The Pentagon commissioned a major study on how it spent its money, but tried to bury the investigation when it revealed $125bn (£98.74bn) of its annual budget was wasted on administration costs.
Military leaders requested the study to make its massive back-office bureaucracy more efficient, but when the extent of waste was revealed, it was feared Congress and President-elect Donald Trump might use the report to slash their budget.
It showed that more than a quarter of the department's annual $580bn (£458.16bn) was being wastefully spent in areas such as accounting, human resources and property management.
Investigative journalists Craig Whitlock and Bob Woodward of the Washington Post uncovered the scandalous revelation, which showed that officials placed secrecy restrictions on the report meaning it could not be found or replicated.
Woodward uncovered the infamous Watergate scandal during the Richard Nixon administration alongside Carl Bernstein.
Whitlock and Woodward's findings showed that the Defence Department had a "clear path" to make the $125bn savings, without job losses or reductions in military personnel.
The study was put together by the Defence Business Board alongside consultants from McKinsey and Company.
Robert Stein, who served as chairman of the Defense Review Board, told the Post: "They're all complaining that they don't have any money. We proposed a way to save a ton of money."
He said the study's data were "indisputable" and that it was "a travesty" for the Pentagon to suppress the results.
"We're going to be in peril because we're spending dollars like it doesn't matter," he added.
The missed opportunity to streamline the military bureaucracy could soon have large ramifications, the Post reported.
Under the 2011 Budget Control Act, the Pentagon will be face $113bn (£89.26bn) in automatic cuts over four years unless Congress and Trump can agree on a long-term spending deal.
That may be difficult with Trump pledging on the campaign trails that he aims to "eliminate government waste and budget gimmicks."