanistan war in fiscal 2013 by as much as $10 billion, the Pentagon’s top budget official said on Wednesday, and lacking clarity on the number of troops that will remain in the country next year, DOD will not submit a fiscal 2014 budget request for the war to Congress until next month.

The budget blunder, combined with sequestration’s mandated cuts and the fact that Congress has not passed an FY13 appropriations bill, posed yet another challenge for defense officials crafting the FY14 Defense Department spending request, which was released on Wednesday.

“I can’t believe how many things we’re trying to do right now,” Comptroller Robert Hale said.

Pentagon documents show DOD requesting $88 billion for the Overseas Contingency Operations (OCO) account, formerly known as the Global War on Terror. But the documents caution the request is “a placeholder pending submission of a final OCO request.”

“Here there's a simple story about fiscal '14 OCO budget: We don't have one yet,” Hale said.

Pentagon officials have pledged to protect the war from sequestration cuts, which means DOD must cut more money from the military’s so-called “base” budget.

Hale said that for fiscal 2013, which has been funded through a series of continuing resolutions passed since September, the Pentagon estimates coming up short in Afghanistan by $7 to 10 billion, with half of the fiscal year already passed. So DOD will pull funds from the base budget to make up that loss in the final six months to go, he said.  With sequestration, the total shorfall to DOD’s active base FY13 operating budget adds up to between $22 billion and $25 billion.

“We are spending more in our OCO budget than we anticipated two years ago when it was put together, both through the higher operating tempo and higher transportation costs,” Hale said at the Pentagon.

Looking ahead, President Obama requested $526.6 billion for all FY14 defense spending, a 0.9 percent drop from DOD's current estimates. But those are only a rough estimates.

The budget request for the Afghanistan war has always been a bit of a guessing game based on the number of U.S. troops deployed during each fiscal year. This is the second year in a row that the Defense Department has come up short.

Last summer, DOD asked Congress for permission to shift $8 billion in FY12 funds to cover unexpected costs across the department, including $770 million to pay for higher-than-anticipated gas prices related to the war. DOD said costs skyrocketed also because Pakistan closed the border into Afghanistan for NATO war supplies, forcing the military to execute a costly end-around supply route through the Northern Distribution Network.  

The new request assumes “for pricing only” that the 34,000 troops President Obama said he would withdraw from Afghanistan next year will not be pulled until the end of fiscal 2014, a year from September.

For the second year in a row, President Obama will ask Congress's permission to close military bases around the world, but this time the Defense Department has budgeted $2.4 billion for the process to show it's serious.

The Pentagon's fiscal 2014 defense spending request, which Defense Secretary Chuck Hagel will announce Wednesday afternoon, will ask Congress for a Base Realignment and Closure (BRAC) round in 2015, a defense official confirms to the E-Ring, with funds for the downsizing spread out over the five years.

Pentagon officials seeking to meet defense spending cuts required by the Budget Control Act asked Congress last year to consider two BRAC rounds in future years. But the Pentagon did not request any funds for the process, and members of Congress flatly rejected the proposal by arguing that closing military installations requires significant expenses.  

This year, the Defense Department bills its $526.6 billion defense spending request as "good stewardship of taxpayer dollars." The Obama administration's fiscal 2014 request would cut $150 billion over the next 10 years: $50 billion in the first five years, and $100 billion in the remainder.

The specific funding request for a BRAC round is meant to show Congress that the Pentagon is serious about getting started closing excess facilities.

"This is real. Very real," a senior defense official told the E-Ring.

The Pentagon likely will have a tough fight with Capitol Hill. BRAC rounds are incredibly unpopular for members of Congress in districts that rely on the economic engines military bases can provide. In 2012, the BRAC proposal was swatted away by Republican and Democratic authorizers.

Defense Secretary Leon Panetta's request to close or shrink several Air National Guard units caused such an uproar with members representing those districts that Panetta quickly rescinded the request.

Despite an active threat of nuclear war in East Asia, the top U.S. commander in the Pacific said on Tuesday that he has not talked to his Chinese military counterparts during the ongoing North Korean standoff.

The revelation, made during Tuesday’s Senate Armed Services Committee hearing, exposes just how broken the U.S.-China military relationship remains despite the Obama administration’s efforts to build stronger ties with Beijing dating to 2009.

Relations between the U.S. military and China’s People’s Liberation Army have thawed in recent years. But U.S. defense leaders and commanders are frustrated that China is not doing more to help calm Pyongyang.

Sen. John McCain, R-Ariz., asked U.S. Pacific Command’s Adm. Samuel Locklear if he thought the same way.

“I think that they could do more,” the four-star commander replied.

Then Sen. Carl Levin, D-Mich., asked, “Have you had any conversations with your military counterparts in China in the last couple of weeks?” Locklear, the top commander in Asia, replied,  “I have not.”

It was not until much later in the hearing that Sen. Kelly Ayotte, R-NH, revived the issue, saying Locklear’s answer “troubled me.”

“It seems to me that we need to be, I would think, clearer with China as to what our expectations are because this is a danger to them,” Ayotte said. “And, also, if there is a provocation between North and South Korea and we are required to engage, or North Korea engages us, that is to the detriment of China's security, as well.”

“So I'm wondering why you haven't had those conversations.”

Locklear, who does not have a direct counterpart in the PLA chain-of-command, noted that Defense Secretary Chuck Hagel was having conversations with China on behalf of the Pentagon. Hagel discussed North Korea with Chinese Minister of National Defense General Chang Wanquan on April 2. Joint Chiefs Chairman Martin Dempsey spoke in early March with Gen. Fang Fenghui, chief of the General Staff of the People's Liberation Army.  

“I believe that, over time, we'll progress to a state where the PACOM commander can talk to the chief of defense or the chairman can talk there in a real time. We're not there yet.”

Indeed, even the top of the chain is barely talking.

“We're not aware of any recent mil-to-mil contacts with China on DPRK,” said Col. David Lapan, spokesman for Chairman Dempsey. Dempsey is scheduled to visit China later this month.

Hagel’s team also said they knew of no other “high-level interaction” on North Korea. Col. Cathy Wilkinson, Defense Department spokeswoman, said “routine” military coordination has continued “through diplomatic channels.”

Locklear later said he has a hotline with Beijing for crises but not the kind of military-to-military relationships the U.S. enjoys with China’s neighbors.

“But as I've said to my Chinese counterparts, we need to get better at this, because I don't have the same relationship I have with maybe the chief of defense of Japan or of Korea or of the Philippines, where we understand each other. We meet routinely. We talk through security issues. And we need to move that forward with our relationship with China,” he said.

“It's nice to have relationships before the crisis,” replied Sen. Angus King, I-Maine.

Gen. James Thurman, U.S. Forces Korea commander, was supposed to testify alongside Locklear about the North Korea situation, but he skipped the trip to Washington in order to stay on duty in South Korea.

Levin, whose question put Locklear on the hot seat, closed the hearing by throwing the admiral a lifeline and asking if he could try to reach out and touch the Chinese.

“It could add a very important element if this military- to-military communication occurred with your Chinese counterpart,” Levin said.

“Yes, sir.”

“So that's something you could take on?”

“I will explore it. Yes, sir.”

Climate change may not be the biggest security threat to the Pacific region in the long term. But it may be the biggest threat in the “long, long term.”

That’s the clarification offered on Tuesday by Adm. Samuel Locklear, Pacific Command commander, to a Boston Globe interview he gave last month.

As the Globe wrote it, Locklear was asked during a Boston visit in March, “What is the biggest long-term security threat in the Pacific region?”

“Significant upheaval related to the warming planet [Locklear said] ‘is probably the most likely thing that is going to happen…that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’’’

With his first question in Tuesday’s Armed Services Committee hearing, ranking Republican Sen. Jim Inhofe, of Oklahoma, one of the Senate’s staunchest climate change skeptics, asked Locklear “what you meant by that.”

“A lot of the people who are trying to…use your statement are the very people who think we're spending too much money on defense and that money should be spent in other areas,” Inhofe said. “And some of the environmental extremists don't really believe we need to have that strong of a military, as strong as we have right now.”

Locklear, right on cue, thanked the senior senator for the opportunity to clarify his remarks.

“I gave a hundred or so interviews over the last year. And during those interviews, I can assure the committee that I always start by talking about the most pressing military threats that we have,” Locklear said, listing North Korea and China.  

“And in this particular case, I did the same,” Locklear said, of the Globe interview. “Then we started to talk about the long term -- the long, long term, and what are the implications of it.”

Locklear then explained that Asia is very populous, most people there live near water, and many people have died from natural disasters in recent years, some of which can be attributed to climate change.

At that point, Inhofe quickly cut off Locklear, unsatisfied at the admiral’s answer.

“OK, I -- sir, I'm going to interrupt you here,” Inhofe said, “because now you've used up half my time, and we didn't get right around to -- is it safe to say that in the event that this -- that the climate is changing -- which so many of the scientists disagree with -- in fact, when the Boston Globe, coming out of Massachusetts, made a statement, perhaps arguably one of the top scientists in the country, Richard Lindzen, also from Massachusetts, MIT, said that was laughable.”

Inhofe eventually came back to his own point and asked the admiral if it would be “a more secure world” if the U.S. could provide its Pacific allies with energy.

“Absolutely,” Locklear replied to Inhofe, who moved on to his second national security concern of the day.

“Yeah. OK. Let me say something about China.”

There are few populous cities in the world outside of Israel that need the protection from a near-constant threat of short-range rockets and artillery that Iron Dome was designed to provide. Seoul is one of those cities.

Nearly 11 million people live in South Korea’s capital, roughly 35 miles from the Demilitarized Zone. North Korea is threatening to make it rain artillery and missiles on its sworn enemy. And Israel is desperate to find a buyer for the incredibly expensive missile defense system. South Korea sure could use Iron Dome right about now.

But a series of blown multibillion-dollar deals with Israel has left South Korea instead rushing to beef up the patchwork network of American and Korean missile defenses, including Patriot missile batteries on land and Aegis-equipped destroyers deployed at sea.

That’s not all bad, say some analysts who question whether Iron Dome would be right for Seoul at all. North Korea is not Palestine. Pyongyang’s arsenals are so stocked and varied that it would take far too many Iron Dome batteries to have any real effect on protecting the city, other than for a few, select high-value targets. Even then, the system may be too expensive to justify the investment.

But South Korea has tried. Since 2011, military officials have sought to acquire Iron Dome and hoped that Israel would in turn buy South Korean fighter jets, ships, helicopters parts, or more. Instead, Seoul has lost out to better or cheaper competitors.

Last year, Iron Dome showed off its worth by knocking down up to 80 percent of incoming rockets, the Israel Defense Force claimed. That figure has been disputed by some outside researches, but Pentagon officials publicly stand by the IDF’s hit rate. Iron Dome is a hit.

It is also crazy expensive.

"The economics of a missile exchange do not tend to favor the defender," says James Hasik, a defense industry consultant and fellow at the University of Texas at Austin. For intercontinental ballistic missiles, he explained, it is nearly as expensive to build the ICBM as it is to build the missile that is supposed to shoot it down. But the cost of artillery shells and short-range rockets is pocket change for national militaries. In contrast, each Iron Dome battery built to shoot them down runs an estimated $50 million. Iron Dome interceptor rockets cost between $50,000 and $80,000, according to various public estimates.

Each.

South Korea would have to choose carefully what it wanted Iron Dome to protect, and it would likely still run out of interceptors long before North Korea expended its arsenal.

North Korea has too many attack options, including fast-moving Scud missiles, and could overwhelm Iron Dome easily, Hasik contends. North Korea may be more likely to fire off its artillery batteries, which are not very mobile and which therefore instantly become easy targets once they have been detected. Yet, even if a U.S.-ROK response were able to destroy North Korea’s artillery quickly -- as famously happened in Iraq -- Seoul would still be hit, one way or another. That makes Iron Dome appealing if there are sites South Korea wants to protect long enough for allied forces to silence incoming artillery.

The U.S. has financed the development of Iron Dome for Israel, spending roughly $270 million since 2010 and commiting more than $600 million in the future. Pentagon leaders have visited Iron Dome sites in Israel and are impressed. But because the U.S. did not build the system, it cannot hand it over to South Korea.

In 2011, South Korea’s top weapons buyer went to Israel looking for better ways to defend against North Korean rockets and missiles. He was looking specifically at Iron Dome, built by Rafael Advanced Systems of Israel.

In January 2012, South Korea first offered to buy Iron Dome, if Israel reciprocated by buying South Korean-made fighter jets. But Israel favored jets made in Italy.  In November, Seoul and Israel were reportedly considering a new deal for South Korean ships instead of aircraft.  Israel wants new ships the can hold its advanced missile systems, but no deal has been announced.

For its part, Israel is trying to sell Iron Dome. In February, India rejected an Israeli offer to sell the system, calling it too expensive and opting to develop its own missile defenses.

For now, Seoul has other options. Last year, the U.S. and South Korea announced the new Korean Air and Missile Defense (KAMD), an agreement by which the U.S. would protect South Korea and shoot down any North Korean missiles either by using Aegis systems on destroyers at sea or the Patriot system on land.

South Korea, meanwhile, has until 2020 to purchase its share of KAMD defenses. Last October, however, the U.S. lifted several restrictions it had placed on the distance and payload size of South Korea’s current missile arsenal. Seoul previously was restricted to having missiles that could travel only 186 miles -- an effort to not look like the aggressor against Pyongyang. Now, the ROK can have missiles that reach 500 miles, or carry larger payloads. The move also allows Seoul to fly drones farther north, if needed, and there are no more restrictions on the distance of South Korea’s cruise missiles, which are considered highly accurate.

The E-Ring asked Pentagon and Army officials what Seoul’s best options are, if not Iron Dome.

“Acquiring new systems, such as Iron Dome, are a sovereign decision of the Republic of Korea government,” said a U.S. defense official, speaking on condition of anonymity to discuss weapons systems, “and South Korea is actively taking steps to enhance its own air and missile defense systems, which include sea- and land-based sensors.”

“We have been consulting closely with our strong South Korean ally about how they can upgrade their missile defense capabilities. The U.S. will continue to assist in determining what systems are appropriate for meeting their requirements.”

Convening authorities, beware. Defense Secretary Chuck Hagel soon will ask Congress to strip from the military justice system one of its most powerful and most controversial features: the ability for commanding officers to reduce or eliminate criminal convictions and sentences.

In a statement issued Monday, Hagel said he has asked the Pentagon’s top lawyers to prepare legislation to submit to Congress that would eliminate the “convening authority” power to reduce punishments in all cases, “except for certain minor offenses that would not ordinarily warrant trial by court-martial.”

“The changes have the full support of the Joint Chiefs of Staff and the service secretaries,” Hagel said.

The controversy over sentence reductions is not new, but until recently has been relegated mostly to military legal circles. But members of Congress exploded after hearing in March that a three-star, Lt. Gen. Craig Franklin, overturned the sexual assault conviction of Lt. Col. James Wilkerson in Aviano Air Base, in Italy.

In the military system, the move was completely legal and cannot be appealed to any higher authority, including Hagel, the chairman of the Joint Chiefs of Staff, or President Obama. By eliminating the power to reduce convictions and sentences altogether, Hagel’s measure, if adopted in Congress, would eliminate the need for appeal.

Military justice experts say the power of the convening authority to reduce punishments is intended to be used as a discretionary tool of discipline within the ranks. But Franklin’s decision widely was panned.

SIGAR strikes again. The top U.S. watchdog overseeing how taxpayer money is being spent rebuilding Afghanistan after a decade at war has found no shortage of problems that have arisen from mixing billions of American dollars with “Afghan good enough” oversight. Now in an April 4 letter, John Sopko, the Special Inspector General for Afghan Reconstruction, blasted the U.S. Army Corps of Engineers for knowingly continuing to build more than 1,000 structures for the Afghan army that are virtual firetraps.

Sopko says in the letter to Lt. Gen. Thomas Bostick, commanding general of the Corps, that he has issued field commanders an “urgent safety alert” because the Corps, it claims, has decided to keep building Afghan buildings “in a manner that can pose a serious fire and life safety risk. More than 1,000 structures in southern Afghanistan alone could be at risk due to construction with non-compliant foam insulation and thermal barrier systems.”

The buildings in question are known as K-span structures, the familiar arched metal buildings that dot military installations across the country. Three of buildings have caught fire while still under construction, prompting Sopko to recommend contractors station a fire watcher on construction sites in between work shifts.

The Corps is aware that the materials do not meet international standards, Sopko notes in his letter, but instead of halting construction or finding better materials, it has told contractors to “proceed with the materials that have been previously approved and that are currently on site.”

“We are requesting you to immediately reconsider the decision to continue using IBC non-compliant insulation foam and thermal barrier systems for K-Span facilities currently under construction. Please report to us once this has been done,” Sopko wrote.

Sopko said his office has started a full investigation and copied his letter to Central Command’s Gen. Lloyd Austin and ISAF commander Gen. Joseph Dunford.