Property Dumped in Sea, Report Says : Abuse of Supply System on Navy Carrier Alleged

Sailors on the aircraft carrier Kitty Hawk routinely tossed overboard items ranging from desks to radar equipment rather than fill out paper work to return surplus supplies, according to a statement by a former Navy auditor sent this weekend to federal investigators.

The dumping of military equipment typifies a Navy supply system in such disarray that millions of dollars in orders for parts and other products are neither checked in as they are received nor accounted for in ship’s records, according to the 25-page statement and 1,100 pages of Navy records, internal audits and memos obtained by The Times.

The statement by Petty Officer 1st Class Robert Jackson, 26, alleges that the supply system aboard the Kitty Hawk is riddled with case after case of fraud, theft and waste. Jackson’s statement said that his superior officers on the Kitty Hawk, when informed of possible wrongdoing, several times responded by asking Jackson and others to falsify financial records to make questionable transactions appear legitimate, the documents show.

The papers were turned over this weekend to the FBI, the Naval Investigative Service and Rep. Jim Bates (D-San Diego) by Jackson, a former Kitty Hawk auditor who crafted the statement over the last two weeks with the help of two San Diego attorneys.

“Those guys are living in a fool’s paradise out there,” said D. Anthony Gaston, one of the attorneys who assisted Jackson, in an interview Thursday. He added, “The system is so sloppy that you can punch a few keys on the computer and get 30 bars of silver.”

Jackson has been in the Navy eight years, the last 21 months as an auditor on the Kitty Hawk. In that position he became familiar with the accounting and supply systems of divisions throughout the Kitty Hawk, a multipurpose aircraft carrier with about 5,000 Navy personnel on board.

Jackson has cooperated with federal investigators in their probes of procurement scandals on the Kitty Hawk.

Theft Ring Disclosed

Six people, including a Kitty Hawk aviation storekeeper, have been arrested in connection with an international theft ring that allegedly stole spare F-14 fighter plane parts and shipped them to Iran. In a separate investigation, authorities also are looking into the disappearance of more than $1 million in equipment and supplies, including 31 silver bars that vanished after the Navy supply system filled bogus requisition orders for the ingots.

Navy officials in San Diego declined to comment on Jackson’s statement or any of the documents.

“Because the matter is under investigation, the Navy feels it is inappropriate to comment,” said Lt. Ken Luchka, a public affairs officer in San Diego.

Robert Helbock, assistant to the regional director of the Naval Investigative Service, said that authorities are taking seriously any information provided by Jackson.

“Each of the things that he’s provided us we’re looking at,” Helbock said.

Use of Computers Cited

Jackson’s statement spells out several methods used by sailors aboard the Kitty Hawk to manipulate the military’s computerized supply system to cover up sloppy accounting or theft.

One common method was to report that materials were loaded off the ship when in fact they remained on board.

For example, an informant told Jackson on May 26 that he had typed $80,000 worth of “offload documents” even though the materials were never taken off the ship, the statement said.

Another way to conceal stolen goods was to claim that the parts were misplaced or destroyed. This is routinely done by completing Government Property Lost or Damaged (GPLD) Survey Certificates. These forms are rarely audited to make sure the parts are actually missing and not stolen, Navy sources told The Times.

In his statement, Jackson said he and three other officers were ordered to complete these forms without bothering to confirm the information they contained.

Preparation of Forms

Already typed on the forms were a voucher number, the names and ranks of the responsible and reviewing officers and addresses of the commanding and supply officers. Under a section of the form asking for the circumstances of the loss or damage, the forms already contained the following explanation for the disappearance of the parts:

“I certify that the loss of or damage to the item(s) described was not caused by negligence, willful misconduct, or deliberate unauthorized use . . . Item was stored incorrectly or material was relocated with the relocation paper work processed incorrectly, causing the material to be ‘lost’ in the storeroom.”

Jackson and his colleagues filled in the date, the stock number, quantity and cost of the parts--obtained from a computerized list--and checked a box affirming that the parts were lost or damaged.

To discourage abuses in the supply system, the Navy recently assigned quarterly spending limits for each division on each ship.

However, sailors had little problem clearing this obstacle, Jackson’s statement indicated. In some cases, they simply did not enter data into the computer system.

Silver Bars Ordered

For example, when the 31 silver bars ordered by computer on the Kitty Hawk were delivered, no entries were made into the ship’s supply system.

Investigators were unable to find any record of who put in requisitions for the silver bars, what authority they had and how the ingots would be paid for.

A Navy investigation to determine who manipulated the supply system and ordered the bars has only turned up a man who, according to Jackson’s statement, accidentally came across the silver and attempted to use it in a drug deal.

The supply system also lacked safeguards to prevent the initial order of the silver. Silver bars are not used aboard aircraft carriers, a Navy spokesman said.

In other cases cited by Jackson, sailors ordered goods from Navy warehouses and failed to record charges for the items when the equipment arrived on the ship.

Bookkeeping Reference

Jackson said in his statement his divisional audits uncovered large dollar amounts of these “uncharged” items, which the Kitty Hawk is billed for although its books do not show any debits.

A January audit by Jackson of 12 departments aboard the Kitty Hawk, including medical, weapons, executive and supply, showed a total of $2.45 million in supplies that had been received but were “uncharged,” documents show.

In one case, an audit of a flight gear storeroom found an inventory that exceeded the record of parts ordered by $10,000.

In fiscal year 1983, according to Jackson’s statement, the aircraft carrier’s books showed supply expenses of $10 million when, in fact, the ship had spent about $12 million.

Gaston said: “It’s like overdrafting your check book every month and having it go on your Visa card. At some stage in the game you have to pay the Visa off.”

Handling Deficits

Navy sources told The Times that officers routinely bank on future appropriations to take care of past deficits.

When supply officers informed their division superiors aboard the Kitty Hawk that their budgets were running thousands of dollars in the hole, they were told to purchase more supplies anyway, according to Jackson’s statement.

One purchasing officer told Jackson: “It doesn’t matter since we will always get more money.”

This tactic of failing to record charges also was used for purchases involving private Navy contractors. Jackson said he uncovered $176,000 in supply requisitions in May for contractor work that was never listed on the books.

In these cases the contractors eventually receive their money, but the Navy is unable to account for the charges.

Missing Files

Jackson’s review of 12 items purchased from private contractors, each item worth more than $5,000, found that six of the files were missing. Jackson said in the statement that he reported to a supervisor the possibility that equipment had been purchased without bids and other proper supply procedures.

The next morning, he was ordered to rewrite the audit of the supply department and ignore the $176,000, Jackson alleges.

In another case, a quarterly audit by Jackson last month of the Kitty Hawk’s medical department showed a negative balance of $13,744.17. In his statement, Jackson said he was ordered to rewrite the audit.

“I decided to quit. I had had enough,” Jackson said in the statement. “These people were asking me to manipulate these audits.”

Jackson’s resignation and his request for a transfer on June 6 were denied. (Jackson wrote in his resignation letter that he found it “against my personal moral ethics” to only account for items valued at more than $1,000.)

Audit Is Redone

Jackson was again ordered to redo the medical department’s audit, according to the statement, and this time the audit showed a positive balance of $3,717.94.

The papers obtained by The Times told of repeated failures by Navy personnel to introduce accounting changes to curb procurement abuses. Jackson’s statement said those failures included:

- The dumping of unused supplies overboard became so widespread that Jackson recommended to a superior officer that perhaps supply petty officers should be trained how to take back surplus items. The officer rejected the idea because it would “throw off” storeroom inventories.

During a recent cruise, Kitty Hawk crew members grew tired of hauling supplies from the deck to a storage room and began throwing them into the water.

- Jackson discovered that the ship’s entire bookkeeping system was in shambles after he was assigned in December to determine the net expenditures of each division. Some divisions kept ledgers. Others scribbled figures in green note pads. And a few were unable to produce any bookkeeping records at all.

- A ship’s auditor found a deck department receipt for $320 for 16 yards of white cotton material. When Jackson brought the receipt to the attention of a finance supervisor, he said that the Navy was handling millions of dollars and could not become concerned about the small amounts of possible overpricing.

- A vendor offered a steady supply of San Diego Padre baseball tickets to a purchasing clerk if he agreed to exclusively carry his product line. When the clerk reported the incident to an officer and attempted to change the product line, he found himself out of that job.

Reaction of Officers

Attorney Randy C. Whaley, who also is representing Jackson, said the Navy is trying to discredit his client so that he cannot cause further embarrassment. Whaley said that Navy officials were “incensed” when they learned that Jackson had gone outside the Kitty Hawk to consult attorneys after his requests for a Navy lawyer were rejected.

On Wednesday, Navy officials in San Diego ordered Jackson back to the North Island Naval Air Station despite concerns that his life was in danger there. Jackson, who has named 30 sailors involved in theft and fraud, has reported receiving two death threats aboard the Kitty Hawk.

The order to return to North Island was rescinded by Navy officials in Washington, and Jackson has been transferred to another base and assigned to duties other than auditing.

Jackson was ordered last week not to talk to the media without first getting permission from Navy public affairs.

Government officials who have interviewed Jackson in the last two weeks said that unlike many whistle blowers, he has provided detailed information and solid documents to support his claims.

“We didn’t know what sloppy accounting was until (Jackson) came in,” said David Gerrie, an aide to Rep. Bates, who has met with Jackson a half dozen times over the last month. “He has shown us problems that we can point out to the Navy.”