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WASHINGTON -- The Coronavirus Aid, Relief and Economic Security (CARES) Act, which Congress passed earlier this year, gave the Pentagon $1 billion to "prevent, prepare for, and respond to coronavirus."

But a few weeks later, the Defense Department began reshaping how it would award the money in a way that represented a departure from Congress' intention.

This article is based on a review of public records, individual contract announcements, congressional testimony and interviews with people involved in the spending decisions.

In the months after the stimulus package was passed, the Pentagon changed how the money would be used. It decided to give defense contractors hundreds of millions of dollars from the fund, mostly for projects that have little to do with the coronavirus response. Defense Department lawyers quickly determined that the money could be used for defense production, a conclusion that Congress later disputed.

After the Washington Post reported the funding changes in an online article Tuesday, two House Democrats called for an investigation and public hearings on the matter, questioning the legality of how the money was used and calling it "unacceptable."

The payments were made even though U.S. health officials think major funding gaps in pandemic response remain.

Robert Redfield, director of the Centers for Disease Control and Prevention, said in Senate testimony last week that states need $6 billion to distribute vaccines to Americans early next year. Many U.S. hospitals still face a shortage of N95 masks.

"This is part and parcel of whether we have budget priorities that actually serve our public safety or whether we have a government that is captured by special interests," said Mandy Smithberger, a defense analyst at the Project on Government Oversight, a watchdog group.

Department of Defense officials contend that they have sought to strike a balance between boosting American medical production and supporting the defense industry, whose health they consider critical to national security.

The Pentagon, which as of 2016 employed more than 156,000 people working in acquisitions alone, also has lent its expertise to the Department of Health and Human Services as it seeks to purchase billions of dollars in needed medical equipment.

"We are thankful the Congress provided authorities and resources that enabled the [executive branch] to invest in domestic production of critical medical resources and protect key defense capabilities from the consequences of covid," Ellen Lord, the Pentagon's undersecretary for acquisition and sustainment, said in a statement. "We need to always remember that economic security and national security are very tightly interrelated and our industrial base is really the nexus of the two."

The $1 billion fund is just a fraction of the $3 trillion in emergency spending that Congress approved earlier this year to deal with the pandemic. Some defense contractors received the Pentagon money even though they had already dipped into another pot of bailout funding, the Paycheck Protection Program.

Congress, at President Donald Trump's urging, is debating whether to pass another stimulus package, and the Pentagon and defense contractors have called for an additional $11 billion to be directed toward their programs.

The $1 billion fund was allocated under the Defense Production Act, which allows Trump to compel U.S. companies to manufacture products in the nation's interest.

Trump has described the law as a "tremendous hammer" and said in August that he has "used the DPA more comprehensively than any president in history." His administration was under intense pressure this spring to use the law to address dire shortages in medical-grade masks and other supplies.

Among the Pentagon's awards using the coronavirus money were $183 million to firms including Rolls-Royce and ArcelorMittal to maintain the shipbuilding industry; tens of millions of dollars for satellite, drone and space surveillance technology; $80 million to a Kansas aircraft parts business suffering from the Boeing 737 Max grounding and the global slowdown in air travel; and $2 million for a domestic manufacturer of Army dress uniform fabric.

The House Committee on Appropriations has made clear that the Defense Department's decision to funnel the Defense Production Act funding to defense contractors went against its intent in that section of the CARES Act, which was to spur the manufacturing of personal protective equipment.

"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 wrote in its report on the 2021 defense bill.

Pentagon officials counter that they have been fully transparent with Democrats and Republicans in Congress about their plans for the money.

Information for this article was contributed by Neena Satija and Alice Crites of The Washington Post.


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