Charging It To Uncle Sam

Does figuring out how to pay for your girlfriend's breast enlargement surgery have you worried?

No problem if you're a Department of Defense employee. Just charge it to Uncle Sam.

One former DOD worker did just that. Charging the surgery, part of $35,000 in charges over two years, on his government credit card.

" ... it appears he spent most of the money romancing a waitress he met at the Hooters bar and grill in Jacksonville, Florida," Sen. Charles Grassley, R-Iowa, told a House Government Reform subcommittee. "After they got to know each other, she asked him for money to have a breast enlargement operation."

And, as CBS News Correspondent Bob Orr reports, DOD employees have also used the cards for everything from junkets to casinos and strip clubs to personal shopping sprees.

The man who sprang for the breast surgery eventually paid the bill, but thousands of other defense workers have stuck banks and taxpayers with their personal charges, the Congressional investigation has revealed.

Seven hundred military officers have walked away from debts on their government-issued credit cards. One former San Diego Navy civilian employee who charged thousands in personal expenses has even been promoted to the office that oversees Army finances.

Testifying Wednesday, Grassley said those disclosures and the findings of a continuing General Accounting Office investigation show that credit card abuse isn't being taken seriously at the Pentagon.

"DOD credit cards are being taken on a shopping spree and the cardholders think they are immune from punishment. And they are," Grassley told the House subcommittee.

Defense procurement director Deidre A. Lee disputed Grassley's claim. She said the Pentagon has taken significant steps in the past year to tighten controls over credit cards and to better train the employees who use them.

"We are painfully aware of the issues of purchase cards and I am here personally to commit that we will make sure these cards are used appropriately," Lee said.

More than 46,000 Defense Department employees had defaulted on $62 million in official travel expenses charged to the government cards as of last November. The bad debts, which banks that issue the cards have been forced to write off, are growing at the rate of $1 million a month, according to Grassley.

Last year, 1.7 million Pentagon charge cards were used for purchases totaling more than $9 billion. Most of the cards are for official travel and are billed directly to employees, who are responsible for paying the bills and getting reimbursement from the government.

About 200,000 DOD workers have purchase cards which can be used for goods and services up to $2,500. Those are billed directly to the government.

Grassley and Rep. Stephen Horn, R-Calif., chairman of the subcommittee, said they intend to ask Defense Secretary Donald H. Rumsfeld to determine what action should be taken against 713 commissioned officers who have defaulted on $1.1 million in charges on their government-issued travel cards.

"Somebody over in the Pentagon needs to come down hard on the officer scofflaws," said Grassley, who provided the panel with a confidential list of the officers. "Credit card abuse in the military will never stop until the officers clean up their act."

Grassley said the accounts of the officers have been unpaid for seven months or more and include individual balances of up to $8,000. He said the officers range from lieutenants to colonels and a Navy captain.

In one example, Grassley said Tanya Mays, a civilian employee, charged nearly $12,000 in personal expenses on her government purchase card while working at the Navy Public Works Center in San Diego, and then was promoted to the Army's top financial management office in the Pentagon.

Mays was never disciplined and has never been asked to repay the government for any of the purchases, which included a computer, a kitchen appliance, gift certificates, clothing and groceries, Grassley said.

"When you put one of these cases under the microscope," he said, "it seems like the whole problem comes into much sharper focus,"

Mays did not respond to requests for comment that were relayed through the Army press office.

Evidence of unauthorized personal purchases by Mays was cited last summer by GAO investigators auditing the Navy Publics Works Center. The case was referred to the Naval Criminal Investigative Service, but an assistant U.S. attorney in San Diego declined to prosecute.

Mays was promoted to the Army job at the Pentagon in October.