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There’s no accounting for human costs

ALBUQUERQUE, N.M. — A company called Richmor Aviation sued another company called Sportsflight Air Inc. in 2009 over an unpaid bill of $1.1 million.

Richmor claimed that it provided exclusive use of a luxury Gulfstream IV jet to Sportsflight on the understanding that Sportsflight would pay for a minimum of 50 flight hours per month, whether the plane was used or not. Sportsflight refused to pay for hours it didn’t use.

Richmor’s website says it caters to clients “who demand the ultimate in safety, luxury and speed – worldwide.”

The passengers on the company’s plane were in the custody of the CIA. They had been kidnapped or captured and were ferried by Richmor to torture chambers around the world. In the euphemisms of the time, they were part of the CIA’s “extraordinary rendition” program and were to undergo “enhanced interrogation techniques” at “black sites.” Richmor and Sportsflight were subcontractors to the CIA.

To these companies, transporting people to meet their torturers was just another business opportunity, no different from transporting rock stars to their concerts, said Michele Chwastiak, associate professor of accounting at the University of New Mexico Anderson School of Business. Company accounts don’t care who’s on the plane.

Chwastiak calls accounting a “thought system” that can be used both to enlighten a business’s decision-makers and to obscure essential information that should guide the decision. When the business is the United States military and the decision is whether to wage war, the stakes could not be higher.

Chwastiak has been studying the way budgeting and accounting affect military decision-making ever since she was a University of Pittsburgh graduate student looking at contracting data stored at Wright Patterson Air Force Base, near Dayton, Ohio. Some of her earliest papers looked at the way Defense Secretary Robert McNamara’s approach to budgeting and systems management transformed perceptions of nuclear war within the Pentagon from an unthinkable calamity to a management problem that needed a solution.

Her most recent book, “Accounting at War,” co-written with Warwick Funnell, was published last year.

“Thought mechanisms let us gloss over torture, they let us gloss over deaths, they let us avoid certain decisions,” Chwastiak said. “How many mothers are going to lose sons and daughters? How many soldiers are going to end up on the street? How many refugees will we create? None of these considerations are captured in accounting.”

Accounting provides decision-makers with a way to think about death and destruction without actually having to think about death and destruction.

Speaking of the Richmor case, Chwastiak said, “There is nothing in accounting that tells us what acts underlay the generation of revenue.” The court record in the Richmor case has the occasional mention in passing of extraordinary rendition, but in the accounting context, it was just another billing dispute. “They didn’t make enough money on their torture flights,” Chwastiak said. The value-neutral language of accounting allows companies to participate in evil acts “without having to think about them.”

“I look at how accounting influences our perception of war,” Chwastiak said in an interview. It is what accounting does not say that makes the difference.

“War budgets capture short-term expenditures for ammunition, extra pay, transportation. That’s all the budget is. When Congress used to debate going to war, the war budget said nothing about the death and destruction of your country and of theirs.”

The true cost of war “is phenomenally larger.” Veterans benefits alone are in the billions of dollars over a period of decades. If accountants were required to factor in the total cost of going to war, Chwastiak said, Congress and the Pentagon might make a different decision.

Decisions not nearly as dramatic as war and peace are similarly skewed by the accounting thought system.

All business decisions ultimately come down to finding the best path to profitability. Accounting helps draw the map, Chwastiak said, but the map does not show everything.

A common business problem is deciding whether to make something your company needs or to buy it. Computer companies used to make everything themselves, from keyboards to disk drives. Over time, it became clear that buying disk drives from a company that makes nothing else was a better path to profitability than making them yourself. Any first-year finance student knows how to do the calculation.

What accounting does not show is what became of the 500 people who used to make disk drives for the computer company. It doesn’t show what happened to the community when the computer company shut down its disk drive plant.

UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 823-3896 or Go to to submit a letter to the editor.