Hillary Clinton “lost as much as $6 billion in taxpayer money while she was running the State Department. Now, some people say it was misplaced. Oh, billions of dollars misplaced.”

— Donald Trump, remarks in Panama City, Fla., Oct. 11, 2016

In the past week, Trump has offered some version of this claim that Clinton “lost” or “misplaced” $6 billion of taxpayers’ funds while she was secretary of state. He argues that this shows she “is the vessel, a corrupt global establishment that’s raiding our country and surrendering the sovereignty of our nation.”

Trump is also trying to rebut news stories about the nearly $1 billion loss that he claimed in a 2005 tax return that was made public by the New York Times. His supporters have argued that Trump losing a billion dollars of his own money is not as bad as Clinton losing $6 billion of taxpayer money.

In the context of the $3.8 trillion annual federal budget, a few billion dollars is a rounding error. But by itself $6 billion is a hefty chunk of change — and certainly taxpayers should expect the money is properly spent.

Does this figure have any basis in reality?

The Facts

Trump’s use of the number appears to have its roots in recent reporting of the right-leaning media, which reported on a Freedom of Information Act request in August 2016 by a self-described government watchdog (also right-leaning) called the Cause of Action Institute. The FOIA request sought information about whether State has implemented recommendations in a management alert issued by State’s Office of Inspector General in March 2014.

The management alert, which used the $6 billion figure, summarized a variety of recent audits that indicated paperwork deficiencies in closing out contracts that were issued in Iraq, Afghanistan and Africa. The FOIA request asserted, without evidence, that “many of these cases arose during the tenure of Secretary Hillary Clinton.” In the Daily Caller, this got translated as “Clinton’s State Department Blew $6 Billion In Contracts.”

Actually, the 2014 alert is an old story. Steve Linick, the inspector general, was sufficiently concerned about media reporting on the figure that he sent a letter to The Washington Post, published April 13, 2014, explaining that it was wrong to assume $6 billion was “missing.” The alert, he wrote, “did not draw that conclusion.” Instead, he wrote, the point of the alert was that “the failure to adequately maintain contract files — documents necessary to ensure the full accounting of U.S. tax dollars — ‘creates significant financial risk and demonstrates a lack of internal control over the Department’s contract actions.’ ”

Translation: Paperwork was missing, not dollars. Indeed, the State Department had no argument with the Office of Inspector General’s message, pledging to agree to its recommendations.

So, for the past two years, it was known that taxpayer money was not lost or misplaced. So what about the claim that the problem was Clinton’s fault?

The State Department is a vast bureaucracy, and it’s silly to blame Clinton for some missing paperwork in the Baghdad embassy. But we dug through the footnotes of the alert and read the original audit reports to figure out the time period in question. Recall that Clinton was secretary of state from January 2009 to January 2013.

About two-thirds of the $6 billion stems from a set of contracts issued in Iraq. The IG looked at 115 contracts, worth about $7.5 billion, that were issued between October 2004 and October 2011. The report does not give a breakdown, but it’s safe to assume that more than half were issued before Clinton took charge of the State Department.

  • $2.1 billion (33 contracts) had missing files, mainly because an office move made it difficult to find them during the audit period.
  • $2.1 billion (48 contracts) had incomplete files, such as a missing closeout checklist or completion certificate.

Another $1 billion, transferred to State from the Defense Department between October 2006 and April 2009, concerned a civil police contract in Afghanistan. The problem in this case was contract files were not complete and could not be easily accessed.

Finally, $1 billion concerned a Blackwater contract to provide security in Iraq, as of May 29, 2008. Again, files were not accessible, complete or maintained in accordance with State Department policy.

That adds up to $6 billion. Easily two-thirds, or perhaps more, concerned contracts that predated Clinton’s tenure at State. (The management alert also mentioned a handful of cases of deliberate fraud, such as $52 million in contracts awarded to a company headed by the spouse of a contracting employee–a scam first exposed by the Daily Caller.)

The Trump campaign did not respond to a request for comment.

The Pinocchio Test

The $6 billion was not lost or misplaced; it’s that $6 billion in contracts had missing paperwork. On top of that, the majority of contracts with missing or incomplete paperwork stemmed from the Bush administration, before Clinton became secretary of state. So it’s ridiculous to claim Clinton was in any way responsible for the problems with the contracts.

The only thing “lost” in Trump’s statement is reality.

Four Pinocchios

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