Club Fed – Porkus Pentagonus

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by Jim Grichar (aka Exx-Gman)

What with the space shuttle Columbia’s demise and worries over war with Iraq, news about the federal budget has been pushed to the back burner by most of the media.

In the national security area, Defense Secretary Donald Rumsfeld (aka Rummy) apparently has abandoned his desire to transform the U.S. military into a lean, mean, fighting machine and is instead seeking to raise defense spending to the $500 billion dollar level by fiscal year 2009 (excluding any costs of a conducting a war on Iraq).

Maybe his recent tangle with Kim Jong-Il, in which Rummy essentially threatened to have our military fight Kim’s army, made him think twice and ask for more money. Or maybe Rummy was just buying off the military chiefs’ support, all so that he could also get the kinds of toys he wants. After all, the cost of running an empire is high!

But like all other federal agencies, the Pentagon’s budget is bad news for taxpayers, and it is loaded with pork barrel projects – Porki Pentagoni, including such operations as the Defense Department’s military resorts, which should be called Club Fed.

Normally, operations like Club Fed would be an embarrassment to any federal department if publicized. That is why bureaucrats usually try to bury such obvious pork deeper in their operations. But the military has a lot of chutzpah and has conjured up what they think is a good rationale for keeping these facilities.

During the Cold War, the military services opened resorts – the Army’s are known as Armed Forces Recreation Centers (AFRC’s) – that are available to all military and military retirees, including dependents, as well as DOD civilians and foreign military stationed at U.S. bases. Known locations of Club Fed resorts include Hawaii, Alaska, Washington, Florida, Germany, and Italy. The resorts in South Korea are located within active U.S. military bases. Given the military penchant for secrecy when it comes to dealing with perks, additional unpublicized Club Fed resorts might exist.

According to the AFRC web site, the resorts are “… to provide rest, relaxation, recreation, and sustainment for Army personnel, their families, and other members of the total Defense Force.” AFRC’s “… support readiness, retention, and well-being. AFRC’s will be prepared to assume contingency missions in support of mobilization and/or combat operations.”

Even if one believed that the current military was not oversized – fit for an empire – and that our troops deserved such amenities, anyone with two ounces of brains knows that the military does not have to offer this perk to attract and retain quality personnel.

In the real world, military recruitment ads emphasize in-service and post-service educational benefits to enlistees, something that will help them earn more once they leave the service. In addition, DOD also offers re-enlistment bonuses to retain key personnel.

Those with the desire to make the military a career have done so because they like it, the pay is relatively good, and because they can retire at roughly half pay after 20 years of service. And if career soldiers did not make that decision based upon the prospect of a cheap vacation, it is also ridiculous to offer those benefits to military retirees.

Even if Club Fed is of little or no utility in recruitment and retention, the AFRC mission statement claims that the resorts would be used in support of mobilization and combat operations. However, the total number of troops that might be lodged in those facilities would likely be 3,000–4,000, an insignificant number.

Given the highly questionable military value of these resorts, why have they not been included in the earlier military base closure lists (Author’s note: I served as the Chief Economist at the 1991 Defense Base Closure Commission)? The straight answer is that they have been protected by flag rank officers (generals and admirals) who enjoy staying in what are normally expensive tourist spots at below market prices. Building them big enough to allow enlisted troops and other DOD-related employees to stay at these resorts, as well as listing those facilities as being necessary for mobilizations, is a nice cover for this Porkus Pentagonus.

And what kind of a perk is a vacation at one of these resorts? Well, one of the most popular military resorts is the beautiful Hale Koa Hotel, located in Ft. DeRussy on Waikiki Beach in Honolulu. Initially constructed with taxpayer funds and opened in 1975, the Hale Koa states that it does not now get subsidies and that it did not get military construction funds for its 1991 expansion, which almost doubled its size to 817 rooms.

Its rates are well below what its next door neighbor, the Hilton Hawaiian Village, charges. At the Hale Koa, double occupancy rooms range from $68 per day for the lowest ranking enlisted soldier up to $174 per day for those on official travel (paid for by taxpayers) or foreign soldiers. The Hilton Hawaiian Village’s double occupancy rates range from $189–$345 per night, about double the Hale Koa’s.

Other military resorts – particularly the one in Florida, which is close to Walt Disney World – offer similar bargains compared to nearby private resorts. And unlike private citizens, the military and other customers of Club Fed resorts generally do not pay sales or other local taxes, and the facility – owned by the military – is exempt from local property taxes.

If Rummy were really the whiz-bang manager that his supporters claim he is, he ought to take some tips from another Donald – Trump that is – by reading “The Art of the Deal” and then privatizing the Club Fed chain of resorts. Selling the Hale Koa and the rest of Ft. DeRussy – a total of 72 acres that The Real Donald might consider a trophy property – alone might bring in $400–500 million. The other Club Fed properties could probably fetch $100–200 million more. Thus, privatizing Club Fed could bring in more than half a billion dollars for taxpayers.

But don’t bet on Rummy selling off the Club Fed chain of resorts or getting rid of other Porki Pentagoni. Since he is so eager to wage war on Iraq and threaten North Korea, it is obvious that the only group he really needs to keep peace with is the senior ranking U.S. military officers. This explains his cave-in on the defense budget as well as his unwillingness to cut Pentagon pork.

Jim Grichar (aka Exx-Gman) [send him mail] was an economist with the federal government. He writes to "un-spin" the federal government's attempt to con the public, whether through its own public relations organs or via the usual stooges and dupes in the mainstream media.


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