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Hey, this is Lee Fang. I'm your host of System Update, coming to you live from a very foggy San Francisco. Glenn Greenwald is out this week. 

Last night, Trump gave his fifth State of the Union address. The president doubled down on tariffs, called for an end to the war in Ukraine, and touted his many executive orders, especially on DEI. And yes, there were moments of theatrics between Trump and the Democrats in the audience. 

But Trump did something special that I think deserves greater scrutiny. Unlike recent administrations, including his own, he dedicated a big part of his speech to his quest to root out wasteful spending. Let's watch a clip: 

Video. Donald Trump, Joint Address to Congress. March 4, 2025.

This is an important topic and one that really cuts across ideological and partisan lines. Or at least it should. Corruption is a soul-sucking force not only because it bloats government debt and deficits. We all suffer from waste – for every fraudulent contract, for every misallocated dollar, that's a loss of resources that could have been spent making America more educated, more secure, healthy, and prepared for the future. It's also a problem that fuels alienation. We lose faith in our elected officials, and our entire system of governance, when we can't count on basic accountability for how our tax dollars are spent. 

Where I live, in San Francisco, the government has one of the largest per capita local budgets in the world, yet problems never seem to go away, no matter how much money gets spent, housing gets more expensive, there are rampant overdose deaths, a growing homeless population despite the highest level of spending on homeless outreach programs in the nation, out of control property crime, empty storefronts, and programs that seem like a parody of municipal waste. 

$1.7 million spent building a single toilet in Noe Valley? (The New York Times. January 24, 2024) $2 billion on a small expansion of the Muni subway, which was over budget, which blew through deadlines, and is now shutting down just after opening because of faulty construction? And the more the city spends, the more questions are raised as NGO and private contractors keep getting busted with their hands in the cookie jar – we've had repeated FBI raids of city workers and city contractors, scandal after scandal about missing funds and kickback schemes. The problems seem endless and given that so many Democratic leaders – from Nancy Pelosi to Kamala Harris to Gavin Newsom – got their political start in this city, it’s no wonder that many Americans question whether these Californians are fit to lead. (The San Francisco Standard. April 12, 2024.)

But as bad as the problems of San Francisco have become, the city pales in comparison to the federal government. The Government Accountability Office estimated that between 2018 and 2022, taxpayers lost somewhere between $233 billion and $521 billion due to fraud. 

Much of that money was lost during the pandemic, when a gusher of nearly $2 trillion went out with little accountability. Both Democrats and Republicans are to blame for the lack of oversight. 

But this is not a phenomenon that is limited to the emergency actions taken around COVID-19, not even close. The most pernicious, systemic fraud can be found throughout the system, especially in health care and defense spending. 

President Donald Trump, to his credit, has made it a focal point of his administration. His new Department of Government Efficiency, also known as DOGE, helmed in part by Elon Musk, has rapidly deployed in agency after agency, slashing private contracts and cutting the workforce. In particular, he has moved to scale down the entire USAID budget. 

Like a lot of the Trump administration, it's a mix of good and bad, of bold action that no other administration would take, alongside reckless actions that could do real harm. In many cases, they're missing the window of opportunity to go after real waste embedded in our system and have instead cut self-funding agencies like the CFPB. 

First, let's talk a little bit about the good around USAID cuts. I've reported for years on USAID money going to groups that work to overthrow foreign governments, undermine democratic elections, and indeed, censor even Americans over bogus claims of "misinformation." Congressional Democrats have claimed that USAID simply, in the words of Senator Chris Murphy, "supports freedom fighters" all over the globe. 

That reality, however, is much murkier. USAID has funded the Zinc Network, an anti-disinformation contractor that has targeted reporter Max Blumenthal, politician Vivek Ramaswamy, and Congressman Andy Biggs. USAID also funded a pesticide industry public relations effort known as v-Fluence, which dug up dirt about American food journalists such as Michael Pollan and Mark Bittman. But most troubling, the foreign assistance agency has financed a network of groups in Ukraine that have spread unsubstantiated claims that Americans in favor of peace are part of a dangerous misinformation network tied to the Kremlin. 

The controversial agency provides backdoor ways for the American government to finance propaganda against American citizens. 

In Ukraine, USAID, through its contractor Internews, supports a network of social media-focused news outlets, including the New Voice of Ukraine, VoxUkraine, Detector Media, and the Institute of Mass Information. 

These news outlets have produced a series of videos and reports targeting economist Jeffrey Sachs, commentator Tucker Carlson, journalist Glenn Greenwald, and Professor John Mearsheimer, as figures within a "network of Russian propaganda".

(Lee Fang. Substack. February 4, 2025.)

In other words, American taxpayers have been funding a defamatory smear campaign against other American citizens, all in order to build out support for another forever war. 

But let's not forget, USAID also helps administer global health programs which have been widely touted for saving millions of lives. USAID helps administer PEPFAR, a program to distribute HIV AIDS medications, and the agency also funds the distribution of medicine and preventative care for malaria, polio, tuberculosis, and a variety of programs for maternal and child health care in developing countries. 

There's a pause in these programs as the administration reviews them, but it seems clear that there's a real risk that they may be cut. These programs might not be perfect, but they've generally impacted the world in profound and positive ways. Given how much other waste, fraud and abuse exists in our system, these global health programs should be a low priority, if not even a not a priority at all, when it comes to cuts. 

Where should we be cutting? To prepare the segment, I just looked back at my own reporting over the last decade. I've written for years about Pentagon waste that is far beyond the dollar figure for any silly sounding science grant or health program that was discussed last night at the State of the Union. 

In 2015, a military blimp broke free from its harness in suburban Maryland and dragged a cable through homes, causing destruction and property damage. Where did this thing come from? 

Video. WMAR-2 News. November 4, 2015

The project was called JLENS, or "Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System." Produced by Raytheon at nearly $3 billion cost to the Army, the project was intended to defend against cruise missiles. Theoretically, it was supposed to track objects over an area the size of Texas. But these blimps kept getting destroyed in weather events and faced chronic technical issues. Frankly, they didn't seem to serve any useful purpose. Finally, former Joint Chief of Staff James Cartwright rescued the program, and had it deployed to Afghanistan, where it again failed to provide any real protection to U.S. troops. But Cartwright, after securing the deal, joined Raytheon's board of directors, a job that paid him nearly $900,000 a year. Inevitably JLENS ended up in Maryland, where it eventually untethered and caused random destruction. 

This phenomenon is actually not unique. There are dozens of failed missile defense and radar systems that get re-funded year after year by Congress under the influence of defense lobbyists and the allure for politicians and staff to one day become defense lobbyists. 

Let's take a look at a few quick examples. 

Ground-Based Missile Defense System Has Serious Flaws, Experts Say

 

Despite billions of dollars invested in technology development, Coyle said, the basic architectures of both anti-missile systems “are in doubt because so many parts don’t work, don’t exist, or aren’t achievable.” (AAAS. June 19, 2013)

The government has spent $40 billion on the Ground-based Midcourse Defense system, managed by Raytheon and Boeing. That program, which was carefully with was carefully scripted with conditions in which the system operators knew the exact location, trajectory, speed, and dimensions of test missiles, even under those conditions, the GMD intercept systems failed to consistently produce any interceptions. 

There's the Kinetic Energy Interceptor, a project from North of Grumman in Raytheon, that also failed missile interception systems and was canceled after Navy officials found multiple problems, including its limited range. That program costs $1.7 billion. (Bloomberg. August 2, 2011.)

Or what about "The Multi-Object Kill Vehicle," developed by Raytheon and Lockheed Martin at a cost of $700 million. This program was canceled after military officials found that the anti-missile program faced insurmountable technical challenges. 

Or finally, the Sea-Based X-Band Radar, a floating radar designed to detect enemy missile launches, which failed after tests found that the radar had a limited field of vision and was highly vulnerable to corrosion at sea. The program, managed by Boeing and Raytheon, cost $2.2 billion. 

The Pentagon’s $10-billion bet gone bad Los Angeles Times

Trying to fashion a shield against a sneak missile attack, military planners gambled on costly projects that flopped, leaving a hole in U.S. homeland defense.

(Los Angeles Times. April 5, 2025.)

I could go on and on, just on the failed missile defense and radar systems. And I could spend another hour talking about faulty logistics systems, corrosive and fraudulent work on submarines that leave them completely ineffective and inoperable, billions of dollars of waste on MRAPs and tanks and the list keeps going on and on. Where's the watchdog? Who's keeping this accountable? 

There are a few champions in Congress – people like Rand Paul and Bernie Sanders, who consistently call out military waste, but they are in the minority. The defense industrial lobby largely keeps Congress and any administration, Democrat or Republican, completely subdued and subservient. 

We heard reports initially that DOGE was crossing the Potomac and planning to tackle military fraud and waste. But so far, we've only heard about canceled military DEI contracts. I have no problem cutting the DEI contracts. But let's be honest, that is small potatoes compared to the big fraudulent and wasteful contracts from the defense industrial base. 

The Interview: Danielle Brian

Project on Government Oversight is a non-profit in Washington D.C. that investigates waste, fraud, and abuse. As a journalist, I've relied on POGO's investigations for a very long time. They've investigated Pentagon waste of all types, everything from the $500 hammer that went kind of viral back in the 1980s to more recent failed radar systems, the F-22, the F-35, a lot of issues around the Abrams tanks. They've also investigated other. Federal contracts, the waste, fraud and abuse that occurred during the pandemic and a lot of those multi-billion-dollar rescue packages. They've been around for 40 years doing really vital work and since the topic du jour in Washington is waste, fraud and abuse, I thought it would be great to talk to POGO today. 

Danielle Brian is the executive director of POGO. She's an award-winning journalist really doing cutting-edge work in this guard! 

Lee Fang:  Danielle, welcome to the program. 

Danielle Brian: Thanks so much, Lee. It's lovely to be here.