Zakheim talks about the problems of large bureaucracies, missing money at the Pentagon, and Donald Rumsfeld’s forgotten legacy.

Dov Zakheim: Well, you know, the DoD is a huge bureaucracy. And we have a culture where the . . . It’s called a “gotcha” culture, where anytime a bureaucrat makes a mistake, a light is shot . . . the light shines on them, and Congress investigates them, and the General Accountability Office goes after them. And so there’s this tremendous risk aversion. So you see government doing two things. First, if you ever look at a government document, it’s always in the passive verb form. Things have happened. Mistakes were made. Who made them? “Oh I don’t know how made them. They were made.” Because that way no one has accountability and responsibility. If people were given a little more slack to make mistakes, then they would probably be a lot more accountable. Well take it to the next level. Do you wanna reform anything? Reform means change. Reforming means dynamism. Reform means that you might be looked at in a way that, you know . . . Before you could hide behind some piece of paper. So the bureaucracy hates reform. When Rumsfeld came in, he wanted to transform the Pentagon. And one of the things he did was ask me to change the way we handled our financial management because nobody paid much attention to it. And one of the things I found was the people who worked in that area were themselves so dismissive of their work that they were 9 to 5ers. They had given up. It was almost like, well, if they were working there, it’s probably because they weren’t good enough. Well it wasn’t true. Some of them were very, very good. We made some changes. For instance, we had a problem that we couldn’t account for all our transactions sometimes. There was a zip code wrong, whatever it might be. But it didn’t fit to the point of 2.5 trillion dollars. That’s a lot of transactions that couldn’t be accounted for. I started a process. Now I think the problem isn’t measured in a few millions. So we’ve gotten rid of 99.9% of the problem. It took a lot of dedicated people to do that. But all of a sudden they felt that, you know, I was paying attention. And there was the Undersecretary; but more important, the Secretary of Defense cared about what they were doing. And for a bureaucrat to recognize that it’s not that somebody wants to criticize them, but somebody cares about what they’re doing, they’re gonna respond differently.

Recorded on: 7/2/07