By Jennifer Doherty

Law360 (September 25, 2020, 10:12 PM EDT ) Two more Democratic lawmakers Friday joined a growing list of politicians calling to investigate U.S. Department of Defense spending, following reports that the department redirected most of a $1 billion CARES Act appropriation meant to respond to the COVID-19 pandemic to non-emergency contractors instead.

Sen. Elizabeth Warren, D-Mass., and Rep. Ro Khanna, D-Calif., issued a joint letter asking the DOD's acting inspector general to review the department's potential misuse of funds in light of a Washington Post article stating that over two-thirds of the award — $688 million — went to services unrelated to shoring up domestic medical and personal protective equipment supplies.

"Instead of addressing the urgent needs of a pandemic that has killed over 200,000 Americans, it appears DOD used taxpayer money meant to protect lives from COVID-19 to pad the pockets of defense contractors," they said in their letter to the DOD acting inspector general.

Warren and Khanna quoted CARES Act language saying the funds were intended to "to prevent, prepare for, and respond to coronavirus, domestically or internationally," and pointed to reports that hospitals continue to lack sufficient N95 masks and recent Senate testimony by the director of the Centers for Disease Control and Prevention indicating that the agency will need $6 billion to be able to distribute a COVID-19 vaccine.

The pair's letter was the latest in a string of calls to review the department's spending.

On Tuesday, Reps. Mark Pocan, D-Wisc., and Barbara Lee, D-Calif., issued their own letter urging the co-chairs of the House's Defense Spending Reduction Caucus to launch oversight investigations and public hearings.

Rep. Adam Smith, D-Wash., chair of the House Armed Services Committee, issued a statement the same day calling the DOD's misalignment of priorities and spending "alarming."

"Instead of focusing on a clear, coordinated strategy to produce and acquire the medical supplies necessary to respond to the ongoing COVID-19 health crisis, the Trump administration carved up this billion-dollar appropriation and spent three dollars on defense contracts for every dollar it spent on acquiring health resources," Smith said.

Back in July, the Democrat-led House Committee on Appropriations also criticized the DOD's use of CARES Act funds in its report on the 2021 Defense appropriations bill.

"The Department's own estimates indicate that the total domestic consumption of N95 masks is as high as 3,300,000,000. The Committee's expectation was that the Department would address the need for PPE industrial capacity rather than execute the funding for the [defense industrial base]," the committee said, stating elsewhere that its "skepticism about the Defense budget has grown."

Civil society groups have also raised alarm bells. On Thursday, a coalition of 40 nonprofits — including the National Taxpayers Union, Greenpeace and the Sisters of Mercy — co-signed a letter urging the House Select Subcommittee on the Coronavirus Crisis to launch an inquiry.

The letter highlighted reported line items including $183 million in awards supporting the shipbuilding industry, $80 million to a struggling airplane parts supplier and $2 million for a fabric manufacturer who supplied cloth used in Army dress uniforms.

"We believe the Pentagon's decision-making with these funds, as recently reported, violates Congressional intent at minimum, and represents a significant breach of trust with the taxpayers who fund the military's budget and its emergency spending," the groups said.

They pointed to $10.4 billion worth of relief Congress awarded the DOD to support the department's general operations during the pandemic as distinct from the $1 billion appropriation for Defense Production Act purchases to support the country's COVID-19 prevention and response efforts.

The nonprofits raised the idea of rescinding the DOD's authority to spend the public dollars through a new bill.

The Pentagon's chief spokesperson Jonathan Hoffman called the controversy a "misunderstanding" in a statement Wednesday.

"The CARES Act did not limit — nor did it intend to limit in its language — the use of Defense Production Act (DPA) Title III to only medical resources. As part of the efforts to mitigate economic damage, the Act allowed monies to be spent to support individuals and industries that had been impacted by COVID. This is exactly what DOD has done," Hoffman said.

He went on to add that the department had been "wholly transparent" in its approach, which also included support to the medical industry and production.

--Editing by Steven Edelstone.

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