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RELEASE: Warren, Khanna Call for Independent Watchdog Investigation of Pentagon Funneling Hundreds of Millions of Dollars of COVID-19 CARES Act Funds to Defense Contractors

September 25, 2020
Press Release
“Instead of addressing the urgent needs of a pandemic that has killed over 200,000 Americans, it appears DoD used taxpayer money meant to protect lives from COVID-19 to pad the pockets of defense contractors” “The reported misuse by DoD of federal funds…is inconsistent with the will of Congress and may be illegal”

Washington, DC – Sen. Elizabeth Warren (D-MA), Member of Senate Armed Services Committee (SASC), and Rep. Ro Khanna (D-CA), Member of the House Armed Services and Oversight and Reform Committees, formally requested that the Department of Defense (DoD) Inspector General (IG) investigate reports that the Pentagon redirected hundreds of millions of dollars of funds meant for COVID-19 response via the Defense Production Act (DPA) to defense contractors for “jet engine parts, body armor and dress uniforms.” 

“The reported misuse by DoD of federal funds meant for the response to the deadly pandemic plaguing our country is inconsistent with the will of Congress and may be illegal,” wrote the lawmakers.

Congress allocated $1 billion in funds under the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act) for DoD to manufacture personal protective equipment and other supplies to protect Americans from COVID-19. Not only did DoD reportedly redirect the vast majority of these funds to defense contractors for projects unrelated to combating the pandemic, some defense firms effectively received a double bailout because government data shows they also received loans through the Paycheck Protection Program (PPP), another relief package meant for struggling small businesses. 

In fact, some of these companies may have even benefitted from a third bailout through DoD’s expanded issuance of “progress payments,” most of which went to the Department’s five largest defense contractors. The lawmakers asked the IG to also review and determine whether these expenditures were needlessly duplicative.

A New York Times review of the Trump Administration’s use of the DPA found that an overwhelming majority had nothing to do with production of medical equipment or addressing the nation’s massive supply shortages due to the COVID-10 pandemic. “Instead of addressing the urgent needs of a pandemic that has killed over 200,000 Americans, it appears DoD used taxpayer money meant to protect lives from COVID-19 to pad the pockets of defense contractors,” wrote the lawmakers. 

The full text of the letter is available online here.

 

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About the Office

Congressman Khanna represents the 17th District of California, which covers communities in Silicon Valley. Visit his website at khanna.house.gov. Follow him on Facebook, Instagram and Twitter @RepRoKhanna.