WASHINGTON ― With Congress on track to hit $100 billion in aid this year to help Ukraine repel Russia, the Pentagon’s law enforcement agency is watching for signs of fraud and abuse in the contracts being awarded.
The Defense Criminal Investigative Service’s Ukraine focus is on the Pentagon’s many speedy contracting actions and on the potential black market diversion of U.S. aid, said James Ives, principal deputy director for DCIS, which falls under the Department of Defense Office of Inspector General. No contracting fraud has become public so far.
“The risk is very real by virtue of the fact that we’re dealing with such an incredible volume of items, many that have warfighting capabilities, and we’re doing it very quickly,” Ives said in an interview. “Any time where you see accelerated efforts of this nature, there’s potential for all sorts of activities that should be of concern.”
The Pentagon said this month it’s so far inked Ukraine-related contracts worth $9 billion, with more coming. Of that, $2.7 billion falls under the $9.3 billion Congress approved for the Pentagon to buy new defense items for Ukraine, and another $3.4 billion is part the $6.7 billion the Pentagon committed to replace materiel sent to Ukraine from its stocks.
The Defense Department, according to a recent fact sheet, “is working closely with industry to produce these systems ... as quickly as possible,” using undefinitized contract actions, indefinite delivery, indefinite quantity contracts, and “other tools that accelerate acquisition timelines.”
In an effort to head off criminal exploitation in activities related to Ukraine assistance, Ives in September led a team of DCIS investigators on a trip to Poland, a hub for the transfer of foreign military equipment and supplies to the Ukrainian government. The visit was meant to spread the word that fraud, abuse and diversions should be reported.
“A good deal of our efforts right now are making sure we’re out and about, letting folks know that when these facts come to the government’s attention, investigative agencies need to get involved,” Ives said. “It’s an effort to remind folks that although we understand there’s a need to engage in this accelerated procurement that’s going on, there’s a need to bake oversight into the process.”
Potential reports could come from the Pentagon workforce, which Ives called the inspector general’s “eyes and ears on the ground,” as well as senior leaders. Meanwhile, he said, investigators received assurances from the Ukrainian government that its officials take potential weapons diversion seriously and, along with the U.S. State Department and military officials, will report any instances to the watchdog agency.
“They fully understand that accountability is expected,” Ives said of Ukrainian officials. “They obviously have a vested interest in ensuring they have the correct processes in place ... and they’re certainly aware that any issues need to be brought to the [U.S.] government’s attention.”
Ives said DCIS coordinates with the State Department and other U.S. law enforcement agencies, and it also maintains “a really strong network of international partners within the law enforcement community.”
While the Defense and State departments said they haven’t found credible evidence of diversion of U.S.-provided weapons, both say they are taking steps to safeguard those weapons.
Small teams with the defense attache office within the U.S. Embassy in Ukraine have conducted inspections, which include keeping records of aid before it’s handed over and then tracking it from border logistics hubs to the front line, a senior defense official told reporters in October. The Defense Department is also training Ukrainians to provide data from areas where U.S. teams cannot go.
NBC reported the Defense Department is working to pick up the pace of weapons checks before January, when there will be more pressure from the incoming House Republican majority about how U.S. weapons are distributed and used. Rep. Kevin McCarthy, R-Calif., in line to become House speaker, has said Republicans will not write a “blank check” for Ukraine.
Asked about the political dynamics, Ives told Defense News that DCIS is “apolitical.”
“The bottom line is where there is money, there’s potentially fraud. So given the extensive amount of taxpayer dollars that are going towards this, we are naturally going to prioritize oversight,” he said.
When it comes to potential diversions, Ives said the inspector general’s office is particularly concerned about “weapons systems that are portable but pack a punch,” like man-portable air-defense systems, which “tend to be in demand regardless of the actor.” Any sort of U.S. technology will be “a constant target given that our nation deploys the most advanced weapons systems,” he added.
While the Ukraine situation is unique, DCIS plans to apply lessons from Iraq and Afghanistan — where the Pentagon was doing much of its own contracting — when it comes to the potential for fraud and abuse at any stage of contracting.
“High-value, accelerated contracting can lead to significant fraud, waste and abuse, and oversight is absolutely paramount when it comes to these types of situations,” Ives said. “We certainly saw in Afghanistan and Iraq that some of the most significant fraud schemes we’ve ever seen came in the early stages of those engagements, where oversight wasn’t a prime consideration. That lesson, I believe, has been learned.”
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.