In addition to the improper sale of sensitive defense-related items, we have  also reported that the sale of demil code A and other nonsensitive military  items can result in waste and reduces the efficiency of DOD operations. Sensitive and Stolen Defense-Related Items Available on the Internet to the Highest Bidder

We found numerous defense-related items for sale to the highest bidder on  eBay and Craigslist from January 2007 through March 2008. Undercover  investigators purchased a dozen sensitive items to demonstrate how easy  it was to obtain them. The items were shipped to us “no questions asked.”  Many of these items were stolen from the U.S. military. According to DOD,  it considers the sensitive items we purchased to be on the U.S. Munitions  List, meaning that there are restrictions on their overseas sales. However,  if investigators had been members of the general public, there is a risk that  they could have illegally resold these items to an international broker or  transferred them overseas. In  addition to the threat that sensitive items could be used directly against  U.S. troops or allies, criminals could take advantage of some sensitive  items to commit domestic crime. Sensitive defense-related items could  also be reverse-engineered to develop countermeasures or equivalent  technologies. Sensitive and Stolen Defense-Related Items Purchased on the Internet

Our investigators purchased a dozen sensitive defense-related items from  Internet sellers during the period of our review. Munitions List, meaning that there are restrictions on  their overseas sales. We were unable to determine how this part became  available to the general public. Our intent  was to demonstrate that the general public can purchase, over the  Internet, all the gear necessary to dress and look like a U.S. service  member. Other Defense-Related Items

Our investigators also identified examples of U.S. government property— both sensitive and nonsensitive—that was likely stolen and sold for  personal profit rather than being utilized by DOD (i.e., conversion of  government property). Civilian Sellers of Stolen Property

We identified two civilian sellers with eBay store fronts who bought  defense-related items from service members and sold these items to the  general public on eBay. Gun-Store Owner. We  cross-matched the names of the individuals who sold items to the gun- store owner with the DEIDS database to determine whether any of the  sellers were currently serving in the military. eBay and Craigslist Have Few Safeguards to Prevent the Sale of Stolen and Sensitive U.S. Military Items

Advertisements for the sensitive defense-related items we purchased were  not removed by eBay and Craigslist Web site administrators, allowing us to  complete the transactions. Both Web sites maintain published lists of  items that are prohibited from sale, including stolen items, but only eBay  contains warnings related to sensitive defense-related or export-controlled  items even though both Web sites have an international reach. The official stated that the Fraud Investigations Team also proactively  refers cases to relevant law enforcement agencies for further investigation  and prosecution. Because these items are not included  on the list, Craigslist officials and users are unlikely to prohibit these sales.
Why GAO Did This Study

Unauthorized individuals, companies, terrorist organizations, and other countries continue their attempts to obtain sensitive items related to the defense of the United States. The Internet is one place that defense-related items can be purchased, raising the possibility that some sensitive items are available to those who can afford them. In addition to the risk that sensitive defense-related items could be used to directly harm U.S. service members or allies on the battlefield, these items could be disassembled and analyzed (i.e., reverse engineered) to develop countermeasures or equivalent technology. Given the risks posed by the sale of sensitive defense-related items to the public, and the Internet's international reach and high volume of commerce, the Subcommittee asked GAO to conduct undercover testing to determine whether the general public can easily purchase these items on the Internet, including on the Web sites eBay and Craigslist. To perform this work, GAO investigators used undercover identities to pose as members of the general public, meaning that they conducted their work with names, credit cards, and contact information that could not be traced to GAO. Investigators interviewed sellers where possible and referred cases to the appropriate law enforcement entities for further investigation.

What GAO Found

GAO found numerous defense-related items for sale to the highest bidder on eBay and Craigslist. A review of policies and procedures for these Web sites determined that there are few safeguards to prevent the sale of sensitive and stolen defense-related items using the sites. During the period of investigation, GAO undercover investigators purchased a dozen sensitive items on eBay and Craigslist to demonstrate how easy it was to obtain them. Many of these items were stolen from the U.S. military. According to the Department of Defense (DOD), it considers the sensitive items GAO purchased to be on the U.S. Munitions List, meaning that there are restrictions on their overseas sales. However, if investigators had been members of the general public, there is a risk that they could have illegally resold these items to an international broker or transferred them overseas. GAO investigators also identified examples of U.S. government property that was stolen and sold for a profit rather than being utilized by DOD. For example, GAO found two civilian store owners who acted as conduits for defense-related property that was likely stolen from the military. The store owners told GAO they purchased gear from service members--including Kevlar vests, flak jackets, and gas masks--and sold it through eBay to the general public. GAO also purchased stolen military meals, ready-to-eat (MRE) and found a robust market for stolen military MREs on eBay and Craigslist. Advertisements for the sensitive defense-related items GAO purchased were not removed by Web site administrators, allowing investigators to buy the items. Both Web sites maintain lists of items that are prohibited from sale, including stolen items, but only eBay contains warnings related to overseas sales and the improper sale of sensitive defense-related items.