The salacious headlines came quickly and furiously: "Pentagon Spent $4.6 Million on Lobster Tail and Crab in One Month," Reason reported. "Feds gorge themselves on lobster as part of $97bn end-of-fiscal year spending spree – report," the Russian propaganda network RT proclaimed.
As is often the case with inflammatory headlines that capture eyeballs and push audiences to click on them, readers wrote to us asking whether the reports could be believed. But as is also often the case with hastily reported and salacious stories, the underlying facts were complicated. Was this a story about government waste? Sort of. Did the Department of Defense (DoD) really spend $4.6 million on lobster in one month? Probably not, but even if it did, that's beside the point.
In March 2019, the Florida-based government watchdog Open the Books published a report examining a phenomenon known as "use it or lose it" spending, in which federal agencies rush to burn through their budgets for fear of seeing their allocations docked the following year. "In the final month of the fiscal year [September], federal agencies scramble to spend what’s left in their annual budget. Agencies worry spending less than their budget allows might prompt Congress to appropriate less money in the next fiscal year." To avoid this, the Open the Books report said, federal agencies embark on last-minute spending sprees.
Using public records and the government spending database USASpending.gov, Open the Books reported that federal agencies expended $97 billion on 509,828 contracts in September 2018. The Pentagon was far and away the top spender, shelling out $61.2 billion in contracts. Out of all that information, a relatively small expenditure captured the imaginations of headline writers and politicians alike -- the Pentagon spent $4.6 million in September on crab and lobster and a total of $22.1 million on lobster in 2018, according to USASpending data:
This kind of waste has to stop. It’s an insult to taxpayers. https://t.co/o0Z9uAzaqp
— Senator Rand Paul (@RandPaul) March 12, 2019
But when we approached DoD with questions about the expense, spokeswoman Heather Babb asserted to us that the figure was not accurate. Babb told us that the Defense Logistic Agency (DLA), a subsidiary of the DoD, purchases food from commercial retailers on behalf of military units and "other federal agency customers." In September 2018, she said, "DLA purchased $1.6 million in crab and lobster items ($0.67 million for lobster and $0.94 million for crab). This is significantly less than what was reported, and equates to 1.1 percent of the total $271 million DLA spent in subsistence/food items on behalf of customers that month."
Babb added that the $1.6 million amount spent in September 2018 was close to the typical monthly average of $1.4 million for the previous 17 months spent on items containing the words "crab" or "lobster" in their names, a list that could include such foodstuffs as imitation crab, lobster bisque, and crab cakes.
Most of the purchased food items (to the tune of 75 percent) were for military units "stationed/deployed overseas or embarked on ships. These items are usually requested as a troop morale builder or for special occasions like service birthdays," Babb told us.
So why the discrepancy between what was reported on the USASpending site and what the DoD said it spent on lobster and crab in September 2018?
Pat Mackin, spokesman for DLA, told us that large orders including various products were categorized under the most expensive portion of the purchase, so an entire order comprising several different types of foods would be reported as "lobster" to USASpending if lobster were the costliest part of the purchase. As an example he sent us screen shots of a food order totaling $248,719.72. Although the order was labeled "lobster tail," it included a wide range of items such as pork, eggs, cheese, burritos and frozen vegetables, while lobster tail made up $26,268 of the order:
The reports prompted responses from service members such as Marine Corps veteran Dave Hardin, who told us in an email, "I can inform you that lobster and crab are indeed served to our military. It is always a rare occasion." He added, "Does the 'spend it or lose it' mentality exist? Of course, it does. It most certainly leads to waste and abuse in some cases. [But] I seriously doubt providing our military members with a lobster and or crab dinner once a year should be considered excessive spending. "
Cartoonist and fellow Marine Corps veteran Maximilian Uriarte crunched numbers and estimated in a tweet that feeding 1.3 million active duty troops lobster or crab occasionally was actually not that much of an expense:
Just some quick math: $22 million a year on lobster tail DOD wide.
$22 million/1.3 million active duty = $16.92 per person per YEAR.
I’m sure DOD gets a good price on wholesale lobster, so well say each tail is like $3-5
Maybe 3-4 lobster tails per person, per year.
— Maximilian Uriarte (@TLCplMax) March 13, 2019
Sean Moulton, senior policy analyst for the Project on Government Oversight (POGO), a government transparency advocacy organization, said DoD could have prevented the confusion by providing more detailed financial data that would then present more accurate information for the public. (The DoD was faulted in a 2017 Inspector General report for failing to submit complete, timely, and accurate contract award data in compliance with transparency laws. As a result, the report found, "DoD spending data displayed on USASpending.gov was inconsistent and unreliable to policymakers and taxpayers.")
"I think that Open the Books is being fair and accurate by saying, 'this is what we found and this is what the agency is reporting,'" Moulton told us. "We have to take that for what it is. We have to leave it to the agency to do a better job reporting [financial data]."
Curtis Kalin, communications director for the government spending watchdog group Citizens Against Government Waste agreed, telling us that those holding the government accountable for its use of taxpayer dollars are "kind of at the mercy of USASpending."
"This [use it or lose it spending] that Open the Books was reporting on isn't a new phenomenon," Kalin said. "This has been happening for many, many years -- they [federal agencies] spike their spending at the end of the year so they can justify that line item."
Since 2015, the amount of "use it or lose it" last-minute spending by federal agencies has increased steadily. "Between 2015 and 2018, federal spending during the final month of the fiscal year increased by 39 percent," Open the Books reported. "From 2017 to 2018, September spending increased by 16 percent":
Open the Books founder and CEO Adam Andrzejewski put the blame for this form of spending on Congress, for upending in recent years what is known as "regular order."
Under regular order, or the proper budget process, each portion of the budget sees committee hearings, subcommittee hearings, public debates and public votes. Also, under regular order, a staffer is responsible for each line of the budget. On a lobster expenditure, for example, a specific staffer would have been responsible and accountable for that line of the budget under regular order. But over at least the last seven years, Congress has lost that accountability, Andrzejewski said.
In that time, the regular budget process has been short-circuited because an increasingly fractious and partisan Congress has been unable to pass budgets under regular order, which results in massive lump-sum spending through last-minute crisis bills. In these bills, everything is jumbled together and sorted out later. "All of the pressure and incentives are lined up on the spending side," Andrzejewski said. "When the bureaucrats can hardly spend all of the money that Congress throws at them, there's a problem."
Moulton likened news reports that fixated on the most salacious angle, the lobster and crab purchases, with the British adage "penny-wise, pound-foolish" -- that is, being mindful of small amounts of money while being negligent about large sums. "Compared to the other spending, the lobster thing is pennies compared to the literally billions of dollars they were spending in a mad rush at the end of the year," Moulton said.
Open the Books staffers created a step-by-step video demonstrating how they accessed, downloaded and calculated the data for lobster using the USASpending site: