Pentagon crosses palms with silver in arms sales

The Pentagon has improperly subsidized foreign military sales through undercharges on military items containing silver, the General Accounting Office said. The Defense Department has been selling items such as batteries and photographic film containing silver at a fraction of the market value of silver, the agency said.

In a review of three of the more than 40 activities involved in the military sales program, the agency said it found undercharges of $2.3 million involving silver since 1974. The agency recommended that the Pentagon seek congressional authority to hire more personnel to monitor the foreign sales program, with the increased cost to be reimbursed by foreign governments. Defense officials told agency investigators they agreed with the recommendations.