A very sad story, and I'm sure it's not the only one we'll hear about.
From my own personal experience "over there", the situation has been similar to the "Wild West" for some time, especially the first few years. Slowly improving, but at a maddingly slow pace.
The money issue was a particular problem I saw. Quite literally PILES of money, haphazardly laying about in military coffers, with oversight being an afterthought. For some, the temptation proved too great.
True story time: While I was there at Camp Victory (Military Coalition HQ) in the spring of 04, the administration directed that the American forces pump money into the local economy through a "purchase program". Every unit was given fresh printed American cash to go out and purchase goods and services from the local populace. The amount of money your unit was given was directly in proportion to the size of your unit. My unit was the Group HQ staff, about 45 people directly at my location (they didn't count the other 250 people I was in charge of, as they were spread throughout the country and would receive their own money).
So, I send my Chief Master Sgt and Senior Enlisted Advisor to the Army CA's office for a meeting on how and when we could expect the funds. The come strolling in later that afternoon, and stop by my office.
Me: "So Chief, how did it go? Are we getting any funds, we could use some new furniture here."
Chief: "Great, sir! They're gave us $20K!"
Me: "Really? Great news! Do we need to set up an account somewhere or file some paperwork to get access to the fund site? I'd like to get moving on this before everyone else here buys up all the good stuff."
Chief: "Oh no, sir! They gave me cash!"
Me (Shocked): "Cash???!!!"
Chief: "Yep" And he proceeds to pull a thick roll of brand new hundred dollar bills out out of his pants pocket. True Gangsta style...
Me (even more shocked): "Jeepers Christmas! (Not really what I said, but close). They just GAVE you a roll of money? What's you're plan for keeping track of this"
Chief: "Easy. We go out and spend it and get a receipt.The Army said they'll take any receipt, even a hand written note."
Me (getting more and more amazed at the idiocy of the whole situation by the minute): "Well, what's your plan for documenting and controlling this cash"
Chief (smile growing by the minute): "Just as simple. I'll hold the cash, the Senior will keep and track the receipts"
Me (seeing the potential for fraud, waste and abuse on a scale that would put Maddoff to shame): "Well, once you come up with a plan for the spending, let me know. I want to get the best bang for the (multiple) buck"
Chief: "No worries sir. The army said once we spend all this, they'll just give us more, no questions asked. And they said they'll keep doing that until told to stop."
Me (envisioning my future potential court martial for not stopping this in its tracks): "Uh, let's me add a FEW wrinkles to you plan to track this. Sit down Chief. Oh, and hand over that cash...."
Just a single example of the "temtpations" that were there in regards to the ridiculous amounts of cash just being thrown around that place with little to no oversight. For most, integrity and honesty kicks into high gear and you naturally do the right thing (the little Bullet on my right shoulder was nearly apoplexic, jumping up and down while screaming, "Bullet! Don't even Go there!" I think he even went over and punched the not-so-nice Bullet on my other shoulder in the face and told him to shut up
). For a sorry few, the temptation to take "just a little, nobody's tracking this, and there is SO MUCH they'll never miss it" was just too great. I guess they listened to the guy on the wrong shoulder...
And I'm spent (again)....