AIR UNIVERSITY

Air force research institute

The Green Eyeshades of War

An Examination of Financial

Management during War

by

Gen Larry O. Spencer

37th Vice-Chief of Staff of the Air Force

Air University Press

Air Force Research Institute

Maxwell Air Force Base, Alabama
ii

Project Editor

Dr. Ernest Allan Rockwell

Copy Editor

Sandi Davis

Cover Art

L. Susan Fair

Book Design and Illustrations

L. Susan Fair

Composition and Prepress Production

Michele D. Harrell

Print Preparation and Distribution

Diane Clark

Library of Congress Cataloging-in-Publication Data

Names: Spencer, Larry O., 1953- author. 

Title: The green eyeshades of war: an examination 

of financial management during war / by Gen Larry 

O. Spencer, 37th Vice-Chief of Staff of the Air Force.

Other titles: Examination of financial management 

during war

Description: [First edition] | Maxwell Air Force 

Base, Alabama: Air University Press, Air Force 

Research Institute, [2016]

Includes bibliographical references and index.

Identifiers: LCCN 2016014045 | ISBN 

9781585662616

Subjects: LCSH: United States—Armed Forces—

Accounting—Case studies. | World War, 1939-1945—

Finance—United States. | Vietnam War, 1961-1975—

Finance—United States. | Persian Gulf War, 1991—

Finance—United States. | Iraq War, 2003-2011—

Finance—United States.

Classification: LCC UB163 .S64 2016 | DDC 

355.6/220973--dc23

Published by Air University Press in July 2016

Disclaimer

Opinions, conclusions, and recommendations expressed 

or implied within are solely those of the authors and do 

not necessarily represent the official policy or position of 

the organizations with which they are associated or the 

views of the Air Force Research Institute, Air University, 

United States Air Force, Department of Defense, or any 

other US government agency. This publication is cleared 

for public release and unlimited distribution.

AIR FORCE RESEARCH INSTITUTE

AIR UNIVERSITY PRESS

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AFRI

Air Force Research Institute
iii

Contents

About the Author v

Acknowledgments vii

Introduction ix

 1 World War II

Setting the Stage 1

 2 Vietnam

Repeating Past Mistakes 9

 3 Operation Desert Storm

Up Close and Personal 25

 4 Operation Enduring Freedom and Iraqi Freedom

Shock and Awe 51

 5 What Did We Learn?

A Path Forward 69

Abbreviations 79

Bibliography 81
iv

CONTENTS

Illustrations

Figures

 1 Secretary of Defense Robert McNamara briefing

the press on events in Vietnam 10

 2 Veterans for Peace at the March on the Pentagon,

21 October 1967 12

 3 Col J. L. “Jumbo” Evans, Lt Col Sara N. Harris,

Capt Cynthia Little, Col Farley E. Peebles, Maj Ralph

Law, and Lt Col John Fippen all holding letters from

the governor of the state of Alabama 16

 4 Col David Eberly, USAF, a prisoner of war captured

by Iraqi forces during Operation Desert Storm, salutes

the crowd waiting to welcome him and other former

POWs upon their return to the United States 27

 5 Cashier windows in the finance tent, Prince Sultan

Air Base, Al-Kharj, Saudi Arabia 29

 6 Female military members have adapted to operations

in Muslim countries, wearing traditional head scarves

to adhere to local custom 31

 7 SSgt Leonard “Skip” Sergent 32

 8 US military personnel in full chemical suits during

Operation Desert Storm 35

 9 SSgt Robert Caldwell returning from Operation Desert

Storm to Seymour Johnson Air Force Base 45

 10 Exercise Bright Star 53

 11 Capt Shylon “Shy” Ferry, USAF, receives an award

from Lt Gen T. Michael Moseley 54

 12 Finance customer service 58
v

About the Author

Gen Larry O. Spencer, USAF, retired from active duty on 1 October 2015 as the 37th vice-chief of staff of the Air Force and with nearly 

44 years of active service. He is one of the very few who began as an 

enlisted Airman and rose to the rank of general. General Spencer is 

also the first Air Force officer promoted to the four-star rank with a 

primary specialty of financial management. As such, he is uniquely 

qualified to discuss financial management issues as they relate to the 

Department of Defense. In particular, his financial experience includes extensive support of two major war operations. As the wing 

comptroller for the 4th Fighter Wing at Seymour Johnson AFB, 

North Carolina, then-Major Spencer supported Operations Desert 

Shield and Desert Storm. Based in large part on his support of the 

war, Major Spencer’s squadron was named “Best in the Air Force” for 

two consecutive years—an accomplishment that has never been 

matched. Major Spencer was also named the “Best Comptroller” in 

the Air Force. Additionally, during an important inspection just after 

the war, his squadron was rated “outstanding . . . best seen to date.” As 

the command comptroller for Air Combat Command at Langley 

AFB, Virginia, then-Colonel Spencer oversaw financial operations 

for Operations Enduring Freedom and Iraqi Freedom. For his support of war operations, he was named “Best Major Command Comptroller in the Department of Defense.” General Spencer is currently 

president of the Air Force Association (AFA). In that capacity, in addition to leading the AFA professional staff, he heads the AFA Veterans Benefit Association and the Air Force Memorial Foundation and 

serves as publisher of the monthly Air Force Magazine.

vii

Acknowledgments

I acknowledge my wife for her support and indulgence for the 

hours I devoted to writing and researching materials for this work. I 

offer thanks to all of those who contributed their personal accounts 

of financial management during war. I also acknowledge the staff of 

Air University Press for their expertise and guidance. I particularly 

thank Dr. Ernest Allan Rockwell for his editing support and advice. I 

thank the hundreds of financial managers that served heroically during war despite the obvious deficits in training and materials. In particular, I thank the men and women who served with me in the 4th 

Comptroller Squadron at Seymour Johnson AFB, North Carolina, 

during Operations Desert Shield/Storm and those assigned to the Air 

Combat Command comptroller staff during Operations Enduring 

Freedom and Iraqi Freedom. I will forever be grateful for your service 

and friendship. Finally, I thank God for his enduring support and 

protection of my family and me.

ix

Introduction

In 415 BC, during a speech to his people, the Syracusan general 

Hermocrates said, “[The Athenians] have abundance of gold and silver, and these make war, like other things, go smoothly.”1

 The presumption that wealthy countries will generally be victorious in battle 

against adversaries with limited resources is embedded in that statement. Given inflationary factors since 415 BC, I wonder if the sheer 

magnitude of the costs of war in the twenty-first century would cause 

even Hermocrates pause.

Roman author, orator, and politician Cicero said, “Endless money 

forms the sinews of war.”2

 In 1499 Gian Giacomo Trivulzio, who held 

several military commands during the Italian wars, told King Louis 

XII of France, “To carry on war, three things are necessary: money, 

money, and yet more money.”3

 Finally, in the American War of Independence, Nathanael Greene said, “Without a military chest, it is next 

to impossible to employ an army with effect.”4

 There is a subtle presumption buried in these quotations that is unspoken but nonetheless 

true in war: the presumption that states with wealth have the capacity 

and training necessary to manage those large sums of money during 

war. The Golden Rule states, “He who has the gold, makes the rules.” 

What is missing from that axiom is the assumption that “he who has 

the gold knows how to manage the gold.”

The US history of money and war is indeed a storied one, filled with 

struggles and a lack of preparedness on the battlefield. From its earliest 

history, the Second Continental Congress named James Warren the 

first paymaster general in July 1775. Despite having the term “general” 

in his title, he was actually a civilian. Warren was essentially in charge 

of the finances of the Continental Army under George Washington. 

Once the war started, paymasters appointed from the regiments and 

battalions within the Continental Army struggled mightily because 

they had to learn their trade on the job. 5

In the period around the Mexican–American War (1846–48), 

much of the country operated using regional currency. This situation 

meant that states or smaller regions issued their own currency, which 

was not necessarily recognized by neighboring states. As a result, the 

federal government paid soldiers with hard currency—actual coins 

containing gold or silver—but executing those payments proved cumbersome at best to transport or carry. According to Robert McConnell, 

curator of the Finance Corps Museum at Fort Jackson, South Carolina, 
x

INTRODUCTION

“Pay during World War I did not go smoothly.” To help the struggling 

pay clerks, they were all temporarily promoted to second lieutenants 

just to minimize the chance of their being “shanghaied.”6

The United States is blessed with an abundance of resources. As 

such, the amount of money consumed during wartime has been substantial. However, the US military’s ability to manage those large 

sums of money is another matter. A 7 September 2003 USA Today

article noted that “the monthly bill for U.S. military missions in Iraq 

and Afghanistan now rivals Pentagon spending during the Vietnam 

War. . . . The Pentagon is spending nearly $5 billion per month in Iraq 

and Afghanistan.”7

 Therefore, from the outset of the Iraq and Afghanistan wars, it was clear that the United States possessed an abundance 

of resources.

However, when a 2002 General Accounting Office (GAO) report 

found that as much as $101 million in contingency operations funds 

were spent on questionable expenditures, the US government’s ability 

to manage those funds was called into question.8

 That same report 

concluded that limited guidance and oversight, combined with a lack 

of cost consciousness, were significant contributors to the problem. 

The GAO surmised that unless the Department of Defense (DOD) 

developed more definitive guidance and increased oversight, the 

problems of managing funds during contingency operations would 

likely continue.9

This brings into focus an important question. If we recognize that 

success in war requires large sums of money and resources, is our 

military prepared to manage those funds during war? This question 

sets the stage for the following chapters that will walk through the 

history of money and war to determine how effectively the military 

has managed money during times of conflict.

The reason for addressing this issue is simple yet critical. In today’s 

environment, the efficient and effective use of taxpayer dollars is paramount to congressional and public support. Without that support, 

as Hermocrates observed, US involvement in war might not go 

smoothly. However, even as the United States defeated the Iraqi regime and embarked on rebuilding efforts, the debate over the military’s management of money during war continued.

As the initial stages of Operation Iraqi Freedom concluded, congressional leaders were at odds with the White House over the costs. 

Cong. Earl Pomeroy (D-ND), who visited Iraq, said, “The rebuilding 

of Iraq will be significantly more expensive, more dangerous and take 
xi

INTRODUCTION

longer than the American people have been prepared for.”10 In addition, Cong. Jim Nussle (R-IA), chairman, House Budget Committee, 

planned to expediently call DOD officials for hearings in front of his 

committee to get more detailed accounting of the costs of Iraq’s reconstruction and occupation.11

Today there are threats of war and violence at every turn. Even in 

the middle of the debate over Gulf War spending, US naval ships 

were poised off the coast of Liberia in anticipation of possible US intervention. In North Korea, Russia, Syria, Iran, areas controlled by the 

Islamic State, and elsewhere, the potential for conflict in the future is 

as evident as it is complicated. Lone-wolf terrorist attacks, cyber 

threats, and vulnerabilities in space that were far-fetched in the minds 

of our predecessors are very real today.

I frame this picture of current and future threats to the United 

States only to add credence and credibility to why an examination of 

war and money is critically important. If I could modify the words of 

Hermocrates to fit the twenty-first century, I would say that sufficient 

amounts and the efficient management of money are critical elements 

necessary to make war go smoothly.

Some might wonder why money and war are so inextricably 

linked. The United States is a nation with a $17 trillion gross domestic 

product.12 Couple that fact with the strongest, most-feared military in 

the world and most observers would conclude that victory in battle is 

all but a foregone conclusion, given our vast war chest. However, an 

examination of our financial history in war might suggest otherwise. 

Spending during World War II was characterized as an open checkbook. However, today Congress and the American public demand 

full accounting of taxpayer dollars—even during war.

Additionally, commanders can ill afford the distraction of poor financial management on the battlefield. The “shock and awe” of Operation Iraqi Freedom clearly demonstrated the sophistication and synchronization of modern joint warfare. Can one imagine a deployed 

commander huddled around the war-planning table agonizing over 

every minute detail of an attack only to be interrupted with pay problems or to be told that a critical piece of war equipment was not approved in the budget?

Does this sound far-fetched? Consider an incident during Operation 

Urgent Fury in Grenada, roughly 10 years after the Vietnam War. In his 

autobiography It Doesn’t Take a Hero, Gen H. Norman Schwarzkopf 

described an extremely chaotic scene involving ranger attacks and 
xii

INTRODUCTION

helicopter support under extreme combative stress during the operation. In the middle of the turmoil, the admiral in charge of operations 

received an urgent message from the office of the Navy’s comptroller 

in Washington, DC, warning that the admiral should not refuel Army 

helicopters until the funds-transfer arrangements had been finalized 

between the Army and Navy!13

Another point to consider in evaluating the worth of such an examination of wartime financial performance is the ever-increasing 

technology of modern warfare. Anyone that witnessed the precision 

of US war-fighting capability during Operation Desert Storm most 

assuredly came away impressed with our technological advantage. 

However, behind every quantum leap in military capability was a 

concurrent leap in costs to research, develop, procure, field, and sustain those systems. Also, consider that we are in the middle of a 

changing pattern of history. When the Soviet Union dissolved, the 

United States assumed political and military predominance in the 

world. The price we pay for that preeminence is the fact that US forces 

are increasingly sought after to resolve regional conflicts and preserve 

the peace. Shifting priorities in the United States further complicate 

this changing pattern.

An increasing budget deficit, an unstable economy, demands for 

better education and health-care reform, and calls to reform entitlement programs are but a few of the major problems competing for 

scarce domestic attention and resources. Thus, to state the obvious, 

the DOD can ill afford to mismanage money during any period—

particularly during conflict, when the financial costs are so high.

In this evolving world environment that many believe will spawn 

more frequent and increasingly expensive military operations, I predict that the battle cry will not be victory at any cost, as it was in 

World War II. To the contrary, this new world order will demand 

victory at the most efficient and most economical cost. In this new 

world order, full financial support for contingencies is not a given. In 

fact, getting the funds necessary to win our nation’s wars depends 

upon our military having the confidence of Congress and the American people that military financial managers can and will effectively 

and efficiently execute those funds during times of conflict. The question is, are we up to the task?

This monograph will put military financial management during 

war on trial, examining fiscal performance and readiness during various conflicts: World War II, Vietnam, Operations Desert Shield/Storm, 
xiii

INTRODUCTION

and Operations Enduring Freedom/Iraqi Freedom. Each of these 

conflicts is unique, yet each situation validated the critical need for 

sound fiscal management and controls. Let the trial begin.

Notes

1. Benjamin Jowett, Thucydides, 2nd ed. (Oxford, UK: Oxford University Press, 

1900), 205.

2. Quoted in Robert W. Kolb, ed., Sovereign Debt: From Safety to Default (Hoboken, NJ: John Wiley & Sons, 2011), 1.

3. Quoted in Robert Debs Heinl Jr., ed., Dictionary of Military and Naval Quotations (Annapolis, MD: Naval Institute Press, 1966), 115.

4. Quoted in Lee Patrick Anderson, The Life & Times of Major-General Nathanael 

Greene (Boca Raton, FL: Universal Publishers, 2002), 242.

5. Clifford Kyle Jones, “Finance Corps Has History of Meeting Challenges,” NCO 

Journal, 9 July 2013, http://ncojournal.dodlive.mil/2013/07/09/finance-corps-has

-history-of-meeting-challenges/.

6. Quoted in ibid.

7. Dave Moniz, “Monthly Costs of Iraq, Afghan Wars Approach That of Vietnam,” 

USA Today, 7 September 2003, http://usatoday30.usatoday.com/news/world/iraq/2003

-09-07-cover-costs_x.htm.

8. General Accounting Office (GAO), Defense Budget: Need to Strengthen Guidance and Oversight of Contingency Operations Costs (Washington, DC: GAO, May 

2002), 2, http://www.gao.gov/new.items/d02450.pdf. The GAO was renamed the 

Government Accountability Office in 2004.

9. Ibid., 3.

10. Moniz, “Monthly Costs.” 

11. Ibid.

12. World Bank, “GDP (current US$),” 10 April 2015, http://data.worldbank.org

/indicator/NY.GDP.MKTP.CD.

13. H. Norman Schwarzkopf and Peter Petre, It Doesn’t Take a Hero (New York: 

Bantam, 2010), 250.

Chapter 1

World War II

Setting the Stage

The Open Checkbook 

To win World War II, the United States consumed $176 billion—a 

sum that still staggers the imagination, even considering the immense 

inflation subsequent to 1945.1

 Although that large expenditure of dollars helped achieve a decisive US victory, the fiscal management of 

those dollars was anything but decisive. In fact, many people considered 

financial stewardship during World War II downright disgraceful!

The summation of military financial performance during the war 

is indeed disappointing. Uniformed financial managers were both 

untrained and unprepared. Walter Rundell, Jr., one of the few authors 

to focus on military fiscal performance during the war, surmised in 

his book Military Money that “finance officers were forced to cope with 

wartime financing as best they could, by improvising and muddling 

through.”2

 The military financial community was so unprepared for 

the war that the first finance unit did not arrive in Europe until 26 

January 1942. Further, not only did they arrive technically unprepared 

for wartime operations but also rudimentary financial equipment was 

missing. “Had no office equipment—just one typewriter and one portable adding machine, which was lost somewhere in shipment, no idea 

what happened to it,” commented an officer in the unit.3

Since little thought had been devoted to managing money during 

war, even the regulations and pay tables were left behind. In fact, as farfetched as it sounds, the first two months’ payrolls had to be computed 

from memory.4

 Thus, from the onset, military fiscal leaders were late to 

the fight, untrained to operate under wartime conditions, and lacking 

the appropriate equipment and documentation for fiscal guidance.

One explanation of why the Finance Department devoted so little 

effort to war planning was the faulty assumption that peacetime doctrine and systems could easily transition to the battlefield. According to 

Rundell, “By far the most telling complaint registered against the pay 

system overseas was its design for peacetime operations. Before the war 

began, those in the Finance Department responsible for planning had 
2 │ WORLD WAR II: SETTING THE STAGE

failed to foresee that the existing method of payment was not fitted 

for overseas.”5

Stateside payments to troops were relatively easy because it was 

simple to muster them in a group for an orderly process. However, 

during the war, finance agents had to “chase around all over the countryside looking for their men when they should have been free to 

command them in the field. That the job got done over there was a 

credit to the men running the system, not to the system itself.”6

The impact of not planning financially for the war manifested itself 

in a host of problems and miscues, including the nonpayment of 

troops in the field. Units assigned to the Aleutian Islands and the 

Hawaii Department, at one point, were actually not paid for six and 

four months, respectively.7

 The nonpayment issue reached such proportions throughout the theater that Gen George C. Marshall was 

compelled to notify all theater commanders about the extent of the 

problems. In an official notification, General Marshall not only complained about delayed payments in-theater but also lamented that 

many returnees to the States had not been paid in months. Marshall 

further encouraged all theater commanders to give special attention 

to correcting pay problems.8

To compensate for inadequacies in troop pay, “partial” or “advance” 

payments were often issued to cover incidental expenses. However, 

since there was no plan to account for such payments, abuse frequently 

resulted—particularly for the Army Air Corps. Since flying duties resulted in frequent movement, individuals would continue to draw advance payments as they moved from one location to another even 

though the additional payments were not authorized. Unfortunately, 

since the Finance Department had no system of verification, there was 

virtually no way of detecting the unauthorized payments.9

Aside from deficiencies in troop payments, local vendor and contractual support, an often-overlooked task of military financial managers during war, was also problematic. During the war, US forces 

contracted with local vendors for such critical wartime support as 

aircraft maintenance and logistical support. The problem was that 

payments for these services in an overseas wartime environment bore 

little resemblance to those in peacetime operations.

For example, areas like northern Australia, which continued to 

embrace the bartering concept, demanded payment in beads, mirrors, colorful cloth, and cosmetics instead of currency.10 Illiterate 

Bedouins in Morocco used thumbprints to verify identification rather 
WORLD WAR II: SETTING THE STAGE │ 3

than the signatory process used in the United States.11 These methods 

of payment and currency verification may seem ancient now; however, when you consider the criticality of the goods and services being 

purchased, this shortcoming was indeed a major one in supporting 

war operations.

The Finance Department also should have recognized that the 

deployment of massive numbers of US troops abroad would lead to 

the financial requirement to apportion pay due to dependents in the 

form of military allotments. With that recognition, the Finance Department could have worked with the Office of Dependency Benefits, 

the central Department of War agency for mailing allotment checks, 

to ensure the smooth implementation of payments to family members back home.

However, such recognition was not forthcoming. Sloppy and cumbersome procedures led Brig Gen L. S. Ostrander, adjutant general for 

United States Army Forces in the Far East (USAFFE), to comment 

that this financial mismanagement created “a serious morale lapse” in 

his theater.12 In late 1943 between 4,000 and 6,000 allotment payments 

were 6–12 months behind schedule. The chief finance officer of the 

Southwest Pacific area (SWPA) protested, “I realize the Office of Dependency Benefits has its problems, but when those problems become 

a year old, it’s very hard to explain . . . to troops in the combat area.”13

Yet another miscue in fiscal management involved foreign currency exchanges. In terms of preparedness for war, the fact that the 

Department of War’s Office of the Fiscal Director in Washington did 

not distribute a foreign exchange guide to the field until September 

1943—nearly two years after the war began—clearly indicates little 

forethought concerning financial management in a war zone. Prior to 

the issuance of the guide, currency exchange procedures were piecemeal and did not reflect consistent fiscal policy.14

The impact of an inconsistent currency exchange policy was outright fraud and a thriving black market. For example, the Persian 

Gulf Command (PGC) was particularly vulnerable to currency exchange tampering. Iran was the hub that controlled large quantities 

of marketable commodities destined for the Soviet Union through 

the US lend-lease program. Since there were few controls on foreign 

currency, lend-lease goods were often sold on the black market at 

considerable profit. Since there were no restrictions on the amount of 

currency converted back to US dollars, departing merchant seamen 

became particularly adept at this illegal yet highly profitable venture. 
4 │ WORLD WAR II: SETTING THE STAGE

The PGC finally developed a control mechanism that clamped down 

on this profiteering scheme in 1945.15 Sadly, this development may 

have been a case of too little too late because this type of activity had 

gone essentially unchecked for nearly four years.

An even more alarming case of fraudulent activity actually involved 

a military finance cashier. The sergeant’s scheme was not a complicated one. He simply set up the unit’s bank account in his own name 

and then purchased a large number of French francs and Italian lire 

with Egyptian pounds at rates below the legal rate of exchange. Next, 

he reversed the transactions by exchanging his francs and lire for 

Egyptian pounds at the higher official rate. Fortunately, the cashier 

was discovered and subsequently court-martialed.16 Nevertheless, these 

examples of poor fiscal controls clearly show that military financial 

managers were not prepared to go to war.

During World War II, senior commanders placed great pressure 

on financial managers to do things that were either inappropriate or 

illegal. A captain disbursing officer assigned to the Finance Office in 

Melbourne, Australia, refused commercial payments to local nationals because the payments exceeded his authorization. Gen Douglas 

MacArthur objected and wanted the payments to be promptly made. 

To the disbursing agent’s credit as the accountable official, he told 

General MacArthur he was legally required to follow the fiscal laws 

and regulations and would be held personally liable. Despite the protest, General MacArthur issued the captain a written authorization to 

make the payments. In 1944 the General Accounting Office (GAO) 

audited the unauthorized payments and held the captain accountable 

for $3,368,000. After reviewing General MacArthur’s authorization, 

the GAO acquiesced; however, final relief for the debt came only after 

congressional legislation.17

In hindsight, one might ask the question, Why was the Finance 

Department given such huge sums of money since the financial community was obviously not prepared to support the war effectively? A 

close reading of the history provides clear focus to what was an apparent serious lapse in judgment. In stark contrast to anything this 

country had witnessed before, the emotion surrounding the attack on 

Pearl Harbor was unprecedented. As a result, despite some early reservations about the Department of War’s ability to manage such large 

sums of money, Congress provided all the funds necessary, an open 

checkbook if you will, to ensure the total defeat of the once-great Axis 
WORLD WAR II: SETTING THE STAGE │ 5

powers. Put another way, defeating the enemy meant everything; how 

we achieved the victory and at what cost were secondary.

To illustrate this state of emotion, the following comments in the 

congressional record by Cong. D. Lane Powers (R-NJ) of the House 

Subcommittee on Military Appropriations typify the mood of Congress in 1943 regarding funding for the war:

It is hard for me and it is hard for anyone else to conceive of $72,000,000,000. 

In my wildest dreams I just cannot think of that much money. . . . I am frank 

to admit that there are many items in the $72,000,000,000 that I definitely do 

not know all about, but I am willing to take the word of our General Staff, and 

when they tell me that these moneys are needed to promote the war successfully, I say that . . . the money should be granted. . . . I am taking the word of 

the General Staff of the War Department, people who are running this show. 

If they tell me this is what they need for the successful prosecution of this war 

and for ultimate victory, I am for it. Whether it staggers me according to its 

proportions or not, I am still for it.18

Despite the issues of financial unpreparedness, there was a silver 

lining to this cloud that was to become a trend for all the wars that 

followed—that is, great people doing great things despite poor training. Rundell recounts the story of one conscientious disbursing officer 

who unintentionally miscounted payments for 500 enlisted replacements during the Normandy invasion. In his haste to get the troops 

paid, he had mistaken 500-franc notes for 50-franc notes. Distraught 

over the miscalculations and perhaps concerned over his personal 

liability of a loss that totaled 450,000 francs, he grabbed his payroll 

data and boarded ship, just as the gangplank was being raised. During 

the journey, he frantically recalculated each payment and balanced 

out his account as the ship reached shore. Relieved that all was in 

good order, his thoughts immediately turned toward two questions: 

how would he get back to England and how could he convince his 

superiors that he had not gone AWOL.19

Postwar Actions

Following the war, a congressional committee reviewing the military’s performance reported “unconscionable wastes of money” 

caused primarily through two shortcomings: the Department of 

War’s failure to adopt modern financial business practices and the 

lack of a battlefield financial system to accurately record expenditures.20 Concerned over the findings in the congressional report, the 
6 │ WORLD WAR II: SETTING THE STAGE

secretary of war directed a separate study of the “business practices” 

during the war. The final report concluded that no one, from the secretary of war on down, knew the real costs of operations for which they 

were responsible.21 In other words, Congress had indeed provided an 

open checkbook, with little accountability for expenditures. The military consumed $176 billion of taxpayer money during the war, but no 

one knew exactly where and how the money had been spent.

As a result of these studies, a decision was made after the war to 

appoint a single individual—experienced in accounting and budgeting—to organize and manage military financial procedures. The new 

position was intended to parallel that of a comptroller in private industry. Therefore, based on the precedent set by the Air Force that 

had already achieved great success with the appointment of an Air 

Force comptroller, the Army established a comptroller position to 

bring sound fiscal management practices to the Army.22

Missing the Mark

The bottom-line verdict in financial management during World 

War II was that the military financial community was unprepared. 

This deficiency led to the mismanagement of fiscal resources throughout the war, described in 1943 by Sen. Harry F. Byrd, Sr. (D-VA), 

chairman of the Joint Committee on Reduction of Nonessential Federal Expenditures, as “unnecessarily extravagant and wasteful.”23

Horror stories, including the nonpayment of entire units for periods 

up to six months, diverted the attention of senior field commanders 

and compromised troop morale.

Even seemingly insignificant financial transactions such as partial 

payments and foreign currency exchanges lacked fiscal controls and 

led to abuse. In fact, shortcomings with troop pay and currency exchanges resulted in an overdraft of $530,775,440.24 Commercial vendor and local labor payments proved themselves critical to the warfighting effort. Yet, this important task received little if any preplanning 

before the war.

The open-checkbook approach to funding eased the burden of accountability in the field. However, this lax means of funding accountability, albeit unintentional, created an environment of waste and uncontrolled spending. As a result, congressional leaders approved—with 

little insight or validation of the real requirements—huge sums for 
WORLD WAR II: SETTING THE STAGE │ 7

the war. Also, the general mismanagement of foreign currency 

throughout the war theater led to fraud and black market ventures.

Finally, despite the myriad of associated financial problems, a 

combination of the abundance of money provided by Congress, 

extraordinary efforts on the part of military financial managers, and 

overwhelming public support for the war clearly overshadowed the 

poor financial preparedness. Those responsible for wartime financial 

management had little to fear because no matter how ineffective they 

were, the money just simply kept coming—backed up by an emotionlaced public.

Nevertheless, World War II established an undeniable necessity in 

war: not only is the abundance of money critical to winning conflicts 

but accountability and effective management of money are just as important. Commanders in the field depend heavily on contractual services and efficient troop payments. Congress depends on the military 

to provide valid cost estimates and to efficiently manage the funds 

provided to execute the war. Unfortunately, during World War II, the 

Finance Department fell short on both accounts.

With the war concluded, the task and challenge for military financial managers were to eliminate the mistakes of the past and prepare 

for the future. However, if in fact the Finance Department accepted 

the challenge, it fell short of the goal since its initial performance during the war in Vietnam showed very little—if any—improvement.

Notes

1. Walter Rundell, Jr., Military Money: A Fiscal History of the U.S. Army Overseas in 

World War II (College Station: Texas A&M University Press, 1980), xii.

2. Ibid., 4.

3. Personal letter from Capt Clarence Neely, identified by Col Louis A. Hawkins. 

Cited in ibid., 37.

4. Rundell, Military Money, 37.

5. Ibid., 142.

6. Interview with Col Grester, 30 March 1954. Cited in ibid., 143.

7. “Historical Report, Detachment Finance Section, Alaska Department”; Col R. 

E. Fraile, adjutant general, Hawaiian Dept., to Distribution D, letter, subject: Prompt 

Payment of Troops, FIN 241, 22 July 1943; and Record Group 338. Cited in Rundell, 

Military Money, 143.

8. Marshall to HQ USAFIME, AMSME, no. 6233, 12 August 43. Record Group 

338. Cited in Rundell, Military Money, 143.

9. Rundell, Military Money, 148–49.
8 │ WORLD WAR II: SETTING THE STAGE

10. Military Intelligence Section, Far East Command, History of the United States 

Army Forces in the Far East, 1943–1945 (Manila, Philippines: US Army, 1974), 99.

11. Col Oliver Williams de Gruchy, chief, Fiscal Branch, HQ Persian Gulf Command (PGC), to command signal officer, PGSC, memorandum, 18 January 1943.

12. Brig Gen L. S. Ostrander, adjutant general, USAFFE, to TAG, letter, subject: 

Discontinuance of Class E Allotments, 6 September 1943.

13. Col L. W. Maddox, chief financial officer, SWPA, to FIS DIR, ASF, letter, subject: 

Progress Report of Fiscal and Finance Activities in SWPA, 8 December 1943.

14. Rundell, Military Money, 207.

15. Ibid., 214.

16. Col R. E. Odell, fiscal director, HQ United States Army Forces in the Middle 

East (USAFIME), for CG, USAFIME, memorandum, subject: Report of Operations, 22 

December 44.

17. Rundell, Military Money, 53–54.

18. House, Congressional Record 89, 78th Cong., 1st sess., 19 June 1943, 6155–56.

19. Alfred A. Abbott, “The Army as Banker,” Army Information Digest 2, no. 8 

(August 1947): 37, http://babel.hathitrust.org/cgi/pt?id=mdp.39015082112494;view

=1up;seq=985.

20. Harry M. DeWitt, Comptrollership in the Armed Forces: A Summary and Comparative Evaluation of Comptrollership in Industry and the Department of Defense with 

Special Reference to Program Management and Management Engineering As Included in 

the Functions of the Army Comptroller (Washington, DC: Institute of Engineering, 

1952), 21.

21. James E. Hewes, From Root to McNamara: Army Organization and Administration, 1900–1963 (Washington, DC: Center of Military History, 1975), 179.

22. Louis C. Seelig, Resource Management in Peace and War (Washington, DC: National Defense University Press, 1990), 23.

23. House, Congressional Record 89, 6707.

24. Walter Rundell, Black Market Money: Collapse of U.S. Military Currency Control in World War II (Baton Rouge: Louisiana State University Press, 1964), 245.
Chapter 2

Vietnam

Repeating Past Mistakes

By the late 1960s . . . public support for the Vietnam War began 

to dissolve. Reflecting the division among the citizens, Congress 

began using its chief power beyond lawmaking—the power of 

the purse strings—to control the operation of the war.

—Louis C. Seelig

Resource Management in Peace and War

Different Folks, Same Strokes!

From a financial perspective, the early days of Vietnam were eerily 

similar to World War II. During March 1965, Secretary of Defense 

Robert McNamara (see fig. 1) promised the service secretaries “an 

unlimited appropriation” to fund operations in Vietnam. He subsequently informed the joint chiefs that they should not “feel any constraints whatsoever—absolutely none.”1

 Based on the joint chiefs’ 

experience in funding previous conflicts, they concluded that the 

secretary had handed them a blank check.

This sentiment also carried over to Congress and the White House. 

The 1965 emergency supplemental funding request overwhelmingly 

passed in the House and the Senate. The day after budget approval, 

Pres. Lyndon Johnson called a press conference and associated the 

speedy congressional approval with American public support to engage in Vietnam. President Johnson informed reporters that US 

troops had a “blank check” as assurance of full national support.2

In an interesting twist, despite previous pronouncements alluding 

to unlimited spending, Secretary McNamara insisted that the war be 

conducted as cost efficiently as possible. McNamara’s cost-reduction 

strategy involved three facets: (1) buying only what was needed; (2) 

buying at the lowest sound price; and (3) reducing operating costs 

through integration and standardization.3

 Despite McNamara’s good 

intentions, these efforts backfired because the policy of “buying only 
10 │ VIETNAM: REPEATING PAST MISTAKES

what we need” resulted in significant shortfalls on the battlefield, particularly when unanticipated escalations in operations occurred.4

Figure 1. Secretary of Defense Robert McNamara briefing the press 

on events in Vietnam. (Photograph VA002823, 26 April 1965, Douglas 

Pike Photograph Collection, The Vietnam Center and Archive, Texas Tech 

University, http://www.vietnam.ttu.edu/virtualarchive/items.php?item=VA

002823.)

Escalations were particularly problematic for the Air Force because the demand for bombs and rockets quickly exceeded the supply. These critical shortfalls reached the point in 1966 where McNamara was forced to ask Congress to reprogram funds to purchase 196 

additional fighter-bombers.5

 Reported shortfalls on the battlefield 

caused scathing attacks on the secretary of defense. In July 1965 Rep. 

L. Mendel Rivers (D-SC), chairman of the House Committee on 

Armed Services, requested that Rep. Porter Hardy Jr. (D-VA), chairman of the Special Investigations Subcommittee, Committee on 

Armed Services, “conduct an immediate inquiry” into the secretary 

of defense’s reduction programs.6

Congressman Hardy’s subcommittee issued a classified report 

identifying shortages in ammunition, rockets, flares, missiles, and 
VIETNAM: REPEATING PAST MISTAKES │ 11

500- and 750-pound bombs that directly hampered combat operations. Committee members focused on the worldwide shortage of 

spare parts, blaming those shortages on McNamara’s “apparent overzealous dedication to economy” at the expense of combat troops.7

Thus, for a brief period, it appeared that McNamara might change the 

course of financial management history that featured large sums of 

money to manage on the battlefield. However, the financial history of 

Vietnam would remain unchanged from that of past conflicts.

With McNamara’s cost-efficiency efforts brushed aside, expanded 

forces, enormous defense budgets, and bloated supplemental requests 

replaced economy and lower defense budgets. The war forced McNamara to increase conventional military strength far in excess of any 

strategic plan, much less his own. Compelled to bow to political pressure, he saw military manpower rise roughly 20 percent, from 2.85 

million in 1965 to 3.4 million in 1968.8

With these increases, the financial pendulum of the Vietnam War 

swung from one end to the other and then back again, but it would 

change even once more. Initially, both the secretary of defense and 

the president assured military leaders that, when it came to financing 

the war, their budget cup would run over—just as it had in the past. 

Upon reflection, the secretary of defense, who detested excess spending, reversed course and insisted that those funds be tightly managed 

and that war spending be heavily scrutinized. In the end, rather than 

self-correct to a position between the two extremes, the secretary 

overreached, resulting in shortfalls in critical equipment and supplies 

on the battlefield. This situation caused the pendulum to swing back 

full circle to the “open checkbook” side of the financial spectrum. 

Thus, financial managers in Vietnam were once again faced with 

managing large sums of money on the battlefield. And still, they were 

neither trained nor prepared to do so.

As Leonard B. Taylor states, “To military financial managers . . . 

Vietnam was a nightmare. It was much like starting out a game of 

baseball with the normal rules and during the third inning, finding 

out that you were playing basketball.”9

 With roughly 20 years to build 

upon the experiences of World War II, it was as though a time warp 

had wiped away those years. As they had in World War II, financial 

managers entered the war assuming that the peacetime rules would 

be sufficient; however, much to their dismay, they were playing the 

wrong game. Poor financial practices were more easily accepted during 
12 │ VIETNAM: REPEATING PAST MISTAKES

World War II because it was total war—do or die—and the entire 

country was behind it. 

Vietnam was a strikingly different conflict than its immediate predecessors. It was a limited war, fought in a single theater, and although 

initial public support was strong, as the war dragged on, public support soured. Moreover, the combination of declining public support 

for the war (for example, see fig. 2) and the Department of Defense’s 

(DOD) inability to manage large sums of money in Vietnam once 

again caused the financial pendulum to overcorrect. With Congress 

inserting itself to pull back on the financial reins, this financial pendular dynamic only exacerbated the problems of financial management during the war.

Figure 2. Veterans for Peace at the March on the Pentagon, 21 October 1967. (National Archives Identifier: 2803434, Local Identifier: 7049-

30, Series: Johnson White House Photographs, 11 11/22 22/1963 1963 

- 1 1/20 20/1969, 1969 Collection LBJ-WHPO: White House Photo Office Collection.)

As was the case in World War II, lack of accountability was the financial Achilles’ heel of Vietnam. In short, between 1965 and 1975, the 

United States spent $111 billion for the Vietnam War ($836 billion in 

2015 dollars), but military financial managers were not prepared to 

track those expenditures.10 A significant roadblock that contributed to 
VIETNAM: REPEATING PAST MISTAKES │ 13

the problem was a policy decision to keep administrative duties and 

personnel to a minimum in-theater.

This policy to reduce combat service-support units resulted in a 

dichotomy for the financial management community. The war demanded a heavy reliance on contract support from local Vietnamese 

vendors, third-country firms, and continental US organizations.11

However, since the DOD had not planned for limited financial personnel in-theater, there was no plan to compensate for the personnel 

reduction. This shortsightedness led to continued frustration over 

the lack of accountability—to the point where the early 1970s showed 

a marked turn in the relationship between the DOD and Congress. 

Having completely lost confidence in the DOD’s ability to account for 

expenditures, Congress exerted its power of the purse to send a clear 

message to the department: no more blank check.

A memorandum issued by Headquarters Military Assistance 

Command, Vietnam (MACV) to all field commanders illustrates that 

the message was received loud and clear: “During fiscal year 1970 

there has been increasing pressure to reduce spending within DOD. 

This has been evidenced by the receipt of actual funding authorizations that are far below previously budgeted requirements. From all 

indications to date, the austere funding limitations will continue for 

the next several years. Accordingly, efforts must be initiated now to 

effect substantial reductions in all elements of cost and to initiate a 

program that will insure the conservation not just of funds, but all 

other MACV resources as well.”12

This inability of the DOD to properly account for funds during the 

war drove a financial wedge of distrust between Congress and the 

department. Perhaps it was the open-checkbook policies of the past 

that caused the DOD to adopt an attitude of indifference toward financial management and war. Either way, Vietnam demonstrated 

that Congress can and will use its fiscal leverage to influence actions 

on the battlefield. If the DOD cannot manage money properly during 

war, Congress will either manage that money for the department or 

withdraw financial support.

An example of financial ineptitude during Vietnam was the management of reimbursements. Typically, a reimbursement occurs when one 

agency provides a service to another and is paid for that service. In the 

case of Vietnam, if the Air Force, for example, provided a service to the 

Army (financially smart because this practice saves duplication and 

overhead costs), the Army would reimburse the Air Force for that service 
14 │ VIETNAM: REPEATING PAST MISTAKES

through a billing process. In Vietnam the combination of the limited 

administrative personnel policy and no effective wartime accounting 

system strangled the reimbursement program at its very core.

The issue of reimbursements was particularly chronic between the 

Air Force and the Army. In “Loss of Army Resources in Support of 

Reimbursable Customers,” a personal memorandum on the subject, 

Gen Dwight E. Beach, commanding general of US Army Pacific, 

stated, “This problem is a matter of command concern at all levels. It 

is apparent that more positive action is required to safeguard against 

the issue of resources without reimbursement. The administrative 

workload involved in documenting issues to reimbursable customers 

cannot justify the Army’s failure to obtain proper documentation to 

support billings. This is another task that must be accomplished. In 

the future, support should not be furnished to reimbursable customers unless they present the required documentation.”13 A June 1967 

message from the Department of the Army to US Army, Pacific, 

warned of an “unwarranted deficiency” and an “unexplainable and 

embarrassing” situation.14

Following an audit that confirmed severe problems managing reimbursements, a full-spectrum review was conducted to strengthen 

financial management systems operating in the Pacific. The review 

uncovered examples such as a $200,000-per-month subsistence to 

the Air Force that had not been billed in over two years. Another involved storage, distribution, and transportation of bulk petroleum 

between the Army and the Air Force, whereby no documentation 

was maintained for two years.15 Again, the root cause can be traced to 

inadequate financial policies and systems in the theater.

In September 1962 Capt Charlie Metcalf, who would later retire as 

a major general, became the first Air Force accounting and finance 

officer assigned in the Republic of Vietnam. He activated that country’s first military finance office at Tan Son Nhut Air Base.16 Before 

Metcalf established a finance office, he was a paying agent attached to 

Clark Air Base, Philippines. Since the Air Force operated on a strictly 

cash basis in those days, he literally had to travel throughout South 

Vietnam making cash payments to Air Force members in the field.17

While establishing his new in-country finance operation, all Captain 

Metcalf had was a two-drawer safe inside a hut with a thatch roof. At the 

time, his top concern was the fact that he literally had to “wing it” in 

terms of procedures and fiscal guidance. He lamented that there were 
VIETNAM: REPEATING PAST MISTAKES │ 15

no established guidelines to operate in a war theater, and he and his 

small staff of five had to write their own procedures as they went along.18

Captain Metcalf related a story involving a loss of funds that he 

will never forget. He was directed to send $25,000 in cash to a paying 

agent at a forward location for payday. To do so, he put the $25,000 in 

a canvas bag and placed it on a helicopter for transport forward. Unfortunately, during the flight, the helicopter crashed into a rice patty 

field. War zone or not, a significant loss of funds is a serious matter—

one that weighed heavily on his mind. However, much to his relief, 

about two weeks later, a gruff looking Army noncommissioned officer showed up at his hut and threw a thoroughly drenched canvas bag 

containing exactly $25,000 in very damp bills on his desk.19

In 1967 Air Force lieutenant Jan W. Brassem, acting comptroller at 

Pleiku Air Base, South Vietnam, found that payments for local contractor support were nothing like those for which stateside training 

prepared him. Since local vendors could not come on base, he had to 

travel to the vendors’ residences for payment. Brassem stated, “There 

is no rush to collect payment. No rush to do more business. There is 

none of the normal business practices, but rather a few cups of tea, 

some light conversation (due to the language barrier), and finally the 

cash payment.”20

Similarly, support of regulatory and physical infrastructure, albeit 

in a war zone, was far less than that required for sound financial operations. When Lieutenant Brassem first arrived in November 1966, 

the finance office was a building with cardboard walls and minimal 

security. As he recalled, “Anyone could put his foot through the cashier’s cage and have access to all the safes.” This concern led to the 

posting of a guard 24 hours a day. Also, current manuals and regulations were “rare” and often “scrounged” from stateside bases.21

The Silver Lining: Military Pay

The first thing a man does when he arrives in Southeast Asia is 

mark his calendar to show the date of his return to the States. 

Next he looks for mail from home. Then he thinks about pay.

—Jan W. Brassem

“The ‘Money’ Man in Vietnam”
16 │ VIETNAM: REPEATING PAST MISTAKES

The payment of troops in the field, although difficult, was largely a 

good news story. However, it must be noted that Vietnam marked the 

beginning of a striking contrast in US war fighting as it relates to 

military pay: the one-year tour. This situation meant that troops generally served in the war zone for only one year rather than fighting for 

the duration, as had been the case in earlier conflicts.

Figure 3. Col J. L. “Jumbo” Evans, Lt Col Sara N. Harris, Capt Cynthia 

Little, Col Farley E. Peebles, Maj Ralph Law, and Lt Col John Fippen 

all holding letters from the governor of the state of Alabama. (Photograph VA061712, n.d., Farley E. Peebles Collection, The Vietnam Center 

and Archive, Texas Tech University, http://www.vietnam.ttu.edu/virtualar

chive/items.php?item=VA061712.)

Vietnam was also unique in that it was tactically fought using 

largely a “base camp” strategy, meaning that troops would deploy to 

the field for specific missions and subsequently return to their base 

camp. Since most base camps were located near South Vietnamese 

towns and contained the full complement of exchange services and 

club facilities, payday was a popular time of the month. The significance of this evolutionary change was that it placed a heightened im-
VIETNAM: REPEATING PAST MISTAKES │ 17

portance on commanders to ensure timely and accurate payment of 

the troops in the field.

As an example of just how popular payday was, Air Force lieutenant colonel John Fippen (see fig. 3), base comptroller at Ton San Nhut 

Air Base, South Vietnam, described the financial picture immediately 

following the Tet Offensive of 31 January 1968—a major North Vietnamese and Vietcong attack on American, South Vietnamese, and 

allied forces—as any other military payday, just busier.22 Despite a major enemy offensive of 70,000 troops, once the primary fighting subsided, the immediate concern of the troops in the field was pay.

The issue of military pay is important for several reasons. First, it 

is vital to understand that as chronic as the accounting problems were 

during the Vietnam War, there were some financial successes. Second, during the conflict, military pay became an issue with which 

field commanders had to deal. Finally, as had been the case in World 

War II, the overall success in troop payments was largely due to the 

extraordinary efforts of military financial personnel.

To be fair, it must be acknowledged that the lessons of World War 

II did not go completely unheeded. For example, several planners 

recognized the complexities of financial management during wartime, particularly in a limited war environment, and began initial 

planning in the late 1950s. The plan was submitted for approval on 18 

February 1960, but by May 1961, nothing had happened. In an attempt to force the issue, senior DOD financial management leaders 

pushed again—but with little success.23 Perhaps the expectation of 

unlimited funding, as was the case during previous wars, was a contributing factor. Either way, the net result was the same as had been 

the case in World War II: financial managers were unprepared to 

meet the challenges of war.

A unique military pay event during Vietnam was the conversion 

from US dollars to military pay certificates (MPC), used in lieu of US 

currency to keep dollars out of the black market. Capt Frank Tuck, 

USAF, assigned as an accounting and finance officer at Cam Rahn 

Bay Air Base in 1967–68, was responsible for making the MPC conversions. Tuck recounts, “The process was to actually ‘lock down’ the 

base and exchange U.S. dollars for MPCs. As new Airmen arrived 

in-country, we would take their U.S. dollars and exchange them. 

When Airmen were due to rotate back to the U.S., we would buy the 

MPCs back with U.S. dollars.”24
18 │ VIETNAM: REPEATING PAST MISTAKES

Captain Tuck described the conversion as very tough because Airmen were constantly moving around the country. He also recalled 

having to strictly account for MPCs under the watchful eye of “resident auditors.” The objective was to conduct MPC conversions for as 

many and for as much as they could and as fast as possible. During 

MPC conversion, Tuck recalls not sleeping for more than 36 hours. If 

for any reason someone had “old” MPCs after a 24-hour period, Airmen 

had to complete a form explaining why. Tuck said, “There were a 

thousand legitimate reasons and 10,000 illegitimate—we heard them 

all.”25 For those assigned to the finance unit, this process was as complicated and tedious as it was unfamiliar. As was the case with many 

wartime financial duties, this was something they never fathomed 

happening and had to learn on the fly.

Despite the MPC conversion, fraud was still a major concern. Captain Tuck related a story involving the funds manager for the Cam 

Rahn Bay hospital. As Tuck was about to complete his tour, local auditors discovered a discrepancy during the hospital cash count. Further 

investigation revealed that the hospital funds manager had in fact 

pocketed portions of the fund. Unfortunately for Tuck, this revelation 

came to light on his very last day in-country. Initially, the auditors 

wanted to “hold” Tuck to complete the investigation, but he was able to 

demonstrate to the auditors that the hospital funds manager had indeed embezzled the money. Concerned that yet another revelation 

might occur, Tuck quickly grabbed his flight back to the United States.26

Another Air Force officer, Capt Edward “Ed” Gunderson, was a 

budget officer stationed at Cam Rahn Bay with Captain Tuck. To replenish cash, Gunderson had to fly to Saigon. Despite the use of 

MPCs, they still maintained US currency to convert MPCs back to 

US dollars for rest and recuperation (R&R) breaks, for personnel returning to the United States, and for other such reasons. The Vietnamese banking facility was affectionately referred to as Fort Knox 

East. Captain Gunderson said, “We would go in the place, get a grocery cart and it was like shopping for money. We would put the 

money in a parachute bag and go to Tan Son Nhut AB, sit along the 

flightline and wait for a flight back to Cam Rahn Bay AB. We didn’t 

even go through the passenger terminal or security. We just talked to 

the pilots and once they recognized our cargo we were let right onboard the airplane.”27

Captain Gunderson also remembered “C” day when the MPC 

conversion took place. Although a first for Gunderson, this MPC 
VIETNAM: REPEATING PAST MISTAKES │ 19

conversion was the second for Captain Tuck. Over time, the original 

MPCs made their way into the local black market. As a result, at an 

appointed hour, a new series of MPCs was issued. The announcement 

of the new series was transmitted via a classified message. Gunderson 

found it ironic that although the announcement was classified, local 

Vietnamese maids were aware of the transition at least a week prior. 

From his perspective, the war literally stopped on each C day while 

the exchanges took place. However, he related that by noon of that 

day, the new series was already showing up in Saigon.28

Captain Gunderson related that MPCs were used for everything, 

including purchases at the base exchange and the clubs. In fact, he 

recalled that breakfast was 26¢; lunch was 60¢; and supper was 45¢. 

He also had to secure Vietnamese dollars to pay local employees that 

worked on base. A frustration for Gunderson was the fact that his 

wing commander was not very interested in financial management. 

While the commander was rightfully focused on operations, even 

when the financial team could get on the commander’s schedule to 

brief the status of funds, he showed little interest. As if things could 

not be worse for two young captains, Gunderson and Tuck worked 

for a comptroller that Gunderson described as “something else.” His 

lieutenant colonel boss would put on Airman stripes so he could 

travel to the Army South Beach and insisted their pickup truck be 

always available so he could get to a card game and drink.29 When I 

asked now-colonel Gunderson, retired, if he felt that the training he 

received prior to his deployment prepared him for duty in Vietnam, 

his answer was an emphatic “absolutely not.”30

Getting the Message: Actions Taken

Something had to give. At the time, the US military essentially 

prosecuted a war within a war: one against the North Vietnamese and 

the other against poor financial procedures. In January 1970 a new 

financial management committee was created. The committee’s recommendations resulted in a reorganization that placed critical emphasis and attention on budget management. Yet another group was 

convened to focus on improving the management of operation and 

maintenance funds. This effort emphasized improving cost-estimating 

techniques in support of the appropriations-development process.31
20 │ VIETNAM: REPEATING PAST MISTAKES

A centralized accounting center was established in Okinawa, Japan, to improve accounting procedures and to compensate for the 

problem of limited financial personnel in country. This development 

was a good step forward but resulted in two steps backward. The US 

system of government dictates that once an appropriation is signed 

into law, it flows from Congress through the DOD to the services and 

finally winds its way down to the unit that spends the money. That 

process allows funds to be obligated (spent), recorded, consolidated, 

and transmitted back up the chain for accountability and control purposes. The following are advantages of this system: expenditures can 

be tracked down to the individual making a purchase, and financial 

transactions can be sorted in various ways to provide real-time expenditure data or, in a word, accountability.

Unfortunately, the DOD abandoned that process in Vietnam. Instead, since there was no wartime accounting system to record expenditures, the central finance office in Okinawa sent “suballotments” of 

budget authority to field commanders for limited purchases. As rudimentary as it sounds, commanders actually had to record purchases 

on the back of the funding document to maintain the balance in the 

account. Then, each month the documents were sent to Okinawa to be 

recorded in the central accounting system. As one can imagine, with 

$50 million suballotted to the field, a ton of documents flowed between Vietnam and the central accounting function each month.32

Another problem was the military stock fund that was used to 

track the costs of supplies and minor equipment. This fund is a revolving account or working capital fund that pays for the supplies up 

front and is subsequently reimbursed by the purchasing agency. Unfortunately, poor inventory and cost controls wreaked havoc on this 

process. The lack of discipline in ordering supplies made forecasting 

inventory virtually impossible. Consequently, sales data were captured neither promptly nor accurately, resulting in cash shortages 

and, at times, an illiquid stock fund.33

At this point, things had reached a boiling point. The financial 

situation was in shambles, and immediate change was needed. In 

1966 the Army took on the financial problems in the Pacific, conducting an in-depth study. The so-called Brooks study was conducted 

under the direction of a steering committee composed of Dr. Robert 

A. Brooks, assistant secretary of the Army for installations and logistics; Gen Creighton W. Abrams, vice-chief of staff; Lt Gen Lawrence 

J. Lincoln, deputy chief of staff for logistics; and Lt Gen Ferdinand J. 
VIETNAM: REPEATING PAST MISTAKES │ 21

Chesarek, comptroller of the Army. The committee recommended 

that all financial management systems in Vietnam be centralized and 

moved from Okinawa to Hawaii. The new Centralized Financial 

Management Agency (CFMA) established updated procedures and 

features that improved the financial management and supply requisition process.34 However, the diversities of supply requirements during a wartime environment strained the system and continued to 

cause errors in accounting.

Lessons Learned

Ironically, many of the financial lessons from Vietnam paralleled 

those of World War II, while others were unique. First, Congress exerted itself in a big way as a primary player in funds management 

during war. In the past, Congress essentially functioned like a rubber 

stamp for defense requests. However, Vietnam taught the DOD that 

financial management during war is a two-way street. Explicitly, Congress will provide financial support only if the DOD can demonstrate 

the prudent use of those dollars.

Second, the social and political complexities and controversies 

surrounding Vietnam resulted in very fragile public support. As such, 

the need for policies and systems that accurately manage funds in a 

battlefield environment was crucial. With public support teetering on 

the edge, any perception of financial waste or impropriety—whether 

real or perceived—could have easily pushed that fragile support over 

the edge.

Third, accounting for expenditures in a war zone is at least as critical as accounting for funds during peacetime. Only accounting and 

tracking expenditures can provide Congress and the public with a 

reasonable assurance of financial stewardship. This approach enables 

the DOD to deliver accurate and auditable war costs that in turn allow Congress to quickly verify and approve budget requests. Also, 

sound internal controls offer a strong hedge against financial abuse, 

protect against fraud, and ensure financial integrity. The millions lost 

through the mismanagement of reimbursements are an example of 

what can happen when fiscal accountability is not strictly enforced.

Fourth, once again, prewar planning was inadequate. Efforts were 

made at senior DOD levels to develop financial contingency plans, 

but such efforts were largely ignored. Moreover, there is little evidence 
22 │ VIETNAM: REPEATING PAST MISTAKES

that any efforts were devoted to preparing those financial managers 

who would actually perform in the war zone. This problem is underscored when one considers that the trend of war fighting is to limit the 

number of administrative personnel in-theater. Therefore, the task of 

planning and readiness becomes even more critical to compensate for 

reduced personnel ceilings. Generally, the problem of preparedness 

and training boiled down to the same issue as it had during World War 

II—focusing on peacetime rather than wartime operations.

Finally, the evolution of war-fighting policies and tactics in Vietnam placed a premium on the importance of military pay. The World 

War II–era “foxhole” environment somewhat lessened the impact of 

troop payments on the battlefield. However, Vietnam ushered in an 

age of convenience to the military members that made payday one of 

their most anticipated events. This change is significant because it 

placed yet another burden on field commanders to ensure accurate 

and timely payments.

If the evolution of warfare were to continue on its path, the next 

war would be limited—perhaps with tentative public support. Further, Congress would demand even more in terms of accountability 

and prudence. Therefore, at the conclusion of Vietnam, it would appear that the DOD could not afford to continue the mistakes of the 

past, lest it risk seriously impeding congressional and public trust.

Vietnam revalidated the idea that the impact of poor financial 

management procedures during war is much more than merely administrative; they exacted a significant price from the DOD. After the 

war, defense spending declined as a total share of gross national product, dropping from 9 percent in fiscal year 1968—the peak-spending 

year in Vietnam—to 5 percent in fiscal years 1978 and 1979.35 While 

much of this decline was certainly due to the postwar drawdown, “the 

failure to be ‘penny wise’ in Vietnam cost the services dearly.”36 Perhaps more importantly, the inability of the DOD to provide prudent 

financial management during the war reversed a once congenial congressional relationship to an adversarial one.

In this review of financial management during Vietnam, we progressed past the point of historical interest to some alarming trends. 

The fact that major financial deficiencies still persisted after 20 years 

of lost opportunities for improvement points out that something was 

terribly awry. Fortunately, our history of warfare would prove accommodating as the United States would not engage in another major 

conflict for another 20 years.
VIETNAM: REPEATING PAST MISTAKES │ 23

As fate would have it, many years later, lieutenant and later captain 

Larry Spencer would work for Colonels Tuck and Gunderson. These 

gentlemen were outstanding leaders and mentors for me and many 

others. Perhaps it was also fate that I would have the opportunity to 

apply the lessons learned from their Vietnam experiences as a financial manager in war. Roughly two decades after Vietnam, the United 

States entered war again. This time, it was Operation Desert Shield/

Storm. This time I was one of those financial managers thrust into 

war. As was the case during World War II and Vietnam, US forces 

were not fully financially prepared to support the war.

Notes

1. SecDef for Service Secretaries and JCS, memorandum,1 March 1965 (quotation), 

folder Official Correspondence: Army Chief of Staff, Close Hold, box 76, H. K. Johnson 

Papers, Military History Institute; Leonard B. Taylor, Financial Management of the Vietnam Conflict: 1962–1972 (Washington, DC: GPO, 1974), 17–18; and Bottomly, Note to 

Control Division, Meeting of Joint Chiefs of Staff and SecDef w/Amb. Taylor, 29 March 

1965 (quotation), folder Vietnam 091 March 1965, box 44, Wheeler Papers.

2. Edward J. Drea, McNamara, Clifford, and the Burdens of Vietnam, 1965–1969, 

vol. 6, Secretaries of Defense Historical Series (Washington, DC: Historical Office of 

the Secretary of Defense, 2011), 90.

3. Memorandum to SecDef for Pres., 5 July 1962, McNamara Public Statement, 

1962, 4:1519; and DOD Instruction 7720.6, Cost Reduction Program Reporting System, 20 January 1964.

4. Joint Logistics Review Board, Logistics Support in the Vietnam Era (Washington, DC: DOD, 1970), 354–70.

5. Drea, McNamara, Clifford, and the Burdens, 510.

6. Rivers to Hardy, letter, 28 July 1965, attached to letter Rivers to McNamara, 28 

April 1966, folder 400, 28 April 1966, box 7, ISA General files, Acc. 70A-6649.

7. Ibid.; and Hardy to Rivers, March 1966, folder SubCte for Spec. Inv. Rpt. on 

Military Shortages, Etc. (Comments on Letter from Hardy to Rivers) box 90, ASD(C) 

files, OSD Hist. (quotations).

8. Office of the Secretary of Defense (OSD), DSS, Selected Manpower Statistics, 

15 April 1969, 7, box 1127, Subject Files, OSD Hist.

9. Taylor, Financial Management, v.

10. Stephan Daggett, Costs of Major U.S. Wars (Washington, DC: Congressional 

Research Service, 24 July 2008), http://fpc.state.gov/documents/organization/108054

.pdf. US Inflation Calculator uses the latest US government Consumer Price Index data 

published on 15 December 2015 to adjust for inflation and calculate the cumulative 

inflation rate through November 2015, Usinflationcalculator.com.

11. Holton E. Blomgren, “Comptrollership in Vietnam,” Army Finance Journal, 

March–April 1967, 12.
24 │ VIETNAM: REPEATING PAST MISTAKES

12. Headquarters United States Military Assistance Command, Vietnam, to all 

units within MACV, chief of staff action memorandum no. 70-44, MACCO-F, subject: 

Conservation of MACV Resources, 8 April 1970. The Army Task Group conducted its 

survey from 25 September to 21 November 1967.

13. Headquarters US Army, Pacific, Message GPCO 26099, subject: Loss of Army 

Resources in Support of Reimbursable Customers, 1 August 1967.

14. Department of the Army, Message DA 818750, subject: Services and Supplies 

Provided Others, 9 June 1967.

15. Comptroller of the Army, memorandum for the chief of staff, subject: Improvement of Accounting Operations in Vietnam and Elsewhere in the US Army, Pacific 

Command (CSM 67-350), 15 December 1967.

16. United States Air Force, “Major General Charles D. Metcalf,” 1 February 

1991, http://www.af.mil/AboutUs/Biographies/Display/tabid/225/Article/106195/maj

or-general-charles-d-metcalf.aspx.

17. Maj Gen Charles Metcalf, USAF, retired, interview by the author, 4 November 2015.

18. Ibid.

19. Ibid.

20. Jan W. Brassem, “The ‘Money’ Man in Vietnam,” Air Force Comptroller 1, no. 1 

(October 1967): 11.

21. Ibid., 13.

22. John W. Fippen, “Combat Support and the Comptroller,” Air Force Comptroller

2, no. 1 (October 1968): 2–3.

23. Taylor, Financial Management, 5.

24. Col Frank Tuck, USAF, retired, to the author, e-mail, 2 December 2015.

25. Ibid.

26. Ibid.

27. Col Edward Gunderson, USAF, retired, to the author, e-mail, 2 December 2015.

28. Ibid.

29. Ibid.

30. Col Edward Gunderson, USAF, retired, phone interview by the author, 6 December 2015.

31. Taylor, Financial Management, 37.

32. Frederick L. Orr, chief, Budget Division, Office of the Deputy Chief of Staff, 

comptroller, Headquarters US Army, Pacific, Department of the Army, and Maj Gen 

Leonard B. Taylor, interview, 3 December 1971.

33. Taylor, Financial Management, 44–46.

34. Briefing, Headquarters US Army, Pacific, 14 January 1969, 1–3.

35. Office of Management and Budget, “Historical Table 3.2—Outlays by Function and Subfunction, 1962–2020,” https://www.whitehouse.gov/sites/default/files

/omb/budget/fy2016/assets/hist03z2.xls; and “Historical Table 10.1—Gross Domestic 

Product and Deflators Used in the Historical Tables, 1940–2020,” https://www.white

house.gov/sites/default/files/omb/budget/fy2016/assets/hist10z1.xls.

36. Louis C. Seelig, Resource Management in Peace and War (Washington, DC: National Defense University Press, 1990), 9.
Chapter 3

Operation Desert Storm

Up Close and Personal

Comptroller General Charles Bowsher said it may be impossible 

to obtain hard figures because of faulty military accounting 

systems. The General Accounting Office cannot determine the 

cost of Operation Desert Storm because none of the military 

services has reliable systems for managing inventories, procurements and expenditures.

—Kevin Power

“Financial Systems Can’t Track War Costs Accurately”

A Ledger in the Sand

The deployment of over 500,000 US troops to Southwest Asia in 

response to Iraq’s invasion of Kuwait was unprecedented. Operation 

Desert Shield/Storm involved more US forces and materiel than did 

the Vietnam War during its peak in 1968.1

 The Air Force flew over 

65,000 sorties and accounted for 31 of 35 kills against fixed-wing aircraft. It is estimated that during the air campaign, “coalition forces 

destroyed over 400 Iraqi aircraft, including 122 that flew to Iran, 

without a single loss in air-to-air combat.”2

Equally unprecedented were the financial challenges associated 

with this high-tech war. From determining the costs of war to transitioning reservists to the active duty pay system, Desert Shield/Storm 

represented a quantum leap in demands for financial management 

during war. Moreover, the conflict helped define war fighting in the 

twenty-first century. As articulated by Cong. Bill Gradison (R-OH) 

during hearings before the Committee on the Budget, “This war 

against Iraq presages very much the type of conflict we are more 

likely to confront in this new security era—major regional contingencies against foes well-armed with advanced conventional and unconventional weaponry.”3
26 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

So how did military financial managers respond to warfare in the 

1990s? Once again, individual military financial personnel performed 

admirably. Nevertheless, once more, they were not fully prepared for 

financial operations when the war began. As painful as the lessons of 

past wars had been, no substantive improvements in training had 

been made. As predicted from the Vietnam experience, Congress demanded accurate accountability and valid cost estimates; however, 

the military financial establishment was neither prepared nor 

equipped to respond.

When Operation Desert Shield/Storm began, it was my turn in the 

barrel. I was comptroller of the 4th Fighter Wing at Seymour Johnson 

AFB, North Carolina. I remember that experience as though it happened yesterday. I took the command flag in July 1990, and on 2 August 

1990, I watched closely as Saddam Hussein’s forces invaded Kuwait. 

Since this command was my first, I had big plans to ensure that my 

squadron was trained and prepared for war, but there was no time.

We were glued to our televisions as talk of war began to ratchet up. 

In response to the Iraqi invasion, on 9 August 1990, our wing deployed four six-ship flights of F-15E Strike Eagle fighter aircraft to 

Thumrait Air Base, Oman. The very next day, maintenance personnel 

set up engine and avionics intermediate-level maintenance facilities, 

and our medics established clinical facilities.

On 25 November 1990 our civil engineers began construction of a 

new base in Saudi Arabia. By mid-December, Seymour Johnson personnel, along with 24 F-15Es and 1,270 tons of equipment, moved 

from Thumrait to Prince Sultan Air Base, Al-Kharj, Saudi Arabia. On 

27 December 1990 more F-15Es deployed from Seymour Johnson to 

Prince Sultan, and by the end of the year, we had two full squadrons 

of F-15Es deployed and ready to fight.

The air campaign began on 15 January 1991, and, unfortunately, we 

lost an aircraft and crew to ground fire. Four days later, an SA-2 Guideline missile shot down one of our F-15Es piloted by the 4th Fighter 

Wing’s operations group commander, Col David Eberly (see fig. 4), 

and his crew member, Maj Thomas Griffith Jr. Both successfully 

ejected from the aircraft and evaded the enemy for two days before 

being taken captive as prisoners of war (POW). Colonel Eberly was 

the senior-ranking allied POW in the Gulf War.4

 He, along with other 

allies from five countries, was repatriated on 5 March 1991.
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 27

Figure 4. Col David Eberly, USAF, a prisoner of war captured by Iraqi 

forces during Operation Desert Storm, salutes the crowd waiting to 

welcome him and other former POWs upon their return to the United 

States. (Record Group 330: Records of the Office of the Secretary of 

Defense, 1921–2008, National Archives Catalog, https://research.archives.gov/id/6473433.)

The loss of an aircrew followed by the capture of two 4th Fighter 

Wing Airmen was devastating. As the operations group commander 

and senior leader in the 4th Fighter Wing, I personally knew Colonel 

Eberly, and he was as fine an officer and gentleman one could ever 

know. However, the loss and capture of one of our own stiffened our 

resolve for nothing less than total victory. As the war progressed, it 

was inspiring to witness thousands of Goldsboro, North Carolina, 

residents show their support of the 4th Fighter Wing.

By war’s end, our F-15Es had flown 2,172 sorties, striking 2,124 

targets in Iraq and Kuwait. These strikes included all-weather night 

attacks, 595 against airfields, communications facilities, and ammunition storage areas. Occasionally working with Joint Surveillance 

Target Attack Radar System aircraft, our fighters conducted 391 

“Scud-hunting” sorties using low-altitude navigation and targeting 

infrared for night in western Iraq. In support of ground forces, we 

conducted 949 strikes using GBU-12 Paveway II laser-guided bombs 
28 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

during “tank-plinking” operations against armored vehicles in the 

Kuwait area of operations.

During the deployment phase of the war, my comptroller squadron 

was in full war mode. I was tasked to deploy several financial “paying 

agents” on the second “chalk” (aircraft sequence) to depart. It is a bit 

hard to imagine now, but I literally had to fill briefcases full of cash and 

checks and send them, along with several noncommissioned officers 

(NCO), off to war. We subsequently deployed several more personnel 

from my squadron.

I remember briefing my team members on their deployment responsibilities. I laid out their duties, which would include making 

on-the-spot payments to local vendors for goods and services, providing fund citations for equipment purchases, responding to inquiries from individual members regarding pay and travel entitlements 

and allowances, cashing checks, and accomplishing basic accounting 

requirements to track obligations for maintaining status of funds and 

reporting back to home station.

Dealing with government funds is very serious, and my team listened intently, especially when discussing fiduciary responsibilities. 

Disbursing agents were appointed on orders to act on behalf of the 

home station accounting and finance officer. They were legally and 

strictly accountable to the home station for cash, checks, and funding 

documents issued to them. Accounting and finance officers are held 

pecuniarily, legally, and personally liable for funds entrusted to them. 

Additionally, the agents are responsible for ensuring that funds are 

used only for those things for which they were appropriated. I was 

particularly concerned that undue pressure could cause a young 

NCO to make an unauthorized purchase.

Take, for example, the case in which a commander wanted to use 

operation and maintenance (O&M) funds to purchase new uniform 

blouses for women due the local customs that prohibited women 

from wearing short sleeves. However, O&M funds are not authorized 

for the purchase of uniform items; rather, a clothing allowance is 

given to members to purchase uniform items. In this case, a very 

young NCO had to explain these rules to a senior commander—

clearly something this person was not accustomed to doing.

I was also concerned that with no deployable accounting system, 

managing accounting “paperwork” would be a nightmare—and it was. 

documents were prepared in-theater in order to make changes to a pay 

account and mailed back to Seymour Johnson for input to the central 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 29

pay account. Thus, the normal time span for information sent via mail 

was often two to six weeks. Relying on trial and error, we started using 

datafax machines that increased processing efficiency considerably.

The officer in charge of my initial deployed cadre was a young accounting and finance officer, Capt Robin Jones from Washington, 

DC. During high school and college, she had worked as a cashier in a 

local Sears store, so she was familiar with managing cash. Additionally, as a lieutenant stationed at San Vito Air Station, Italy, she ran one 

of the largest cash operations in the Air Force that included foreign 

currency exchanges. She also trained enlisted “paying agents” to perform cashier duties at remote locations.5

 Even with her extensive 

cash-management experience, she described the deployment to Desert Shield/Storm as “like nothing I had ever seen or prepared for.”6

When Captain Jones arrived in the theater of operations, she recalled her first reaction as “stunned.” She was particularly struck with 

how desolate the environment was. The main visual she recalls was a 

“huge tent city.”7

 There was not even a facility out of which to operate. 

Eventually, a “finance” tent was constructed with two cashier windows and two desks to process financial documents (see fig. 5).

Figure 5. Cashier windows in the finance tent, Prince Sultan Air Base, 

Al-Kharj, Saudi Arabia
30 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

I routinely spoke with Captain Jones during her deployment. As 

her commander, I was most concerned with two activities that dominated her day: cashing personal checks and paying local vendors for 

goods and services. We were proficient in neither of these duties because those tasks are not performed during peacetime operations. In 

short, the day-to-day financial mission at Seymour Johnson bore 

very little resemblance to the duties of our deployed personnel. Moreover, those individuals had to provide their own security.

I was also concerned about several deployed duties that we did not 

anticipate, such as tracking and reporting assistance-in-kind receipts 

and valuing and reporting gifts received from other governments. 

Since this circumstance was a first for us, there were no established 

procedures in place. Another challenge was delivering timely leave 

and earnings statements (LES) to deployed members. Since many 

deployed personnel were diverted from their original destinations, 

many were not at the location designated on their deployment orders. 

Based on this uncertainty, we were lucky to achieve a 60–70% effectiveness rate. Like many of the deployed challenges, we simply figured 

them out on the fly.

In particular, Captain Jones described vendor payments as a surreal 

challenge: “Since we carried so much cash, I had to be heavily guarded 

while being transported downtown. When I arrived at the designated 

location, as was the local custom, our business was preceded by a few 

cups of tea and some unrelated conversation. And, since I was a 

woman, local businessmen would not accept payments directly from 

me. So, I had to count out the money to one of my enlisted men, who 

in turn would count out the actual payment to the vendor.”8

I was fascinated to hear Captain Jones recollect her first encounter 

with a local businessman. She said the facility looked like any other 

storefront operation, but there was a room in the back of the store for 

business. The vendor’s dress was traditional for men in Saudi Arabia, 

and he had a well-groomed beard. The gentleman was very courteous 

and spoke very clear English. The conversation involved questions 

like the following: How are you doing? Where are you from in the 

United States? And the old reliable, how are you enjoying our weather?

Following the short chitchat that Captain Jones relayed, an obvious break occurred in the discussion that meant it was time to get 

down to business. The vendor presented a voucher outlining the 

terms of the agreement and payment amount. She read over the document very carefully as the vendor anxiously awaited his payment. 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 31

Oddly enough, there was no discussion about not taking payment 

from a woman—it was just understood that would be the case.9

I specifically asked Captain Jones if she was offended by being 

forced to wear an abaya (as many other female military members 

have done since, see fig. 6) and to adjust to a culture that did not afford her the same respect she was accustomed to in the United States. 

Her response was that she was not offended. She expressed that although she did not personally agree with such practices, she did respect that, as Americans, we were guests in Saudi Arabia and as such 

we should respect its customs. As her supervisor, I expected no less. 

However, she did insist that since she had fiduciary responsibility for 

the funds, she would personally count payments to local vendors 

even though the vendor would insist a male NCO recount the payments to him.10

Figure 6. Female military members have adapted to operations in 

Muslim countries, wearing traditional head scarves to adhere to local 

custom. (In this photo by SrA Rylan Albright, USAF, members of the 

Provincial Reconstruction Team–Farah’s female engagement team discuss the outcome of an all-woman shura [meeting] with Abdul Haidari, 

Shib Koh District subgovernor, in Farah Province, Afghanistan, 10 July 

2010, http://usacac.army.mil/CAC2/MilitaryReview/Archives/English/Mili

taryReview_20150430_art001.pdf.)
32 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

During one of our routine phone calls, I asked Captain Jones what 

procedures had been established to replenish cash; I was taken aback 

by her response. She related that getting more cash involved an hourlong drive to Riyadh, Saudi Arabia. Since women were not allowed to 

drive, she enjoyed riding “shotgun” in the front passenger seat. Since 

she was required to wear an abaya, no one ever knew that she was 

“packing” a 9 mm pistol under her garment.11

One of the memories Captain Jones would like to forget is frequently being shocked awake from a dead sleep as incoming munitions launched toward the base.12 As was the standard procedure, the 

sirens would blast, and the entire base populace quickly and efficiently scrambled to the nearest bunker, donned their chemical protective gear, and prayed that the mostly ineffective shelling would 

once again miss the intended targets.

One of the enlisted men working for Captain Jones was SSgt Leonard 

“Skip” Sergent, an exceptional NCO steeped in financial management 

and a joy to work with (see fig. 7). Sergent remembers initially arriving 

at Thumrait, Oman, to face 128-degree temperatures. Upon arrival at 

Thumrait, his team was directed to a large, open warehouse that had a 

scattering of vehicles—a place they called home for the first few days. 

Initially, they used a corner of the building and secured the funds in a 

small safe chained to a large support beam. For added security, they 

surrounded the safe with their cots and slept there each night.13

Figure 7. SSgt Leonard “Skip” Sergent
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 33

The finance team alternated shifts to ensure that someone was 

guarding the safe at all times. A few days later, a larger two-drawer 

safe arrived, and Sergeant Sergent remembers they had to literally flip 

it end over end to get it into the room. Despite being in a war zone, 

the team almost immediately began to make routine financial transactions, primarily consisting of travel advances.14

As an example of the austere conditions at Thumrait, Sergent recalls 

flying on a C-130 transport aircraft to Riyadh, Saudi Arabia, to replenish checks. Upon his arrival, a captain who was the local accounting 

and finance officer met the team. The captain, who obviously was not 

familiar with the austerity at Thumrait, gave them a hard time about 

the condition of their uniforms. Sergent informed the captain that all 

they had at Thumrait was a mop bucket to wash their uniforms.15

Unfortunately, time did not allow Sergent to visit the local laundry 

service. Nonetheless, he did have time to get a quick meal in the dining 

facility before his return flight was scheduled to depart. When he arrived at the chow hall, he noticed a line behind a sign that read “Eggs 

cooked to order.” Out of curiosity, he got in the line and was shocked to 

discover that when it was his turn to order, the cook actually had real 

eggs and not the powered version used at Thumrait. After stuffing himself, he was transported to the departing aircraft by the captain who 

had questioned his uniform’s appearance, and the captain commented 

that he hoped he would never get assigned to Thumrait.16

In December 1990 the 4th Fighter Wing was ordered to redeploy to 

Al Kharj Air Base in Saudi Arabia. When Sergeant Sergent landed at Al 

Kharj, the location was barely habitable. The engineers were just beginning the process to wet and roll clay dirt on top of the sandy soil to form 

the foundation on which to build working and living areas. In fact, there 

was only one visible hard structure on the entire installation.17

Immediately, the finance team was dispatched to the local town of 

Al Kharj to purchase paper plates, cutlery, and so forth for meals. They 

initially teamed with deployed contracting NCOs and were billeted in 

a local hotel until base construction was complete. The finance and 

contracting team members became excited when they heard that Al 

Kharj had a bank on the base since its presence would make replenishing cash much easier—or at least that was the initial impression.18

Sergeant Sergent decided to make a reconnaissance visit to the 

bank to scope out its capabilities. When he arrived, it was nothing 

like he expected or hoped it would be. He actually arrived early before the bank opened and noticed it was a wooden structure with 
34 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

windows that had no bars or doors and, for the most part, appeared 

rickety and unsecure.

At the appointed opening hour, the banker arrived in a station 

wagon with a large suitcase-like container stuffed with cash. He informed the finance team that, since he had no safe or vault in the 

“bank,” he transported the funds to and from work each day. Needless to say, the finance team was disappointed. Although they did 

manage to exchange some foreign currency that day, they had no 

subsequent dealings with the bank.19

Sergeant Sergent noted that things he had taken for granted back 

home, such as secure storage, were not available in the deployed environment.20 As the 4th Fighter Wing comptroller, I had conducted 

deployment exercises designed to replicate the deployed environment. However, the realities of maintaining a 24/7 finance operation 

in an austere location with limited equipment, facilities, security, and 

access to cash proved that our training was not adequate.

Once the finance team members set up shop, their hours of operation were 0700 to 1900, seven days a week. They were happy that the 

engineers had constructed a four-station pay counter with bars and a 

slot to pass paper and currency. Akin to an old bank in the Western 

movies, it was functional nevertheless. When they closed the pay 

window at 1900, they still had several hours of work to balance accounts and to store the funds and pay documents. Daily transactions 

included check cashing, currency exchange, pay allotments, and advance payments.

Sergeant Sergent also noted that initially traveling outside the base 

was actually a blessing in disguise.21 Since in Thumrait they had lived 

in the same room in which they worked, any distraction away from 

the daily routine provided a much-needed break from the more mundane financial transaction duties. However, once settled at Al Kharj, 

the security police allowed them to store their funds in the local armory, boosting their morale considerably.

Like Captain Jones, Sergeant Sergent observed that his deployed 

duties were nothing like he had been trained to perform. For example, 

he described his first visit downtown to pay local vendors as a totally 

new experience. As previously discussed, Captain Jones was not accepted by the local vendors because she wore an Air Force battledress uniform rather than the customary abaya. This arrangement 

led to one of Sergeant Sergent’s more interesting purchases of buying 

250 abayas for the female members of the wing. Additionally, the entire 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 35

finance and contracting team had to adjust to the local custom of 

daily prayers since local vendors would not conduct business during 

those sacred hours.22

While assigned to Al Kharj, Sergeant Sergent recalled a situation 

regarding the donning of chemical warfare suits (fig. 8) that, although 

initially terrifying, turned out to be quite humorous. When hostilities 

began, before bedtime on the first night, deployed personnel were 

instructed to stay close to their chemical gear just in case it was 

needed. Sure enough, the first alarm sounded around 0100. Everyone 

hustled to the bunkers, put on their masks, and ripped open the 

sealed bags containing the prepackaged chemical protective suits. 

Sergent was just completing the donning of his chemical gear when 

he noticed that one of our finance troops, SrA Rick Vestal, was shouting obscenities. Since Vestal had his mask on, it was difficult to ascertain exactly what the problem was. Upon closer inspection, Sergent 

noticed that Vestal’s chemical suit was inside out. Apparently, it had 

been improperly packed. So Sergent and several others quickly, albeit 

not gracefully, got Vestal and his chemical suit squared away.23

Figure 8. US military personnel don partial chemical gear during Operation Desert Storm. (“Chapter 6: The Offensive Takes Shape,” 148–49, 

US Army Center of Military History, 7 June 2001, http://www.history.army

.mil/books/www/www6.htm.)
36 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

SSgt Robert Caldwell was another of our very sharp NCOs who 

deployed shortly after the initial finance contingent. He was a contracting specialist who would team with our deployed finance troops. 

Contracting officer Capt Tim Serfass joined Caldwell. To supplement 

the funds previously transported by finance, I issued Captain Serfass 

an additional $1,750,000 in cash and checks. I was nervous about 

transporting that large amount of currency, so to put my mind at 

ease, we placed the checks in a briefcase and the $250,000 in cash in 

a satchel-like bag entrusted to Serfass.

The flight to the Persian Gulf took two days, but Captain Serfass 

dutifully never let that satchel out of his sight. Each time the plane 

landed, an armed guard was provided. While in flight, he literally 

slept with the satchel as a pillow. Like the others on the finance/contracting team, Serfass described the initial bare base as nothing more 

than a runway. After a tent city was constructed, one of his first purchases was asphalt to cover the sand between tents. He also recalls 

manually tracking expenditures because there was no deployable system to do so.24

Contingency contracting officers (CCO) were required to execute 

contracts in accordance with applicable policy and procedures to sustain war-fighting operations. These demands forced an inexperienced 

acquisition team to mature quickly. This maturation process included 

learning local cultural norms and providing security while concurrently developing business acumen to provide timely and accurate 

advice to deployed commanders.

In other words, Sergeant Caldwell had to grow up fast. The pace of 

operations during the initial deployment was blistering. The finance/

contracting team essentially had to stand-up a new base from scratch, 

a process that began with identifying a bilingual consultant with ties 

to the local community and a guide to help their inexperienced workforce with local customs and courtesies.

The team made contact with the closest US embassy to begin establishing host-nation support agreements and assistance-in-kind 

arrangements. The embassy was also helpful with identifying trusted 

suppliers. The team’s first priority was to procure basic life-support 

items such as food, potable water, shelter, sanitation services, laundry 

and bathing facilities, and force protection. Sergeant Caldwell’s biggest frustration was that his deployment kit lacked the appropriate 

templates and instructions to execute contracts in a timely manner.
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 37

Another frustration arose from the team’s good intentions to consolidate purchases to save money and buy in bulk. Despite their best 

efforts, there were no prewar plans or sufficient information-technology (IT) infrastructure and no means to track consolidated purchases 

on an installation with multiple units assigned from various stateside 

bases. Since each unit deployed with its own funding-accountability 

documents, there was no way to consolidate funding into one account for ordering purposes.

Finally, Sergeant Caldwell was particularly bothered by several 

lapses in ethical behavior among some of his peers. CCOs have an 

obligation to abide by laws and regulations in the conduct of their 

procurement duties. However, Caldwell related that there were several documented cases of CCOs violating their ethical duties and 

regulations by succumbing to the temptation for quick cash.

Sergeant Caldwell also related several examples of just how dangerous it is for contracting and finance teams to operate with large 

sums of money “outside the wire” of base security. In one instance, 

base security was tight, so a request for security escort by the finance/

contracting team was denied. As an alternative, the team—including 

Caldwell and Sergent—was issued handguns to provide their own security. Unfortunately, because there were no holsters for their handguns, the team set out to purchase holsters in town. During the transaction, the team noticed several suspicious gentlemen surveying 

their activity.

Unaccustomed to dealing with potentially life-threatening situations, 

the team had two choices: confront the suspicious characters or run. 

Since they were outnumbered, the team members chose the latter. Like 

sprinters jumping over hurdles, they took off and ran through crowds 

and several outdoor markets with the “bad guys” in hot pursuit. Following an exhaustive run, their pursuers broke off their chase, and the team 

members hustled to their vehicle and returned safely to the base.25

In another incident, Staff Sergeant Caldwell’s love of the National 

Football League nearly cost him dearly. An NFL playoff game for the 

American Football Conference championship between the Oakland 

Raiders and the Buffalo Bills was to be televised locally. As an Oakland Raiders fan, Caldwell scheduled an off-base shopping trip to Riyadh. After shopping, rather than return to the base, Caldwell decided to remain in Riyadh to watch the game. Unfortunately, enemy 

activity was very intense that night. While the base was generally outside the range of enemy munitions, that was not the case in Riyadh. 
38 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

Fortunately, Caldwell survived the night, but he will always remember 

that his Oakland Raiders lost by a score of 51 to 3, that he wore his gas 

mask and chemical suit the entire time, and that coalition Patriot missiles launched constantly to intercept incoming Scud missiles.26

From the very beginning of the deployment and throughout its 

duration, I stayed in constant contact with the senior financial officer 

in the theater, Lt Col Emerson Smith, Ninth Air Force comptroller. 

He had overall responsibility for Air Force financial operations during the war. In an interview with Smith, he relayed that even in 2015 

he still thinks about the unique experience of Operation Desert 

Shield/Storm.27

When asked what kept him up at night during the war, Lieutenant 

Colonel Smith responded it was the lack of experience of deployed 

financial personnel. He was also very concerned about funds security 

and accountability of funds.28 Specifically, in an after action report, 

Smith concluded that the DOD had designed military pay and entitlement systems mainly for fixed installations during peacetime operations. Thus, financial managers found it difficult to provide responsive or flexible support for such a large operation in an austere 

environment plagued by limited communications.29 His report further lamented that finance personnel also encountered challenges in 

such areas as managing assistance-in-kind support from Saudi Arabia and other nations, as well as issues like funding contracts. In these 

areas there were no procedures since this was the first time such programs were used. The inexperience and lack of procedures made the 

job quite difficult.30

Certainly, Lieutenant Colonel Smith had a huge responsibility. By 

October 1990 there were 21 sites staffed with 127 financial managers 

from seven major commands. They held $60 million in funding authority, $5 million in cash, and over $45 million in checks. At the peak 

of operations, monthly comptroller activity exceeded 8,000 partial 

and casual payments and 47,000 personal checks cashed in-theater.31

In my view, the fact that 127 financial managers supported approximately 55,000 Air Force members—nearly a 1 to 400 ratio—is a tribute to the grit and determination of the deployed financial managers.

Following the deployment, commanders and senior enlisted acquisition leaders lamented over a familiar theme in managing money 

during war: wartime acquisition training had not been appropriately 

exercised during peacetime operations. Additionally, deployed CCOs 

did not anticipate the unique challenges of a war zone. For example, 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 39

as contingency preparedness transitioned to hostilities, some contractors simply did not report to work; others were not allowed on 

the base because of the security posture.

During the aftermath of Desert Shield/Storm, acquisition personnel 

continued to struggle with contacting actions. In some cases, it took 

more than five years to settle on payment issues and individual claims 

against the United States. The lessons from our finance/contracting 

teams’ experiences led to a renewed vigor to correct deficiencies. In 

fact, a training program called “Top Dollar” was developed to provide 

robust and realistic training scenarios.

Following the war, I had the opportunity to attend several Top 

Dollar training events. They were very thorough and realistic, including 

a competition among major commands to add a sense of pride and camaraderie. A typical Top Dollar was held in a “tent city” environment 

that pitted finance/contracting teams against each other to solve various 

deployment scenarios. Despite the huge success of the Top Dollar program, after several years it was terminated due to budget cuts.

In addition to deploying my own squadron members, I had to 

concurrently “out-process” hundreds of Airmen from across the 

wing, a task that proved much more difficult than I could have imagined. The large majority of those Airmen had not discussed contingency personal financial management with their families; consequently, they did not have checkbooks. Also, based on lessons learned 

in the past, the Air Force no longer made advance or partial payments. Thus, many of our departing Airmen literally had no money. 

Our wing had practiced deployments dozens of times, but we had 

never actually checked our Airmen to determine their financial viability. However, this was for real—it was showtime—so we had little 

choice other than at least offer limited advance payments to members 

on the deployment line. Since we could not force members to take an 

advance on their pay, though, many arrived in the theater of operations with very little—if any—access to cash.

Alone, this situation may not sound like a big deal. However, when 

our Airmen arrived initially at Thumrait, Oman, many did not have 

money for basic necessities such as toiletries or stationery. Since we 

were in a pinch, several of the deployed senior officers took up a collection and provided temporary loans to those in need. To make matters worse, as our deployed Airmen wrote letters back home requesting blank checks, many neglected to negotiate a “check writing” plan. 
40 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

In other words, checks written at the deployed location took weeks, if 

not months to clear the bank back home.

Similarly, as spouses and family members stateside wrote checks, 

deployed Airmen were unaware of the available balance. As a result, 

unintentional “bad check” writing became a problem that was exacerbated when the 4th Fighter Wing relocated to Saudi Arabia. Today, 

checks are no longer a primary means of monetary exchange; however, 

in 1990, as the wing comptroller, I actually had to conduct training 

sessions in the base theater on checkbook management.

Once our checks and cash arrived in-theater, I turned my attention 

to funding the war effort. Although we would eventually be reimbursed 

for our incremental war costs, accounting for those expenses was another matter indeed. Since there was no deployable accounting capability and keeping in mind we had typewriters on every desk rather than 

a computer, we were literally forced to keep track of expenditures with 

makeshift spreadsheets. So as hundreds of thousands of dollars were 

being spent, those expenditures were captured on hundreds of pay 

vouchers that had to be mailed back to the home station for processing. 

That procedure resulted in stacks and boxes full of pay vouchers that 

we had to input into the home-station accounting system. Compounding the problem was the fact that these boxes were mailed, making an 

accurate and timely count of war costs nearly impossible.

Mounting Congressional Pressure

The great success of the United States in securing allied funding support for the war has been well documented. Allies contributed over $54 

billion toward a total bill of $61 billion. However, not nearly as well 

documented were chronic problems associated with accounting for 

and projecting costs for the war. In fact, the inability of the DOD to 

respond to congressional demands for war-cost data briefly rekindled 

the old Vietnam-era animosities between Congress and the executive 

branch. At one point, under intense congressional pressure, the US 

comptroller general admitted that the Pentagon could not provide accurate war-cost data because of “weak” accounting methods.32 In desperation, the executive branch adopted a policy of nondisclosure.

The reason for the nondisclosure policy was simple—the DOD had 

no other choice. Despite the lessons of Vietnam, little improvement 

had been made to modernize wartime accounting procedures and 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 41

systems. When asked by Congress to look into the problems of DOD 

accounting, Charles A. Bowsher, comptroller general of the GAO, responded, “We do not have anything close to exact figures on war 

costs. I don’t think the Defense Department will come up with accurate numbers because of their weak accounting systems. They will do 

what they normally do—put it on a memorandum and give an approximation. If you expect a detailed accounting of great accuracy, 

you won’t get it.”33 In response, Sen. John Glenn (D-OH), chair of the 

Governmental Affairs Committee, stated in disgust, “We need it [accurate spending figures] for making decisions. It’s prudent to keep 

track of the bills so we don’t get trapped like we did after Vietnam. 

Last year we asked you [the GAO] to look at DOD’s accounting system, and the Air Force system, to put it mildly, was a mess. Can’t we 

get good figures?”34

Needless to say, the inability of the DOD to report war costs accurately and the subsequent nondisclosure policy caused a furor in 

Congress. Cong. Leon Panetta (D-CA), chairman of the House Budget 

Committee, responded by calling the nondisclosure policy “a very big 

mistake at a very crucial time. . . . Only when the people understand 

what they are being asked to do will they unify in the long run behind 

our efforts in the Persian Gulf. The American people cannot decide to 

pay the price unless they know what the price is, in lives and dollars.”35

In the end, Congress exerted its power by enacting legislation that 

forced the DOD to provide monthly reports on war costs.

A direct result of inaccurate war-cost projections was the inability 

to develop a plan for equity of allied contributions. In other words, 

once US allies were on board to help defray the costs of the war, a 

determination should have been made concerning which countries 

should pay what portion of the bill. The Saudis, for example, were 

receiving about $70 billion in oil revenues as a direct result of US intervention in the war. Based on those facts, perhaps the Saudis should 

have been billed based on that direct benefit. Similarly, Japan received 

nearly 70 percent of its oil from the Persian Gulf.36

During a 4 January 1991 House Budget Committee hearing, Cong. 

Jerry Huckaby (D-LA) stated, “What would be a fair share for the 

Saudis to pay, for Kuwait to pay, for the Japanese to pay, for the Germans to pay? Shouldn’t we have a policy rather than just sending the 

Vice President around, hopping from here and there and saying, 

‘Would you please give us some more money?’ Shouldn’t we be able 

to elucidate and specify, this in our opinion is your fair share?”37 The 
42 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

sad truth is that it was virtually impossible to develop a fair-share 

policy because the DOD could not accurately determine the costs.

In defense of the DOD, poor accounting methods aside, Desert 

Storm clearly highlighted that modern-day warfare is very expensive 

and that projecting costs for such conflicts is difficult. Early estimates 

of the first day of the air campaign ranged from $500 million to $1 

billion. During the first 24 hours of the war, thousands of 2,000-ton 

hard-target bombs were dropped at a cost of $11,000 each. Also, 

about 100 sophisticated Tomahawk cruise missiles were launched at 

$1 million each. Fortunately, a substantial Desert Storm cost—jet 

fuel—was borne by Saudi Arabia. However, considering the fact that 

the full cost of operating a single F-15 fighter can be as high as $1,200 

per hour, the expenses were staggering.38

More Problems in Accounting

Figuring out the funding for multiservice, common-use support 

functions and facilities such as Stars and Stripes distribution, certain 

medical supplies, port handling, and so forth were equally deficient. 

The lack of a centralized funding source for common-user, in-theater 

support required each service to identify a funding source and attempt 

to swap funding documents between services.39 Since there had been 

no prewar plan or training to facilitate common-user or commonsupport activities, wasted equipment and money were the result.

For the Air Force, tracking assistance-in-kind support and gifts 

from foreign governments exposed a particularly troublesome problem.40 During the war, financial agents were tasked to value and track 

assistance-in-kind provided by foreign governments. Donations such 

as the lease of buildings, facilities, food, and fuel were crucial to the 

war effort and politically sensitive to Congress. However, this tracking was a tall order for financial agents, many of whom were not familiar with assistance-in-kind procedures. With no prior training or 

guidance, most were unprepared for the task.

More Problems with Pay

Pay and allowances for reservists during the war were—to put it 

mildly—a challenge. In fact, most reserve Soldiers called to active 

duty in support of Operation Desert Shield/Storm experienced some 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 43

pay-related problems. Also, due to such oversights as excessive pay 

advances at the mobilization station, liberal casual pay policies, and 

the lack of a finance data system to track and record such payments 

on the battlefield (all reminiscent of the situation during World War 

II), a Defense Finance and Accounting Service (DFAS) study estimated that 35 percent of all reservists released from active duty after 

the war were indebted to the government.41

A GAO audit conducted after the war focused on the fact that activated reservists at each of the five installations visited by the auditors complained of not receiving timely pay and travel reimbursements. A major contributing factor was that many active duty 

installation finance offices were neither staffed nor trained to handle 

the increased workload of the new reservists. Also, the audit noted 

that the reserve units’ support personnel, who would normally provide such administrative services for the unit, were not activated.42

In another twist, for some reservists the errors in military compensation paled in comparison to the personal financial losses experienced from abandoned businesses back home. Dr. John Roane, a 

reserve lieutenant colonel and gum-disease specialist from Houston, 

Texas, remembers a colleague calling Operation Desert Storm “Desert 

Screw.” The colleague’s eight-month stint in the desert cost him his 

$250,000-a-year periodontal practice, $20,000 in legal bills, and his 

good credit rating. Those practitioners, many of whom had no more 

than three days to report for duty, were forced to scale back services, 

close their businesses entirely, terminate employees, and/or pay 

steeper unemployment insurance.

Of the 30 doctors based at Wilford Hall Air Force Medical Center 

at Lackland AFB, Texas, who resigned from the Air Force Reserve 

after the war, 27 stated they left to avoid the risk of another financial 

loss. Also, in the Air Force the number of Reserve doctors dropped 

from 349 in September 1990 to 221 two years later. Similarly, the 

number of Air Force Reserve dentists dropped from 119 to 102 during the same period.43

The point is that the president called up over 200,000 reservists for 

active duty to support the war. However, the military was unprepared 

financially to accept them. With no comprehensive plan to convert reservists to the active pay system, most found themselves in either one 

of two undesirable situations: over- or underpaid. Thus, many were in 

substantial debt to the government following the war. Furthermore, the 

personal financial loss to professional reservists, such as physicians 
44 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

and pilots, indicated that little financial planning was provided to reservists prior to the war.

Pay for those already on active duty was also not immune from problems. By December 1991, the total debt owed to the government due to 

overpayments of active duty members reached nearly $80 million. 

Some members of Congress lamented “that so many individuals could 

be overpaid by such a large aggregate amount.”44 In a personal message 

from Gen Norman Schwarzkopf, US Army, commander, US Central 

Command (USCENTCOM), to Gen Carl E. Vuono, the Army chief of 

staff during the war, he complained of problems with military pay support and indicated that Soldiers in the field were “suffering” because of 

it. General Schwarzkopf requested that General Vuono “weigh in” on 

the problem and reiterated that “our soldiers deserve 100% accurate 

pay each month.”45

Congressional conferees blamed the problems with pay on the 

“turmoil” associated with contingencies like Desert Shield/Storm. 

Additionally, Congress pointed the finger in an all-too-familiar direction: “The conferees note that Department of Defense finance officials, and not service members, appear to be responsible for the majority of the overpayments.”46 In fact, during Desert Storm, 11,775 

Airmen were overpaid an amount of $7.4 million. All told, the DOD 

overpaid 198,078 service members nearly $80 million.47

A lack of understanding of pay and entitlements was a significant 

contributing factor to the problem with troop pay on the part of Air 

Force members. For example, basic allowance for subsistence (BAS) 

is paid to enlisted members who live with their families or those who 

are single but are authorized the allowance-in-kind for not using the 

government dining facility. Members with families invariably look at 

this allowance as part of their normal compensation. When they were 

sent to Desert Shield/Storm and provided government meals at no 

cost, their entitlement to BAS was terminated, resulting in a reduction in take-home pay. Many of them did not understand this denial, 

and some found that their families could not make ends meet without this anticipated money.48

Lack of Planning for Victory

At this point, the absence of training and preparedness for war in 

the financial community should be obvious. Not as obvious, but 
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 45

equally as critical, was the lack of preparedness for victory. When hostilities were officially declared over, the chaos of redeployment was rivaled only by the initial deployment. As troops began to return to home 

stations in droves, most of them understandably had one thing in 

mind: going home on leave to be with family and friends (fig. 9). However, if a member failed to “process” through the local finance unit (and 

many failed to do so), the myriad of combat-related pay entitlements 

continued to accrue. Therefore, upon return to the home unit from an 

extended leave period, a number of personnel faced the unpleasant reality of having those payments deducted from their paychecks.

Figure 9. SSgt Robert Caldwell returning from Operation Desert 

Storm to Seymour Johnson Air Force Base

To head off this problem for the 4th Fighter Wing, I requested, and 

was granted, permission to board each returning airplane just prior to 

passenger departure. Since waiting families were anxious to see their 

returning loved ones, I had less than five minutes to make my case. 

Regardless of the day or time of passenger arrival, I set up finance tables 

and implored returning members to take five minutes to ensure that 

their leave and pay were correct before departing for extended leaves.

Fortunately, the majority of our returning troops accepted our offer of assistance. I vividly remember hundreds of returning 4th 
46 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

Fighter Wing members hugging their families and heading straight 

for the finance tables. This practice worked well for our unit, but it 

was developed on the fly. Nothing in our training suggested that we 

offer this assistance. Consequently, because many other bases did not 

adopt this practice, hundreds of troops were indebted to the government following leave.

Determining the cost of redeployment was as difficult as tracking 

deployment costs. For example, damaged equipment returned from 

the war needing repair or replacement was chargeable as a Desert 

Storm expense. However, there were few mechanisms in place to record those expenses. Also, equipment left behind in Saudi Arabia 

could be replaced with Desert Storm funding. But again, there was no 

accurate method of tracking and validating those replacement costs. 

From a budget perspective, it was difficult to separate Desert Storm 

costs from normal operational costs.

Working the Issues: Actions Taken

In response to concerns raised by USCENTCOM during the war, the 

director of DFAS established a pay support evaluation team (PAYSET) 

to review the support provided to USCENTCOM, identify systemic 

problems, and make recommendations on how to resolve the issues. 

Of particular concern to the team were reported delays in refunding 

federal and state taxes withheld, the lack of proactiveness and responsiveness by the stateside finance community in providing policy guidance and procedures, the lack of an in-country pay-change input capability, and the timeliness of implementing war-pay entitlements.49

While the PAYSET addressed several financial issues in detail, two 

were particularly critical to improvements in the future. First, the 

military pay system that supported thousands of deployed troops 

during the war was a nondeployable computer system. Therefore, pay 

changes and updates were made the old-fashioned way—mailed back 

to home stations where automation support was available. This practice was a particular problem when troops received casual or partial 

payments in the theater that did not update until several months later. 

In some cases, the collection action for those payments was delayed 

until after the individual had separated from service, making actual 

collection action difficult to complete.50
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 47

Second, the war clearly demonstrated the need for orchestrated 

planning across the finance spectrum, including both deployable and 

sustaining base organizations.51 Although contingency plans existed, 

no comprehensive financial war plan bridged the services with DFAS, 

the operators, and the IT community. In other words, the hundreds 

of financial personnel that deployed to the Persian Gulf came with no 

comprehensive plan. Little coordination existed across the financial 

community to ensure continuity of policies, nor was there a plan for 

joint financial operations.

The Air Force conducted a similar review after the war and found 

many of the same problems. First, the Air Force flatly admitted there 

was an overall lack of prewar preparation and training. When the war 

began, the Air Force generally deployed paying agents that were experienced primarily in military pay and travel functions. Therefore, 

these agents were oftentimes unprepared to deal with senior commanders on sensitive fiscal policies. Some also lacked experience 

with vendor payments, working with contracting officers, accounting 

for funds, and oversight of morale, welfare, and recreation. Moreover, 

the deployment scheme was disjointed, causing some locations to be 

short of financial personnel while other locations had too many.

Second, guidance (or the lack thereof) from higher headquarters 

was problematic. Direction regarding fiscal issues often came from 

multiple sources, including US Central Command Air Forces, major 

commands, DFAS, and home-station commands. Additionally, such 

guidance was oftentimes late, incomplete, and/or inconsistent, creating conflicts and confusion.52 Thus, in the absence of a reliable single 

source of information, paying agents were frequently left to their own 

devices in determining the legalities of financial transactions and establishing financial operational procedures.

Prior to Operation Desert Shield/Storm, I had not read the financial histories of previous wars. Following my tour at Seymour Johnson AFB, I attended the Industrial College of the Armed Forces 

(ICAF), where I had the opportunity to do just that. As I read the financial histories of previous wars, I was taken aback by the similarities 

of the historical challenges to those I had just faced. I wondered why 

my training had not included those lessons learned. I was disappointed 

that we literally had to rediscover solutions to financial wartime issues 

that had occurred in the past. Above all, I wondered if the next generation would make the same mistakes during the next war.
48 │ OPERATION DESERT STORM: UP CLOSE AND PERSONAL

Notes

1. Spencer Tucker, Encyclopedia of the Vietnam War: A Political, Social, and Military History (Santa Barbara, CA: ABC-CLIO, 1998), 425. Tucker puts forth the figure of 

525,000 in Vietnam in 1968.

2. Task Force Enduring Look, United States Air Force, Air Force Performance in 

Desert Storm (Washington, DC: DOD, April 1991), 2, http://www.dtic.mil/dtic/tr

/fulltext/u2/a235941.pdf.

3. House, Hearing before the Committee on the Budget, 102nd Cong., 1st sess., 27 

February 1991, 6.

4. Michael Wines, “After the War: P.O.W.’S; Ex-P.O.W.’S Offer Accounts of Terror 

and Torture in Iraq,” New York Times, 15 March 1991, http://www.nytimes.com/1991

/03/15/world/after-the-war-pow-s-ex-pow-s-offer-accounts-of-terror-and-torture-in

-iraq.html.

5. Robin Jones, to the author, e-mail, 16 October 2015.

6. Robin Jones, telephone interview by the author, 16 October 2015.

7. Ibid.

8. Jones, e-mail.

9. Robin Jones, telephone interview by the author, 21 October 2015.

10. Jones, telephone interview, 16 October 2015.

11. Ibid.

12. Ibid.

13. Leonard “Skip” Sergent, to the author, e-mail, 10 June 2015.

14. Ibid.

15. Ibid.

16. Ibid.

17. Jones, telephone interview, 16 October 2015.

18. Ibid.

19. Sergent, e-mail.

20. Ibid.

21. Ibid.

22. Ibid.

23. Ibid.

24. Timothy Serfass, telephone interview by the author, 29 October 2015.

25. Robert Caldwell, to the author, e-mail, 18 October 2015.

26. Ibid.

27. Emerson Smith, interview by the author, 10 November 2015.

28. Ibid.

29. Ibid.

30. Ibid.

31. Office of the Secretary of the Air Force (Financial Management), “Financial 

Management and Comptroller Desert Shield/Storm Lessons Learned Action Items,” 

memorandum, 13 August 1991.

32. William Hershey, “War’s Cost Cannot Be Calculated,” Philadelphia Inquirer, 24 

January 1991, 11, http://articles.philly.com/1991-01-24/news/25819990_1_war-endswar

-cost-korean-war.
OPERATION DESERT STORM: UP CLOSE AND PERSONAL │ 49

33. Kevin Power, “Financial Systems Can’t Track War Costs Accurately,” Government Computer News, 4 February 1991, 8.

34. Ibid.

35. Quoted in Fred Kaplan, “White House Refuses to Disclose Desert Shield Costs 

to Congress,” Boston Globe, 7 January 1991, 9.

36. Jim Sasser, “Is Uncle Sam Getting Stiffed?,” New York Times, 19 December 1990, 

25.

37. House, Hearing before the Committee on the Budget, 102nd Cong., 1st sess., 27 

February 1991, 4 January 1991, 20.

38. Karen Riley, “1st Day of Desert Storm Cost at Least $500 Million,” Washington 

Times, 18 January 1991, 7.

39. Joint Universal Lessons Learned (JULLS) report no. 62163-79755, Centralized 

Funding of Contingency Operations, 26 June 1991. The author personally dealt with this 

issue as comptroller for Air Combat Command—specifically for deployed Air Force 

members at Diego Garcia.

40. Office of the Assistant Secretary of the Air Force (Financial Management), “Financial Management and Comptroller Desert Shield/Storm Lessons Learned Action 

Items,” memorandum, 13 August 1991.

41. “Most Desert Storm Reservists Experienced Pay Problems,” Army Reserve Magazine, iss. 4 (1991): 7.

42. General Accounting Office, Operation Desert Shield: Problems Encountered by 

Activated Reservists, Report GAO/NSIAD-91-290 (Washington, DC: GAO, September 

1991), 7.

43. Soraya S. Nelson, “We Were Just Forgotten: Doctors Say Desert Storm Wrecked 

Them Financially,” Air Force Times, 18 October 1993, 22.

44. House, National Defense Authorization Act for Fiscal Years 1992 and 1993, 

Conference Report to Accompany H.R. 2100, report 102-311, 557–58.

45. USCINCCENT to HQ DA, message 092000Z, April 1991, subject: Army Pay 

in-Theater.

46. House, National Defense Authorization Act, 558.

47. Defense Finance and Accounting Service, “Desert Shield–Desert Storm Servicemembers’ Indebtedness,” 19 December 1991, 8–9.

48. Office of the Assistant Secretary of the Air Force (Financial Management), 

“Lessons Learned Action Items.”

49. Defense Finance and Accounting Service, “Pay Support Evaluation Team 

(PAYSET) Concept of Operations,” interoffice memorandum, 25 April 1991.

50. Pay Support Evaluation Team (PAYSET), US Army, Military Pay Support to the 

Army: Operations DESERT SHIELD/STORM, August 1990–June 1991 (Washington, 

DC: DOD, 1991), http://www.dtic.mil/dtic/tr/fulltext/u2/a251327.pdf. I had personal 

knowledge of this practice as comptroller for Air Combat Command, responsible for 

processing manual payments for individual members.

51. Ibid.

52. Office of the Assistant Secretary of the Air Force (Financial Management), 

“Lessons Learned Action Items.”

Chapter 4

Operations Enduring Freedom

and Iraqi Freedom

Shock and Awe

Following Operation Desert Shield/Storm, I was reassigned from 

Seymour Johnson AFB to attend the ICAF in Washington, DC. Weary 

but better for the experience, my deep involvement in Operation 

Desert Shield/Storm was as draining as it was exciting. Having entered the Air Force as the Vietnam War was winding down, I had 

completed nearly 20 years of service, a full career for most members, 

without even talk of a serious conflict. Thus, I reasoned that Desert 

Shield/Storm was the contingency operation of my generation and 

that I could get back to business as usual—training for a war or contingency that surely would not come during the remainder of my career. I reasoned wrongly.

After I graduated from the ICAF, I served three successive tours outside the comptroller career field: assignment to the White House; mission support group commander at Tinker AFB, Oklahoma; and wing 

commander at Hill AFB, Utah. Thus, when I arrived at Langley AFB to 

serve as the Air Combat Command (ACC) comptroller, I had been out 

of the financial management business for six consecutive years. Having 

participated heavily in the development of lessons learned following 

Desert Storm, I felt confident that the problems I encountered during 

that war had been corrected. Once again, I was wrong.

Operations Enduring Freedom (OEF) and Iraqi Freedom (OIF) 

put me squarely in the midst of yet another major war. On 19 March 

2003 at 2215 EST, I was glued to my television as Pres. George W. 

Bush announced to the world that US and coalition forces had begun 

military action against Iraq. By 1215 EST the following day, antiaircraft fire could be seen rising in the skies above Baghdad. Within an 

hour, huge explosions began rocking the Iraqi capital, as the Pentagon announced that “A-Day” was under way. The campaign was intended to instill “shock and awe” among Iraqi leaders, and air strikes 

were launched at hundreds of targets in Iraq. CNN correspondent 

Wolf Blitzer reported that in his 30 years of experience, he had never 

seen anything on the scale of the attack.1
52 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

At once my stress level began to rise as I harkened back to those 

war days at Seymour Johnson AFB. At an Air Force wing, I experienced war from the tactical level. Now, I would do so at the strategic 

level. During Operation Desert Shield/Desert Storm, I literally 

worked around the clock solving financial issues—OEF/OIF would 

be no different. Ironically, my wing commander at Seymour Johnson 

during Operation Desert Shield/Desert Storm, Col Hal Hornburg, 

was now General Hornburg, my major command commander. This 

war would be our second together.

During the buildup to the war, I had prepped my staff and (ACC) 

wing comptrollers on what to expect. I also visited Shaw AFB, South 

Carolina, home of our Ninth Air Force (AF), which would be front 

and center in the conflict. More specifically, I visited Lt Col Robert 

Blair, Ninth AF comptroller, and his assistant Capt Shylon “Shy” 

Ferry, who, although junior in rank, had been seasoned through numerous previous deployments. I did not realize it at the time, but this 

young captain would turn out to be one of the true financial heroes of 

the war.

Lt Col Emerson Smith was the primary deployed financial manager for Operation Desert Shield/Desert Storm, but Colonel Blair 

filled that role during OEF/OIF. When Blair arrived at Ninth AF, he 

had a staff of five people. After 9/11, his Ninth AF staff quickly grew 

to 12—with another 50 deployed to the theater. When he deployed, 

the primary activity he witnessed by financial managers was cashing 

personal checks and supporting contracting officers making local 

purchases of services and equipment. Since many of the deployed locations did not have electronic payment options, he was unnerved by 

the sheer number of cash transactions each day.

Colonel Blair said that the “one hard truth we quickly learned was 

that the Air Force and home station training for deployed duties was 

woefully inadequate.”2

 He believed that the root cause of this lack of 

preparedness was the fact that instructors with little, if any, actual 

deployment experience provided home-station training. To supplement the training deficit, Blair and his staff travelled throughout the 

area of responsibility (AOR), providing on-the-spot training, most of 

which covered cashier and account-balancing duties.3

When the United States suffered the brutal 9/11 attack, Captain 

Ferry was deployed to Exercise Bright Star, held every two years in 

Egypt. Bright Star is a series of combined and joint training exercises 

led by US and Egyptian forces. Specifically, it was designed to strengthen 
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 53

ties between the Egyptian military and USCENTCOM and to 

demonstrate/enhance the ability of the United States to reinforce its 

allies in the Middle East in the event of war. At the time of her deployment, Captain Ferry had no idea that unfolding world events 

would test that capability in real time. In the midst of the exercise, 

Bright Star quickly transitioned to direct support of OEF. As such, 

Egypt became a staging area for transporting equipment forward to 

the Middle East.4

Figure 10. Exercise Bright Star. Traveling at a speed of 300 knots (from 

left to right), an Egyptian F-16, a US Marine AV-8B Harrier, an F-18, and a 

French Mirage 2000 fighter attack jet fly over the Great Pyramids of Giza 

as part of a coalition fly-by during the exercise. (Photo by Cpl Chad H. 

Leddy, US Marine Corps, http://osd.dtic.mil/home/images/photos/2005-09

/index/Hi-Res/1_hires.jpg.)

The Bright Star exercise was scheduled from August to October, 

but based on the onset of the war, Captain Ferry remained through 

the end of December. Since Ninth AF would run the “air war” in Iraq, 

Ferry was thrust right back into the fight when she returned to Shaw 

AFB. When she reported back home, the staff was mobilizing to deploy forward. Between December and April, I worked with both Colonel Blair and Captain Ferry to identify 120 financial managers from 

Air Force bases around the globe to prepare for deployment to 16 

various Middle East locations.5
54 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

When Captain Ferry initially deployed forward, she was assigned 

at Headquarters US Central Air Forces (USCENTAF) forward in Kuwait. When she hit the ground, the work pace was brutal. What little 

sleep she could get was in a tent, but most of her nearly 24-hour day 

was spent working out of a small trailer. Her initial duties included 

purchasing services and equipment from local vendors. As mobilized 

forces began to trickle in, she literally moved from location to location, filling in until assigned financial managers arrived. Additionally, 

Captain Ferry became the “on call” trainer in the AOR and was frequently called upon to conduct staff assistance training for arriving 

financial managers who were struggling to operate in a war zone. In 

all, Ferry made the rounds to Kuwait, Qatar, Oman, the United Arab 

Emirates, and Saudi Arabia.6

Figure 11. Capt Shylon “Shy” Ferry, USAF, receives an award from Lt 

Gen T. Michael Moseley

Captain Ferry lamented that “everything was manual. Most financial transactions, like travel vouchers, pay updates, and allotments, 

had to be boxed-up and shipped back to Shaw AFB.” During assistance visits, she recalls finding “deployed financial managers struggling with cashing checks, foreign currency exchange, and tracking 

assistance-in-kind from allied nations. The fact that wartime finan-
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 55

cial management is so much different than peacetime operations was 

a real problem.”7

 This situation reminded me of the famous Yogi 

Berra quotation “It’s like déjà vu all over again.”

I was surprised to discover that, as was the case in Operation Desert 

Shield/Desert Storm, financial managers all around the continental 

United States (CONUS) still filled briefcases with cash and checks for 

the long trip forward. Portable safes, self-security, austere conditions, 

and insufficiently prepared deploying financial managers all mirrored 

my experience nearly 10 years earlier. Nothing significant had 

changed. Deployed commanders were issued funding limitations, 

and financial managers had to track expenditures manually. The 

problem was that our financial training had not prepared deploying 

financial managers to carry out these wartime tasks.

Same Old, Same Old

During the war, I frequently visited Shaw AFB. During one of my 

trips, I visited the 20th Fighter Wing comptroller squadron and was 

stunned. I was taken to a room filled to the ceiling with boxes full of 

financial documents that had been mailed back from the theater. Several junior enlisted financial managers told me that the sheer volume 

of work and the difficulty of the task exasperated them. They were 

concerned that many of the financial documents had been hastily 

prepared overseas and were very difficult to read and interpret. To 

make the point, they showed me a routine purchase request. Despite 

using my best interpretive imagination, I could not figure out what 

had been purchased or how much had been paid.

This predicament caused late payments that resulted in some very 

unhappy customers. In one case a major airline providing charter 

service to and from the theater of operations threatened to cease 

flights unless it received immediate payment. Again, the documents 

regarding the flights were late arriving to Shaw AFB and were nearly 

impossible to interpret. To help with the issue of legibility, we dispatched Captain Ferry to the theater to provide immediate training 

to agents in the field. To help ease the local workload, I directed the 

temporary assignment of additional financial managers to Shaw AFB, 

significantly improving operations.

Lt Col Stephen Tye was the comptroller squadron commander at 

Shaw. As recipient of the mountain of financial documents from the theater, Tye was frustrated that many of the deployed financial managers 
56 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

were skilled in budget, military pay, and travel pay functions back at 

their home stations but inexperienced with deployed cash-disbursing 

duties, vendor payments, or foreign currency exchanges: “The crux of 

the finance support in the AOR was performing as a conduit between 

the commander and local contractors. This was very difficult for 

young financial managers who were inexperienced with complicated 

contracts. With the combination of a lack of experience and a dynamic environment, it’s a wonder how our deployed folks didn’t have 

more Anti-Deficiency Act Violations (the act prohibits exceeding 

funding limits).”8

Lieutenant Colonel Tye lamented that, from a training perspective, the guidance and experience that financial managers received 

from their home-station units just was not sufficient in a wartime 

environment. I could tell that he was frustrated with the sheer volume of documents his squadron received each week. Missing documents and poorly prepared forms compounded that frustration. His 

disgust reached the point that he requested and was granted permission to deploy his own squadron members to the AOR to provide 

hands-on training and lessons learned.9

As I drove back from Shaw to Langley AFB, something that bothered me about the mountain of documents suddenly became clear: 

we had exactly the same problem during my experience during Operation Desert Shield/Desert Storm. As it turned out, the folks at 

Shaw came up with exactly the same solution. Rather than rely on 

mail, they started scanning and faxing the documents. This simple 

change reduced document processing time from months to days. I 

specifically remembered documenting this problem in my Operation 

Desert Shield/Desert Storm lessons-learned report, but apparently 

the lessons had been either lost or disregarded. 

As a result, we relived the same mistakes and lost a lot of time. For 

example, personnel assigned to Camp Snoopy, Qatar, accumulated 

documents and cashed checks until a UPS box was full enough to 

mail—a practice that could take weeks. Also, in some cases the packages were misrouted, arrived “compromised,” or did not arrive at all. 

As one can imagine, this process wreaked havoc on individual member’s checkbook balancing. The new system (that should have been 

the initial one) resulted in cashed checks being scanned and processed in less than a week.

During the war, a deployed commander sent an emergency e-mail 

to the USCENTAF commander concerning the fact that many of his 
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 57

deployed Airmen’s pay entitlements had not been started, a problem 

that would affect their W-2 forms. This error was caused by simple 

tactical exchange of data between finance and deployed Airmen assigned to Personnel. In a comedy of omissions, deployed personnelists failed to notify the finance office of those arriving in-country, and 

deployed financial managers simply did not bother to ask. Consequently, several general officers, senior executive service officers, 

colonels, and others spent countless hours at home stations sorting 

through and processing the appropriate tax information.10

I was one of those colonels working this matter and many other 

financial issues. Frustrated over the lack of progress since Operation 

Desert Shield/Desert Storm, I was determined to do something about 

it. Working with the Ninth AF staff, we created a one-week predeployment course—the Southwest Asia Finance Seminar—at Shaw 

AFB to train all deploying financial managers. Class size was typically 

30–50 students and was conducted two to three times per year. The 

hastily developed course was taught in base education facilities that 

were normally used for evening college courses. The course curriculum included deployed cashier duties, account balancing, contracting support, in-kind support, and host-country culture.

Since we had to establish the course in a hurry, the Ninth AF staff 

was forced to pull double duty as instructors. Occasionally, I also 

filled in as an instructor. When I cut the ribbon on the inaugural 

course, I vividly remember my opening comments to the class: “The 

first thing you all must understand is financial management during 

war is very different from your garrison experience.” The deployed 

USCENTAF commander, Lt Gen T. Michael Moseley, deemed the 

course a huge step forward and an “order of magnitude plus-up.”11

One of the students who attended the deployment course was Capt 

Louise Shumate. Following the course, she deployed to Ahmed Al 

Jaber Air Base, Kuwait, in 2001. She recollected, “If it were not for the 

training received at Shaw AFB prior to my deployment, I would have 

really struggled.”12 Shumate encountered an unusual situation in that 

the cashier operations were conducted in the medical facility to take 

advantage of its secure area for pharmaceuticals. It was tenable to 

cash checks alongside personnel dispensing medications; however, 

each day, the financial specialists had to return to the finance facility 

to “balance out” their accounts.

Accounting for funds spent on major projects was a concern. Captain Shumate had no automated system to track projected expendi-
58 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

tures and to ensure that fiscal limits were not exceeded. Based on her 

training, she established a monthly funds report that, albeit a manual 

solution, provided the necessary accountability. Despite the predeployment training, she struggled mightily with “missed meals.” When 

Air Force enlisted members are assigned at their home station, they 

are entitled to a monthly BAS payment. However, if meals are provided during a deployment, including meals, ready to eat (MRE), the 

BAS entitlement is adjusted accordingly. Not only was this predicament a “morale killer” for the troops but also it was a nightmare for 

financial managers to track and compute.13

Figure 12. Finance customer service. CMSgt Shelina Frey, USAF, 380th 

Air Expeditionary Wing (AEW) command chief, works the finance customer service desk with SrA Steven Nelson, 380 AEW finance technician, at an undisclosed location in Southwest Asia, 4 March 2013. 

(Photo by TSgt Christina M. Styer, USAF, http://media.defense.gov/2013

/Mar/17/2000066964/670/394/0/130304-F-ME639-013.JPG.)
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 59

When I returned to ACC headquarters from opening the predeployment training course at Shaw AFB, I attacked the financial challenges of the war with a vengeance. To track and fix problems, I established a 24/7 contingency action team with the sole purpose of theater 

financial support. Recognizing that rapidly changing wartime pay 

entitlements would complicate pay calculations, we galvanized DFAS 

support to update pay records quickly. At times, I was overwhelmed 

at the sheer number of financial problems that hit us. On one occasion, I received a personal phone call from the deployed commander 

at Diego Garcia. Since his bomber wing shared the small atoll with 

the Navy, his troops wanted the same entitlements. For example, the 

Navy provided haircuts and the Stars and Stripes newspaper free of 

charge. Unfortunately, there was no such policy for assigned Airmen.

I was also under the gun to get funding for firepower on the battlefield as quickly as possible. For example, I had to really hustle to get 

$123 million to pay for getting the U-2 aircraft, the light Predator 

remotely piloted vehicle, and the heavier remotely piloted Global 

Hawk into the fight. We also had to find $78 million to integrate Federal Aviation Administration radars into Operation Noble Eagle 

(ONE) operations. Additionally, integrating Air Reserve Component 

support into OEF and ONE operations drove an unanticipated bill, so 

I had to source an additional $395 million. 

Seemingly insignificant issues quickly became significant, including the use of government purchase cards (GPC). Because financial 

managers deployed to the theater with individual GPCs from their 

home stations, legitimate war charges were billed back to the homestation budget rather than being coded and charged against the operation. To solve this dilemma, one of my pay experts developed a 

centralized Southwest Asia charge card that isolated and appropriately tracked and charged war expenses. As was the case during previous conflicts, tracking reimbursements and assistance-in-kind 

charges was very problematic. This dilemma was a big deal for my 

command because we believed that the Air Force was absorbing more 

than its fair share of costs. After a personal phone call with my Army 

counterpart, we agreed to deploy an Air Force financial officer to 

manage those charges personally.

Another seemingly small issue involving coinage in the theater became front and center on my desk. Deployed military finance offices 

normally support coinage needs; however, due to costs in shipping 

and issues with customs security, we could not provide metal coins to 
60 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

remotely deployed locations. Working with the Army and Air Force 

Exchange Service (AAFES), we came up with a unique solution. To 

replace the heavy coins, AAFES developed a much lighter version 

called “pogs,” which looked like coins but were made of card stock.14

They were produced in 5¢, 10¢, and 25¢ denominations. Pogs were 

produced in Dallas, Texas, and shipped to the Exchange Kuwait Accounting office for distribution to applicable sites. Pogs were treated 

as cash and were essentially used like gift certificates.

Grading Our Work

Like preceding wars, OEF and OIF consumed a large amount of 

US treasure. As a result, following major combat operations, Congress tasked the GAO to examine how those funds were managed. 

The results of the GAO report landed on my desk in spring 2002. As 

I read the GAO audit, it simultaneously caused quite a stir in the Pentagon. Specifically, the GAO was asked to determine whether the 

money spent in Southwest Asia was appropriate and whether the 

DOD provided sufficient oversight to ensure that expenditures were 

necessary and proper. Since more than 80 percent of the expenditures 

were attributed to the Army and Air Force, the review was confined 

to those two services during fiscal years 2000 and 2001.

Most of the Air Force expenditures focused on OEF and OIF and 

thus belonged to my command, putting us in the spotlight. While the 

GAO reported that most contingency expenditures were appropriate, 

it stated that roughly $100 million of the $2.2 billion total spent during that period were spent on “questionable” or unnecessary purchases. My initial take on the matter, considering past financial performances during war, was that—while it was imperfect—getting 95 

percent right was not bad. However, that was not the initial reaction 

from either the Pentagon or Congress.

The GAO placed the questionable purchases into three categories:

1. Expenses that did not appear to be incremental costs—that is, 

costs that would not have been incurred were it not for the operation. 

For example, one unit completely rebuilt vehicles that were not used 

in support of a contingency operation.

2. Repetitive expenditures for items already available in theater. 

For example, four successive Army units deploying to Bosnia spent a 
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 61

total of $2.3 million on similar computer and office equipment without attempting to share or reuse the equipment.

3. Seemingly unneeded expenditures, including items such as cappuccino machines, golf memberships, and decorator furniture.15

Upon closer examination, it was determined that many of the “seemingly unnecessary” purchases were in fact legal and, in the judgment of 

deployed commanders, appropriate—particularly considering the fact 

that most of the purchases involved morale and welfare equipment. 

However, just as I was breathing a sigh of relief, I realized that the larger 

and clearly more intriguing issue was the GAO’s determination that the 

DOD had failed to provide the appropriate guidance and oversight as 

to what should, rather than what could, be purchased.

There were essentially no consistent standards or levels of effort 

defined to guide the expenditure of funds during this extended contingency environment. Said another way, the DOD had not clearly 

delineated how much is enough with regards to investing money into 

a deployed base. Whereas this revelation took much of the heat away 

from our command, it did cause the Air Force to examine the issue in 

much more detail.

A key concern was whether bases in a contingency environment 

should have the same recreational conveniences as a permanent base, 

including access to libraries, computers, gyms, movies, and so forth. 

Regardless of which side of the argument one supports, the point remains that the DOD had not resolved these questions and provided 

no guidance on funding limits for contingency operations. Rightly or 

wrongly, individual deployed commanders, along with their financial 

advisors, made the call. Specifically, the GAO questioned why commanders, with the consent of deployed financial managers, needed to 

purchase items such as VCRs for each billeting room, cappuccino 

machines, and sumo wrestling suits. 

Other purchases raised even more conerns. For example, deployed 

Air Force personnel residing in the contingency dormitory at Aviano 

Air Base, Italy, were provided sightseeing trips to Venice and other 

locations on weekends. Ordinarily, scheduling morale trips for deployed personnel in a contingency environment is absolutely allowable and proper. However, it was unclear to the GAO why personnel 

in Aviano, a noncombat zone where people are free to travel about 

the area while off duty, were provided this service, with the cost 
62 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

charged to the contingency account. During the GAO audit, Air 

Force officials advised that such tours had been discontinued.

The GAO concluded that limited guidance and oversight, combined with a lack of cost-consciousness, contributed to these questionable uses of contingency funds. Very little visibility existed above 

the deploying unit level over how contingency funds were used. The 

DOD, service headquarters, and their major commands received 

only summarized cost reports from their cost-reporting systems. The 

military services and their major commands did not receive detailed 

lists of goods and services actually purchased, nor did they make periodic visits to individual units to examine expenditure records. In 

addition, the DOD did not have an overview process to evaluate and 

examine contracts awarded—many of which were very expensive 

and involved foreign vendors.

The GAO believed that another clear contributor to these questionable purchases was the fact that field commanders had no financial incentive to minimize contingency costs. Since contingency 

funds generally do not affect base budgets, deployed commanders 

essentially operated without fiscal constraint. This situation reduced 

the financial incentive to minimize costs because commanders were 

not required to weigh funding for contingency operations against 

competing budgetary priorities.

To be fair, I am not personally convinced that commanders need 

that type of “pressure” on resources during an active wartime environment—that is not, however, to suggest a return to the days of 

World War II and the open checkbook. But I do believe that some 

level of morale and welfare support is necessary and proper; it is just 

a matter of how much is enough. The real culprit in this case was not 

the commander but the lack of headquarters’ oversight and guidance.

The GAO recommended that the DOD expand financial regulations to include more comprehensive guidance governing the use of 

contingency funds. At a minimum, the audit advised that the guidance include examples of what contingency funds can and cannot be 

used for and what units should do with equipment procured with 

those funds when the equipment is no longer needed. Congress intended to make a point with the GAO audit, to ensure the DOD got 

the message, as the following language that appears in the Report of 

the Committee on Appropriations for the DOD Appropriations Bill of 

2003 clearly indicates:
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 63

The Committee is committed to providing the necessary funding for contingency operations that the military forces of the United States are directed to 

undertake. In order to ensure all required funds are available to the armed 

forces, the Committee relies on information provided by the administration, 

both in estimating resources required, and in evaluating the adequacy of provided funding as operations are executed. In May 2002 the General Accounting 

Office reported, based on an analysis of costs claimed by the selected Army and 

Air Force units during fiscal years 2000 and 2001, that while most contingency 

operations expenditures were appropriate, over $100,000,000 were spent on 

questionable items that were not incremental costs of operations, for equipment 

that was already available in theater, and for frivolous items including cappuccino machines, golf memberships, and decorator furniture.16

The final outcome of the GAO audit was more than a mere mention 

in the Congressional Record; in fact, the committee penalized the 

DOD by summarily decrementing the budgets of the Army and Air 

Force by $50,000 each. For my part, although I am not a micromanager by nature, I was forced to be one. Since the Pentagon was going 

to hold me responsible for purchases in the theater, I needed a mechanism to track expenditures. So we created a process whereby I reviewed every line item purchased in the theater. Even though this 

ritual was oftentimes painful, on more than one occasion my eyebrows were raised as I tried to justify why a specific purchase was 

necessary. In those cases, we quickly followed up and in some cases 

cancelled the purchases.

During war, flexibility is allowed between appropriated and nonappropriated funds (NAF) for morale, welfare, and recreation (MWR) 

purchases. Specifically, appropriated funds are authorized for services’ activities, including personnel, lodging facilities, food services, 

libraries, and community activity centers at deployed locations. However, US Central Command Regulation 28-1, Morale, Welfare and 

Recreation Programs and Policies, 28 February 2001, authorized resale 

operations at the lowest-possible prices with a markup not exceeding 

25 percent and required that all earnings from resale operations 

(profits) be reinvested in the AOR deployment program.

An Air Force audit examined theater MWR expenditures to determine if regulatory guidance had been followed; the results were not 

flattering.17 First, US Air Forces Central Command (USAFCENT) officials did not use retained earnings to support AOR services’ activities. Rather, services personnel continued to spend appropriated 

money for MWR activities while they invested most of the earnings 

back in the CONUS. For example, NAF profits in the AOR were used 
64 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

to fund golf course equipment for Dyess AFB, Texas, and sports bar 

equipment for Nellis AFB, Nevada. Additionally, AOR NAF profits 

were used to renovate the Langley AFB officers’ club and recreational 

vehicle sites at Davis–Monthan AFB, Montana.

Second, services personnel neither consistently nor appropriately 

priced resale goods. For example, at Al Dhafra Air Base, United Arab 

Emirates, wholesale beer prices were increased by an average of 85 

percent while other items such as hard liquor were increased by an 

average of over 500 percent. When questioned as to why regulatory 

guidance was not followed, USAFCENT officials admitted they were 

not aware of the regulations governing AOR profits during wartime.

Yet another earlier, prewar GAO audit confirmed that estimating 

the costs of war remains a troublesome area for financial managers.18

For the Air Force, the problems involved both overstating some costs 

and understating others. On the one hand, the Air Force overstated 

reported flying-hour costs by $67 million in fiscal years 1994 and 

1995. For the most part, this snafu was because the Air Force failed to 

adjust its reported fiscal year 1994 flying-hour costs by the value of 

free fuel provided by Saudi Arabia.

On the other hand, the Air Force understated military personnel 

costs by $81 million of such incremental costs as imminent-danger 

pay and family-separation allowance. Air Force officials said they 

were unaware of the requirement to account for these costs even 

though those costs were reimbursed as a war expense. The report 

went on to say that neither the DOD nor the services had sufficient 

guidance or instructions on which costs to include, how to calculate 

them, or how to apply generally accepted internal controls.19

A verbal exchange between Senator Robert Byrd (D-WV) and 

Secretary of Defense Donald Rumsfeld during a hearing before the 

Senate Committee on Armed Services in July 2003 offers insight into 

the uncertainty over war costs:

Senator Byrd: All right. Mr. Secretary, what is the current monthly spend rate 

to support our ongoing military operations in Iraq?

Secretary Rumsfeld: It’s a combination of appropriated funds as you, sir, know 

better than any plus the expenditures of funds that are taking place from Iraqi 

frozen assets, from Iraqi seized assets, and from U.N./Iraqi assets under the 

Oil for Food program. I can certainly have Dr. Zakheim come up and provide 

a very precise answer as to what’s currently being spent.
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 65

Senator Byrd: Do you recall a figure? Can you give us an estimate? I’ve heard 

a figure of $1.5 billion a month.

Secretary Rumsfeld: I would not want to venture a guess and be wrong, sir.

Senator Byrd: Somebody ought to know.

Secretary Rumsfeld: . . . I wish I were able to do that, but it falls into a variety 

of different baskets under our appropriated funds.

Senator Byrd: I understand that, . . . but I’ve been around here going on 51 

years. I’m on the Appropriations Committee and we want to fund our military 

certainly and meet the needs, but there must be some figure, some amount, 

that we can cite as an amount that we’re spending monthly in Afghanistan and 

the same with respect to Iraq.

Secretary Rumsfeld: I’m sure there is, and we’ll get it for you.20

Enough Is Enough

After reviewing these audits, I was determined that enough is 

enough. This lack of financial preparedness during war had to stop. 

With the experience of two major wars under my belt, I developed 

and delivered a problem/solution briefing to Assistant Secretary of 

the Air Force (Financial Management and Comptroller) Michael 

Montelongo. Having just “lived the dream” of financial management 

during war himself, it did not take much to convince him that immediate action needed to be taken, and he backed me 100 percent. As 

a result, he convened a worldwide financial war planners’ conference 

to identify lessons learned and develop solutions to improve financial 

management on the battlefield.

Following the conference, Air Force Financial Management leadership vowed to make a change. The summary of the conference results perfectly captured the summation of my overall concerns: 

Financial management during wartime is just as important, if not more important, than in peacetime. Support for deployed operations is particularly 

important because it demonstrates the protection of United States interests 

and is a comptroller’s number one core competency. Yet, in times of war, the 

comptroller community is consistently unprepared to execute its primary 

function—support deployed operations. Lessons learned tend to be the same 

lessons from previous conflicts and operations. Despite numerous attempts to 

fix the process, warplanning continues to be overlooked and undervalued as a 

core competency within the comptroller community.21
66 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

The conference report presented another startling and disappointing finding. Following Operation Desert Shield/Desert Storm, in 

1995, a group of financial war planners had also convened a conference. The results of that conference produced many of the same recommendations. Unfortunately, there was no evidence that those recommendations were ever implemented. The conference report noted 

that what was lacking in the past was a systematic plan coupled with 

total comptroller community focus on implementing the recommendations. Consequently, a primary action item of this report was to 

ensure that the recommendations were implemented.

The “get well” plan was very comprehensive and contained many 

recommendations for improvement. Among these, the very first recommendation was to “determine who is in charge.” During the war 

there were multiple locations staffed with financial managers from 

multiple commands. Thus, deployed members “reached back” to individual home stations for assistance. As one can imagine, there was 

no consistency in financial guidance. I specifically briefed the item 

“need to establish better guidelines for use of the Government Travel 

Card,” based on the confusion over charges that I experienced.

“Need to ensure that financial managers are included in the joint 

planning process.” Again, I briefed this item because oftentimes financial management is an afterthought during war planning. As a result, 

initial deploying forces arrive in-theater without the supplies and 

equipment needed to prosecute the war. My specific recommendation 

was to include financial managers on the initial flow-of-forces plan. 

“Need to establish new training standards for deployed personnel.” 

Specifically, there was a suggestion to develop a financial contingency 

course. “Need to establish Air National Guard and Reserve funding 

guidance.” “Improve fundamentals.” This recommendation addressed 

the need for a central financial control location in the CONUS. Again, 

it was noted that this recommendation was suggested following Operation Desert Shield/Desert Storm.22 In my judgment, the recommendations were germane; however, they were all too familiar: I had heard 

them all before.

I was encouraged that the financial management leadership took 

this process so seriously. In fact, the improvement plan included 

milestones, responsible individuals, and suspense dates. However, 

shortly after the conference, others and I moved on to other assignments. I was transferred to Headquarters Air Force Materiel Command at Wright Patterson AFB, Ohio. My new job was completely 
OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM │ 67

outside the financial management community, so I quickly lost track 

of the conference report actions. The drive from Virginia to Ohio 

took me through the mountains of West Virginia. Driving up and 

down the steep inclines and declines reminded me of the ups and 

downs of the war.

It also reminded me that as much work as others and I had put into 

fixing the financial problems of war, I had seen this movie before. 

Working through the recommendations for improvements served as 

a painful reminder to me that I had developed many of the same recommendations before. It seems that, for some unknown reason, we 

get concerned with money and war only when the fighting begins. 

Despite the painful lessons of the past, those lessons are placed on a 

shelf to collect dust. I privately hoped this time would be different, 

but based on past experience, I was not optimistic.

My country called on me twice to serve during war, and despite 

the fact that I certainly do not like war, I was privileged to do my duty. 

There were proud moments as I witnessed US forces completely 

dominate our adversary. However, those days and nights I spent 

fighting through the myriad of financial issues were tough. As a financial leader, I always said that our job was to take care of pay for our 

troops so they could focus on the mission. However, to have our 

troops worried about W-2 forms and coinage for Base Exchange purchases in the middle of a war illustrated that we had not done our best. 

However, the brightest times were my personal interactions with deployed financial managers. We sent them off to war without sufficient 

training, and despite the hurdles, they adapted and overcame.

I have no idea when or where the next generation of Airmen will 

go to war. However, history is clear on one thing: there will be other 

wars. If history is destined to repeat itself, Air Force financial managers in the future, who will have little knowledge about the experiences 

of OEF and OIF, will relive the lessons I learned all too well—possibly 

twice! The good news is that it does not have to be that way. We can 

stop this pattern of inadequate training. Will financial managers 

overcome the challenges of war in the future? Of course they will. 

However, the experience need not be as painful as the one encountered by their predecessors. As I step out of the Air Force, I will not 

have to face war again. However, I do want to leave those coming 

behind me a road map for improvement. Whether or not those following me will change history, only time will tell.
68 │ OPERATIONS ENDURING FREEDOM AND IRAQI FREEDOM

Notes

1. “‘Shock and Awe’ Campaign Underway in Iraq,” CNN Student News, 22 March 

2003, http://edition.cnn.com/2003/fyi/news/03/22/iraq.war.

2. Robert Blair, to the author, e-mail, 30 November 2015.

3. Ibid.

4. Shylon Ferry, interview by the author, 27 November 2015.

5. Ibid.

6. Ibid.

7. Ibid.

8. Stephen Tye, to the author, e-mail, 11 December 2015.

9. Ibid.

10. Edward E. Marshall Jr., to the author, e-mail, 5 December 2015. Then-captain 

Marshall was chief of comptroller war plans and contingency operations, Financial 

Management Directorate, Air Combat Command.

11. Comments by Lt Gen T. Michael Moseley in Officer Performance Report for 

Capt Shylon Ferry, 7 August 2003.

12. Louise Shumate, to the author, e-mail, 30 November 2015.

13. Ibid.

14. The acronym has an interesting origin. The original POG “coins” were the 

caps from a common fruit drink of the same name produced by Meadow Gold Dairies 

and sold at AAFES outlets. The main ingredients in the drink are passion fruit, orange, 

and guava juices—thus, the acronym POG. Even after AAFES began printing its cardstock version of the currency, the name stuck—albeit in a lowercase form: pogs.

15. General Accounting Office (GAO), Defense Budget: Need to Strengthen Guidance and Oversight of Contingency Operations Costs, GAO-02-450 (Washington, DC: 

GAO, May 2002), 2, http://www.gao.gov/assets/240/234701.pdf.

16. House, Report of the Committee on Appropriations on Department of Defense 

Appropriations Bill, 2003, 107th Cong., 2nd sess., 25 June 2002, 43, https://www.con

gress.gov/107/crpt/hrpt532/CRPT-107hrpt532.pdf.

17. Air Force Audit Agency Report, United States Air Forces Central Area of Responsibility Services Financial Activities, F2010-0001-FD4000 (Washington, DC: 

USAF, 7 October 2009).

18. General Accounting Office, Report to Congressional Requesters: Contingency 

Operations, DOD’s Reported Costs Contain Significant Inaccuracies, GAO/NSIAD-96-115 

(Washington, DC: GAO, May 1996), http://www.gao.gov/assets/160/155431.pdf.

19. Ibid.

20. Senate, Hearing before the Committee on Armed Services: “Lessons Learned” 

during Operation Enduring Freedom in Afghanistan and Operation Iraqi Freedom, 

and Ongoing Operations in the United States Central Command Region, 108th Cong., 

1st sess., 9 July 2003, https://www.gpo.gov/fdsys/pkg/CHRG-108shrg96501/html/CH

RG-108shrg96501.htm.

21. Gregory L. Morgan, “Comptroller Warplanning Implementation Plan: Detailed Outline” (working draft, Headquarters USAF, 30 March 2002).

22. Ibid.
Chapter 5

What Did We Learn?

A Path Forward

Having traced financial management through World War II, Vietnam, Operation Desert Shield/Storm, and Operations Enduring 

Freedom and Iraqi Freedom, this article reveals painfully straightforward conclusions and observations. The first conclusion is undeniable: sound fiscal management in a wartime environment is extremely 

critical. Whether it is paying the troops accurately and on time, properly estimating the costs of war, maintaining appropriate internal 

controls, paying local vendors accurately, or understanding local customs with regard to financial transactions, it is not only money that 

make wars go smoothly but also the management of that money.

Second, the fact that financial operations during peacetime are so 

much different than fiscal management during wartime is a major 

contributor to the lack of wartime preparedness of military financial 

managers. During garrison operations, these managers do not cash 

personal checks. In fact, in such settings, handling and accounting 

for cash are rare. Similarly, paying local vendors for goods and services and conducting foreign currency exchanges are rare during 

peacetime operations. Yet, during war, these activities are the norm 

rather than the exception.

Third, the lack of automation support during deployed operations 

has plagued financial operations during war throughout history. During 

peacetime, financial operations—everything from budget preparation 

to funds distribution, vendor payments, and maintaining accounting 

records—are all automated. Unfortunately, this is not the case in a deployed environment. The lack of a deployable financial system has stymied financial performance during war, over and over again.

Fourth, higher headquarters guidance and direction were either 

inadequate or nonexistent. It is hard for me to comprehend that fact, 

but it is as much the case today as it was during World War II. I witnessed it during Operation Desert Shield/Storm, and I lived it again 

during OEF/OIF. During each major war examined here, financial 

managers showed up on the field of battle without the proper guidance and tools to do the job. The General Accounting Office, the 
70 │ WHAT DID WE LEARN?: A PATH FORWARD

Department of Defense Inspector General, and Air Force audits have 

continually validated this shortfall, but their recommendations appear to have gone unheeded.

Fifth, the lack of training and preparedness stands out like a sore 

thumb. Otherwise stellar financial managers are simply not provided 

the depth of training needed to perform successfully during war. From 

paying the troops accurately and on time to dealing with vendors from 

a variety of nations and cultures to understanding unique obligations 

such as computing and tracking in-kind support, each war told the 

same story: deployed financial managers were not sufficiently trained.

Sixth, accurately determining the costs of war is critical to securing 

congressional and national support, but the DOD is simply not 

equipped to provide such data. The phrase “weak accounting systems” 

was echoed throughout each war and should come as no surprise for 

two reasons: (1) Air Force accounting systems are old and outdated 

and (2) the Air Force eliminated cost-estimating capabilities at the 

wing level years ago, eliminating that expertise. Even with that reality, 

history shows that major commands and the Pentagon struggled 

mightily to develop accurate cost estimates, much to the dismay and 

anger of Congress.

Finally, wars are generational. Having spent nearly 44 years on active 

duty, I experienced war twice—but I am the exception. History shows 

that military financial managers may experience one actual war during 

their careers. In terms of experiencing wars overall, we are fortunate 

they do not occur more frequently. In terms of war preparedness, it is 

no wonder the financial lessons of war are learned over and over again.

The preceding chapters evaluated financial performance during 

war, making a strong case that deployed military financial managers 

were not fully prepared to operate either efficiently or effectively intheater. Prior to World War II, there was no plan for financial operations during war. People were trained and systems were developed 

with a peacetime focus. Decision makers theorized that those peacetime skills and tools would easily convert to accommodate war. Unfortunately, history proved that theory wrong.

Financial managers entered World War II with little clue about 

how to execute fiscal management on the battlefield. Not only were 

they late arriving to the theater but also they were ill equipped and 

poorly prepared when they got there. Cases of inaccurate payments 

or no payments at all were common throughout the course of the 
WHAT DID WE LEARN?: A PATH FORWARD │ 71

war. With no doctrinal guidance or fiscal controls, fraud and waste 

were rampant.

A postwar report on financial conditions concluded that no one 

had knowledge of expenditures during the war. The services spent 

$176 billion, but no one knew exactly how, when, or where the funds 

were consumed. Interestingly enough, although the financial lessons 

of World War II were chronic and undeniable, only roughly 20 years 

later during Vietnam, comptroller leadership had still not heeded 

those lessons.

Vietnam caught the financial community yet again unprepared. 

During the early stages of the war, it appeared that the “open checkbook” policy of World War II would once again be the norm. However, to keep spending under control, the secretary of defense implemented cost-saving measures that were later overruled by Congress. 

As the war progressed, costs began to escalate, and public support for 

the war soured. As a result, Congress reversed itself and demanded 

accountability for the huge emergency supplemental requests. Having 

done little to correct the problems of fiscal management in the past, 

the DOD could not deliver. This inability to manage money during 

war so incensed the Congress that an undeniable wedge of distrust 

resulted. What followed was a continuum of animosity over reported 

cases of excessive waste.

Deployed financial specialists, trained in peacetime operations 

only, had to learn battlefield operations on the job. The philosophy of 

conducting military operations using a base-camp strategy placed a 

premium on individual troop pay, which consumed valuable time 

from field commanders. Although the nature of the war in Vietnam 

was quite different from that of World War II, the problems in financial management were almost identical. Prewar planning was virtually nonexistent; financial personnel were not sufficiently trained, 

and financial systems were not designed for a war zone. Requirements such as converting US dollars to military pay certificates 

caught financial managers by complete surprise, forcing them to 

write the rules as events occurred.

The next big test of financial support during war occurred 20 years 

later during Operation Desert Shield/Storm, and I got the opportunity to witness wartime financial management up close and personal. 

With nearly two decades to improve upon the disappointments of the 

past, one would certainly assume that the financial community could 

respond to this benchmark in modern-day warfare. However, despite 
72 │ WHAT DID WE LEARN?: A PATH FORWARD

the lessons of World War II, poor marks during Vietnam, and advances 

in fiscal technology, the comptroller community entered Operation 

Desert Shield/Storm nearly as unprepared as before. Once again, financial priorities had been focused on peacetime operations, not war.

Despite an improved relationship between Congress and the DOD, 

frustrations over the inability of the military to provide war-cost data 

for Desert Shield/Storm threatened a return to the old animosities of 

the past. Blaming shortfalls in accountability on “weak” accounting 

systems, particularly in the Air Force, the DOD simply had no way to 

accurately track the costs of the war. Thus, in the end, the DOD provided the only data it could—estimates and projections without the 

benefit of validation.

Aside from the problems of determining the costs of the war, other 

shortfalls in accountability resulted in waste and loss of fiscal controls. 

Millions were spent in direct violation of regulatory restrictions. 

Units failed to properly record and charge war costs as a Desert 

Shield/Storm expense, which cost the United States an estimated 

$126 million in potential reimbursement from our allies.

Once again, not having a deployable financial management capability was front and center. Literally thousands of pay transactions were 

manually prepared in-theater and shipped back home for processing, 

resulting in late payments, missing documents, and an overwhelming 

workload for those at the home station. Also, deploying with a briefcase full of cash and checks proved difficult to manage and secure.

Despite the lessons of Vietnam that highlighted a renewed importance on military pay, those problems were persistent throughout 

Desert Shield/Storm. The lack of preparedness to process pay and allowances for reservists called to active duty was troubling at best. In 

fact, 35 percent of all reservists released from active duty after the war 

left indebted to the government. Support for those already on active 

duty was equally challenging. Total overpayments in-theater reached 

a high of nearly $80 million and involved some 120,000 personnel. 

Additionally, the fact that a large number of individual service members failed to plan their personal financial obligations produced many 

cases of “bad” checks and overdue creditor accounts.

Having endured the war of my generation, I did not expect to encounter war again. However, when Operations Enduring Freedom 

and Iraqi Freedom began, I was the major command comptroller for 

ACC and once again found myself in the throes of wartime financial 

support. Having spent several years outside the financial management 
WHAT DID WE LEARN?: A PATH FORWARD │ 73

career field, I assumed that the shortfalls I experienced during Operation Desert Shield/Storm had been resolved—they had not.

The hundreds of financial managers who deployed to the Middle 

East were not prepared for the tasks facing them. Once again, financial troops boarded airplanes with briefcases full of cash and checks. 

They struggled with check cashing, account balancing, tracking assistance in kind, foreign currency exchanges, and vendor payments. 

Again, thousands of documents were mailed back to the CONUS for 

processing, and many of them were either missing or illegible.

To help, assistance visits were provided for on-the-spot training. 

Eventually, an “emergency” predeployment course was created to 

provide “just-in-time” training for those deploying to the theater. Despite those herculean efforts, financial management issues persisted 

throughout the war. Additionally, financial matters such as providing 

coinage in-theater and managing wartime pay entitlements to avoid 

inaccuracies with W-2 forms presented new challenges. Following 

major combat operations, GAO and Air Force auditors highlighted 

many of those shortfalls.

A GAO audit found that over $100 million had been spent on 

items that were not needed for the war. This discovery led to a larger 

issue of a lack of DOD oversight and guidance as to what should

rather than what could be purchased during war. An Air Force audit 

that discovered guidelines for managing NAFs was totally disregarded. In fact, MWR profits that should have been reinvested intheater were diverted to fund projects in the CONUS. Finally, the Air 

Force was singled out for its shortcomings in estimating the costs of 

the war by identifying instances of both overestimating and underestimating on key wartime tasks.

Having interviewed a number of financial managers with firsthand 

knowledge of financial performance during the war, I found their 

conclusions all too familiar. They all agreed that financial training 

and preparedness were woefully inadequate. They also acknowledged 

that poor preparedness stemmed from the fact that financial management duties and training during peacetime are nothing like the demands of a war zone.

For me, this open-and-shut case ruled that the comptroller community, which performs so brilliantly during peacetime, was unprepared to perform as effectively during war. This ruling is critical because most experts agree that military excursions in the future will be 

much more complex. Future conflicts are likely to be more frequent 
74 │ WHAT DID WE LEARN?: A PATH FORWARD

and involve fragile coalition and US public support. Competing domestic priorities will place a premium on financial resources allocated 

for foreign intervention. Therefore, the financial management of those 

scarce dollars will undergo even greater scrutiny in the future.

An Opportunity to Change History

Throughout the history of money and war, it is clear that individual military financial managers did not fail—poor DOD business 

practices and wartime financial training failed. The good news is we 

can turn the page. The solutions to correcting the failures of financial 

management during war are well within reach. The current financial 

paradigm is grounded in peacetime operations. We simply need to 

reverse our thinking and focus more on being prepared for war. The 

only quandary is whether we continue on the path of unpreparedness 

or step up to the challenge and correct the mistakes of the past.

In the future, funds allocated to support military intervention will 

not only compete with domestic priorities but also endure intense 

public and congressional oversight. Those conditions place great 

pressure on DOD military managers to develop systems and training 

that can withstand the tougher scrutiny. Therefore, we must transform financial wartime procedures and systematically implement 

those procedures to ensure we are prepared to win the financial 

“fight” during the next conflict.

According to Proverbs 29:18 (KJV), “Where there is no vision, the 

people perish.” The foundation of a financial wartime transformation 

must start with a financial vision or concept of operations (CONOPS) 

that should spell out higher headquarters’ oversight responsibilities 

and be specific enough to guide spending patterns during contingency operations—without overly restricting deployed commanders. 

The CONOPS should also serve as the universal, authoritative document for contingency financial operations and be periodically updated to ensure current relevance.

We must then tackle the issue of automation support. Many people 

have suggested that the answer to the financial ills of the past rests 

with new and faster computers that can operate in austere environments. While I do not necessarily disagree with that assessment, perhaps we should first reexamine the requirements for financial support on the battlefield.
WHAT DID WE LEARN?: A PATH FORWARD │ 75

Today, Internet connectivity can provide the support needed to 

manage most financial transactions between deployed locations and 

home stations. Deployed members should have the capability to 

manage their financial transactions in a war zone the same way they 

manage their personal finances today—online. Routine transactions 

such as changing allotments or withholding adjustments can and 

should be accomplished with a desktop or laptop computer or with 

an application on a cell phone. At a minimum, financial transactions 

can be accomplished via a telephone call.

We can and should replace pay windows with financial “transaction rooms” at deployed locations. Cashing checks and foreign currency exchanges should be accomplished by using credit or debit 

cards at ATM machines. Today’s technology allows remote-interface 

access into home-station defense financial systems from anywhere on 

the planet. Therefore, deployed financial managers can transmit financial data (for example, updating special combat zone entitlements) directly to the home station for immediate posting. Doing so 

will allow forward financial managers to focus on direct support to 

their commanders by maintaining budget balances, tracking expenditures, and ensuring that fiscal laws and policies are properly observed. As an added bonus, this action should significantly reduce 

the footprint of financial managers needed at the deployed location.

I also recommend establishing a contingency finance capability 

located in the CONUS—something akin to a combined air and space 

operations center. I would name this new capability the contingency 

financial management operations center (CFMOC), charged with 

providing 24/7 financial support for deployed forces, including policy guidance on the proper use of appropriated funds. Additionally, 

just as US fighter pilots “sharpen” their skills by attending predeployment training at Red Flag exercises, so should the CFMOC offer financial predeployment training as required.

The CFMOC can be established through one of two options. The 

first is simply to assign this duty to the recently established Air Force 

installation and mission support center. The second is to designate specific billets and a designated location that can be operational within 72 

hours of notification. In both options, preoperational training is critical 

to ensure that personnel assigned to CFMOC duties are trained specifically for war operations—not just in-garrison duties. Also, periodic 

exercises should be conducted to maintain their operational readiness. 
76 │ WHAT DID WE LEARN?: A PATH FORWARD

Finally, CFMOC operations should be tested, stressed, and graded 

during operational inspections.

Neither option requires new manpower billets. However, creation 

of the CFMOC will demand focused and comprehensive training. To 

build a sense of pride and camaraderie within the CFMOC, we should 

consider designating those billets as “combat comptrollers” by adding 

an Air Force specialty code identifier. To take it a step farther, we 

should evaluate the pros of adding a special patch or badge to demonstrate to those in the comptroller career field that the CFMOC is 

an elite assignment, reserved for the best and brightest.

We also need to improve our cost projection and analysis capability. 

History validates that Congress has been very critical of the DOD’s 

inability to provide accurate cost accounting data and estimates of 

war costs—and for good reason. As difficult as it is to admit, the accounting system used by the Air Force today, the General Accounting 

and Financial System (GAFS), was actually installed in 1965! The 

GAFS does not comply with current general auditing and accounting 

standards. The good news is the Air Force is in the midst of installing 

a new auditing/accounting standards compliant system—the Defense 

Enterprise Accounting Management System (DEAMS). However, it 

will not be fully implemented until the end of fiscal year 2017.

Even when the DEAMS is operational, we will still need the capability to project war costs. In the past, all Air Force installation comptroller squadrons had a cost-analysis branch with analysts trained in cost 

estimating. I am very aware of this capability because as an enlisted 

member and a junior officer, I was one of those analysts. Unfortunately, 

those cost-estimating branches were eliminated. As a solution, we 

should reinstate that capability as a skill set required for financial managers. That is not to imply we need additional people; rather, we need 

to train our current financial force in cost-estimating techniques.

If preparedness leads to better war performance, then training leads 

to better preparedness. Unfortunately, history proves that our deployed financial managers were not prepared. A previous financial/

contracting deployment training exercise called Top Dollar, which no 

longer exists, was an excellent opportunity to hone deployed financial 

and contracting skills based on the lessons learned from Operation 

Desert Shield/Storm. I attended several Top Dollar training exercises, 

and it did indeed provide realistic and intense wartime training. Top 

Dollar was a huge leap forward in financial war-skills training, and we 

should bring it back, albeit in a different configuration. Rather than 
WHAT DID WE LEARN?: A PATH FORWARD │ 77

the large footprint of the past, Top Dollar “skills” should be part of 

every wing comptroller’s training program.

For example, during wing exercises, as was the case with Top Dollar, financial and contracting personnel should demonstrate their 

ability to manage cash, contracts, and foreign currency exchanges in 

a wartime environment. Wing financial managers should “deploy” 

locally to a location on the base and be required to demonstrate their 

ability to conduct financial transactions remotely, both online and 

manually if necessary. This training should be realistic, rigorous, and 

tested by major command inspectors general to ensure that future 

financial performance during war does not mirror past performance.

Additionally, we should take advantage of this opportunity to train 

the general base populace on personal financial management. Thus, 

during the exercise deployment phase, random Air Force members 

should be required to demonstrate their ability to manage personal 

finances and ensure that family arrangements are in place to continue 

routine household financial management. Furthermore, we must 

modernize and streamline the Reserve and Guard pay systems to ensure a smooth transition into and out of contingency deployments. In 

particular, the total force financial management team should share in 

wing exercises and hold billets in the CFMOC.

Finally, we should encourage those financial managers with war 

experience to document and record their experiences and lessons 

learned. Among other reasons, I decided to publish this monograph 

because there is very little written about Air Force financial experiences in war. Googling the phrase Army financial management during war will yield countless pages of articles and books. Googling the 

same information for Air Force produces virtually nothing. We simply 

must catch up with our Army and Marine Corps financial brethren.

Now that I am retired from the US Air Force, it is certain that I will 

no longer participate in war. What is not certain is whether or not the 

Air Force will finally accept and do something about the fact that 

wartime financial training and preparedness is inadequate. I would 

like to be optimistic that positive change will happen, but I am not 

sure. When I inquired about the status of the OIF/OEF financial getwell plan, I could not find anyone who had even heard about either 

the conference or the report. I found this fact disturbing, but I was 

not at all surprised. This has been our history. This is why my examination of financial management during war conclusively and consistently showed a lack of training and preparedness. This is precisely 
78 │ WHAT DID WE LEARN?: A PATH FORWARD

why I wrote this monograph. I sincerely hope and pray that the Air 

Force financial community will take heed of our history during war, 

lest yet again we watch history repeat itself.

As a final tribute, I would be remiss if I did not acknowledge the 

extraordinary efforts of financial personnel on the field of battle. Although history does not give financial preparedness during war a flattering score overall, that assessment is no reflection on the hard work 

and dedicated support of the individual financial managers. Through 

uncertainty, insufficient training, and inadequate equipment, these 

personnel have persisted repeatedly during periods of conflict to provide the best fiscal support possible.

Also, through all the problems, it is important to keep in perspective that although there remains much room for improvement, we are 

much better than whoever claims to be second best! Financial managers indeed have a proud history of achievement during war despite 

the shortcomings of guidance, training, emphasis, and resources, and 

I consider myself fortunate to be included among their ranks. Now is 

the time to capitalize on the lessons from the past and to take the 

journey of transformation into the future.
Abbreviations

AAFES Army and Air Force Exchange Service

ACC Air Combat Command

AF Air Force

AFA Air Force Association

AOR area of responsibility

BAS basic allowance for subsistence

CCO contingency contracting officer

CFMA Centralized Financial Management Agency

CFMOC contingency financial management operations 

center

CONOPS concept of operations

CONUS continental United States

DEAMS Defense Enterprise Accounting Management 

System

DFAS Defense Finance and Accounting Service

DOD Department of Defense

GAFS General Accounting and Financial System

GAO General Accounting Office (Government

Accountability Office)

GPC government purchase card

ICAF Industrial College of the Armed Forces

IT information technology

LES leave and earnings statement

MACV Military Assistance Command, Vietnam

MPC military pay certificate

MRE meal, ready to eat

MWR morale, welfare, and recreation

NAF nonappropriated fund

NCO noncommissioned officer

O&M operation and maintenance

OEF Operation Enduring Freedom
80 │ ABBREVIATIONS

OIF Operation Iraqi Freedom

PAYSET pay support evaluation team

PGC Persian Gulf Command

POW prisoner of war

R&R rest and recuperation

SWPA Southwest Pacific area

USAFCENT US Air Forces Central Command

USAFFE United States Army Forces in the Far East

USCENTAF United States Central Air Forces

USCENTCOM United States Central Command
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