http://www.gao.gov/new.items/d0488.pdf#search='us%20gao%20military%20in%20busin ess%20class'

This may interest some of you - GAO report on how ineffective controls led to a lot of premium class travel in the DOD (2003).

That said - I think it would be only fair to let senior government/DOD officials fly business on ultra long-haul flight. I cringe at the thought of our Ambassadors sitting in Y on their intercontinental flights while junior-level diplomats from other countries sit in C. When it comes to perception - it just looks cheap.