Bye-Bye, Budgeteer

Dov Zakheim leaves one of the Pentagon's most thankless jobs.

Budget Office more than two decades ago, was headed out the door to take a post as a partner with consulting giant Booz Allen Hamilton after three years of managing the more than $400 billion the armed services spend annually.

Zakheim spent much of his time trying to reform the Pentagon's notoriously woeful bookkeeping. "I thought I was going to be climbing Mount Everest, and I was-and my successor will be, too," he says. "You are dealing with a fundamental cultural problem, which is that we are in the business of fighting wars. We are not in the business of balancing books."

Zakheim is no stranger to Pentagon battles. As a deputy undersecretary of Defense in the mid-1980s, he led an effort to scrap a joint U.S.-Israeli fighter plane that was costing the Defense Department about $500 million per year. He succeeded, even though his opponents accused him of selling out his Orthodox Jewish faith.

An ordained rabbi, Zakheim acknowledges that his job involved a delicate balance between "serving God and serving country." He says he often missed Friday night services that begin the Jewish Sabbath, but rarely works Saturdays.

Asked about the financial management effort, Zakheim cites several signs of progress: Five Defense agencies have received clean audits, the department has established a common architecture for its vast array of financial management systems, Defense offices have cut problem disbursements by two-thirds, purchase card use has been tightened in the wake of fraud revelations, and the Pentagon has provided more detail-such as environmental liabilities-in financial statements.

Still, Zakheim concedes the Pentagon has a long way to go. Defense as a whole has never received a clean financial audit, thousands of systems are still used to track spending, and in recent months, the Pentagon has come under criticism for delaying a supplemental budget request for operations in Iraq.

Zakheim says he initially thought Defense agencies were using about 1,800 different financial systems, but an inventory found more than 5,000. He believes that number can eventually be reduced by about 90 percent.

In recent months, Zakheim has faced sharp questioning from Congress members over Defense's plan to wait until early 2005 to submit a supplemental budget request for ongoing military operations. Some lawmakers say the request is being delayed to avoid reminding voters about the costs of war before November's election. They note that in most years, supplemental requests are sent in by the end of the summer. Zakheim counters that costs can't be estimated until after elections in Iraq this summer.

Days before moving out, Zakheim still had one file box on his desk, marked "Snowflakes from SecDef." The prominent display of the "snowflakes"-policy memos Defense Secretary Donald Rumsfeld drops on senior Pentagon leaders regularly-are a testament to Zakheim's sense of humor and a not-so-subtle reminder that he's a Pentagon insider.

Asked if he might eventually return to the Defense Department, Zakheim, a protégé of Deputy Defense Secretary Paul Wolfowitz and an early foreign policy adviser to then-Gov. George Bush, plays coy, saying, "Rumsfeld certainly demonstrated one can stay away for a long time and still come back with a tremendous impact. So who knows?"