WASHINGTON, April 9, 2008
Report: Millions Blown On Government Cards
GAO Says Federal Employees Paid For Online Dating, Suits And Lingerie With Federal Credit Cards
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Play CBS Video Video Gov't Credit Card Abuse An audit has found widespread abuse of government credit cards including the purchase of extravagant dinners, lingerie and online dating services. Chip Reid reports.
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A report by the Government Accountability Office examined spending controls across the federal government following reports of credit-card abuse at departments including Defense, Homeland Security and Veterans Affairs.
The review of card spending at more than a dozen departments from 2005 to 2006 found that nearly 41 percent of roughly $14 billion in credit-card purchases, whether legitimate or questionable, did not follow procedure - either because they were not properly authorized or they had not been signed for by an independent third party as called for in federal rules to deter fraud.
For purchases over $2,500, nearly half - or 48 percent - were unauthorized or improperly received.
Out of a sample of purchases totaling $2.7 million, the government could not account for hundreds of laptop computers, iPods and digital cameras worth more than $1.8 million. In one case, the U.S. Army could not say what happened to computer items making up 16 server configurations, each of which cost nearly $100,000.
In one example, CBS News correspondent Chip Reid reports, a forest service employee used her card to funnel $642,000 - money intended to fight forest fires - to her boyfriend who used it for everything from gambling to shopping. The employee is now serving 21 months in prison.
Agencies often could not provide the required paperwork to justify questionable purchases. Investigators also found that federal employees sometimes double-billed or improperly expensed lavish meals and Internet dating for many months without question from supervisors; the charges were often noticed only after auditors or whistle-blowers raised questions.
"Breakdowns in internal controls over the use of purchase cards leave the government highly vulnerable to fraud, waste and abuse," investigators wrote, calling the governmentwide failure rate in enforcing controls "unacceptably high."
"This audit demonstrates that continued vigilance over purchase card use is necessary," the 57-page report stated.
The report calls for the General Services Administration and Office of Management and Budget, both of which help administer the government's credit-card program, to set guidance to improve accounting for purchased items, particularly Palm Pilots, iPods and other electronic equipment that could be easily stolen.
OMB and GSA were also urged to tighten controls over convenience checks, which are a part of the credit-card program, and to remind federal employees that they will be held responsible for any items if the purchases are later deemed improper.
Fast Fact
In response, both OMB and GSA agreed with portions of the report. But GSA administrator Lurita Doan noted the vast majority of federal employees use their cards properly and that many oversight measures already are in place. She acknowledged there is room for improvement but added that by using purchase cards the federal government saves about $1.8 billion in administrative costs each year.Justice Department and FBI employees charged $11,000 at a Ritz Carlton hotel for coffee and "light" refreshments for 50 to 70 attendees for four days.
"We agree that no level of abuse or misuse is acceptable," Doan wrote.
The GAO study comes amid increasing scrutiny of purchase cards, which are used by 300,000 federal employees and are directly payable by the U.S. government. Minnesota Sen. Norm Coleman requested the investigation, Reid reports.
"These things were being paid at government expense," he said. "Government purchase cards and nobody looked at the bill."
The AP reported Sunday that VA employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers such as Sharper Image. Government auditors have been investigating these and similar charges, citing past spending abuses.
In Tuesday's report, investigators did not seek to determine the extent of fraud or waste at each agency. They cited numerous cases of questionable spending, which they said represented what could be found government-wide, including the VA.
"The purchase card is a useful tool for the government, and in no way are we suggesting it shouldn't continue to be used widely," said Gregory D. Kutz, GAO's managing director of forensic audits and special investigations, in a telephone interview. "However, I would say these cases once again show that lack of internal controls cost taxpayers millions of dollars and thus continued focus is needed on improving these controls."
Among the expenditures cited in the report:
In the Internet dating case, a postmaster charged $1,100 over 15 months for two online services, including the Ashley Madison Agency. The expenses went unnoticed for more than a year even though he was under internal investigation for viewing pornography on a government computer. The postmaster was eventually told to repay the Internet charges but faced no disciplinary action.
"Too many government employees have viewed purchase cards as their personal line of credit," said Sen. Norm Coleman, R-Minn., the top Republican on the Senate Homeland Security subcommittee on investigations, which requested the GAO report. "When money that was intended to pay for critical infrastructure, education and homeland security is instead being spent on iPods, lingerie and socializing, we must immediately remedy the problem."
Sen. Carl Levin, D-Mich., who chairs the investigations subcommittee, agreed. "Although internal controls over government credit cards have improved, we still have a long way to go to stop the fraudulent use of these cards," he said.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Add a Comment See all 96 Comments
- This is an outrage!! Where to begin? As a business person, we know the rules! What are FBI and Justice officials doing staying at a Ritz Carlton? You can''t get in there for less than $300 per night. Why do so many people have Purchasing Cards? At my company, this is severely restricted and controlled with spending limits, etc even for SEnior Execs. The Govt has no management controls or ability!!
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This story will be buried in a flash!
Business as usual for the Bu$h administration,
wonder who will be promoted this time?- Reply to this comment
- Im going to get a job at the post office to defraud the government out of $600,000 and even if i get caught i apparently dont have to pay the money back just spend a year or so in jail and ur out! That sounds like the real american dream now a days - steal money from the retarded government - dont have any consequenses and live the rest of your life on someone elses money - this sad a$$ dream just made me want to cry america is now the butt of jokes all over the world, we have no respect for our selves let alone acting respectfully toward other cultures.
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- "Any charges for gay hookers and meth on the GOP credit card?
How about hookers, or sexxx trips to Thailand for govt officials?
Any gambling junkets to Vegas?
This is all typical typically scandalous GOP behavior under Bush. It''''s probably not much worse than previous administrations, just costs more now since our dollar isn''''t worth as much under Bush.
Posted by gce65 at 11:19 PM : Apr 09, 2008"
Maybe you should ask Democrat Barney Frank:
On Aug. 25, 1989, The Washington Times revealed Rep. Barney Frank''s male-prostitution scandal. Frank''s prostitute-later-lover, male prostitute Stephen Gobie, ran an illicit gay s.e.x. ring out of Frank''s home, and Frank fixed his local parking tickets. - Reply to this comment
- The Clintons have made a $100-million fortune since leaving the White House, but a Politico analysis found that hasn%u2019t kept Bill Clinton from taking full advantage of the publicly funded perks offered to ex-presidents.
In fact, his presidential retirement benefits cost taxpayers almost as much as those of the other two living ex-presidents combined.
The price tag for Clinton%u2019s federal retirement allowance from 2001 through the end of this year will run $8 million, compared to $5.5 million for George H. W. Bush%u2019s and $4 million for Jimmy Carter%u2019s during the same period.
Since 2001, Clinton has received more of almost every benefit available to former presidents %u2014 from his pension to his staff%u2019s salaries and benefits to supplies. His $420,000 phone bill and $3.2 million office rent tab both nearly surpassed the totals rung up for those purposes by Bush, Carter and the late former presidents Gerald Ford and Ronald Reagan combined. As a group, they spent $484,000 on telephone service and $3.8 million on rent in the same span.
The figures come from congressional reports studying the presidential retirement program and from summaries of annual budget requests by the U.S. General Services Administration, which administers the program, created to allow former presidents to enjoy dignified retirements without having to take jobs that demean or commercialize the presidency. - Reply to this comment
- These dummy''s cant complain! www.theoandavirus.com
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- Bush said it was okay! So what''s the problem?
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- Oh, yes, I forgot, MASSIVE CORRUPTION too!
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- The rest of the world must be laughing they''re a$$es off at us, this country is almost nothing more than a joke at this point. The neoCONS have done a great job. It''s the party of crime. Money, power and pedophiles.
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- There was a time I would have returned this money, Not anymore. I haven''t seen the "Right Thing to Do" from anyone for so long, it''s getting tough to recognize it.
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- *** it! i want to read some follow-up articles regarding several hundred dismissals! you can bet there would be if this kind of fraud & theft were to be discovered in the private sector. c''mon bush, let''s see some accountability; and i''m talking about all the way up the line: all levels of management - not just the little guys & girls....
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- hey will be procecuted, and I guarantee you, they WILL pay back the money, and their careers are OVER. Most fed employees are just working stiffs like the rest of the working community. I gotta say though, what the H were they thinking??? What a bunch of idiot losers. Their life is going to be a stinking hell from now on, and their actions will follow them the rest of their life with fraud charges and convictions.
Posted by sleepyric at 07:38 AM : Apr 09, 2008
Wrong. The article states other than paying the money back, no punitive measures were taken. it all depends whose in charge and what office. Your remarks about careers being over and jail time is mostly wishful thinking on your part--wish that it were true though--we don''t need this craaaap. - Reply to this comment
- Given that an individual human holds the cards, some abuse is to be expected which is why there is supposed to be significant oversight. However, there is also the problem with how outyear budgets are apportioned. If you didn''t use it this year, you won''t get it next year. This year, your transport fleet or your laptops or your diagnostics panels are still under warranty but next year they are not and maintenance costs will go up. Even if you write in so in your outyear budget, you won''t get the money because you didn''t spend last year''s budget. So some commands ignore or even encourage (as one poster already noted) abuse to ensure their budgets get used. It isn''t just the government, as can be seen with the airlines. Tighter and tighter budgets mean fewer and fewer new items and pretty soon it all grinds to a halt because things wear out and there is no money to replace them.
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- Couple of things: these are not the travel cards issued to government employees to use for work related travel expenses, these are cards issued to someone in purchasing to purchase items valued under $25,000. The cards were created when the government did away with bulk purchasing of small items such as pens, tablets, paperclips and the like when it was determined that this was in competition with private industry and against the law and inefficient (buy them at OfficeMax.) Since the level was $25,000 per card, some agencies used them to purchase less prosaic items such a blade servers or thumb drives or turret seat slings. Again, it was considered more fiscally responsible to allow single site purchases of such items through the cards than to have Logistics hold quantities of these items in warehouses for distribution upon request.
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- This is only the latest revelation of scandal against the public trust by the dying Bush regime.
By now, it should be clear the same lack of integrity that pervades the ranks of Bush appointees at FEMA, FDA, FAA, and other agencies is the true Bush legacy-- which Bush leaves for others to clean up.
Posted by alphaa10 at 12:33 AM : Apr 09, 2008
Please just save it. These are CAREER government employees. This means it spans all parties and goes back to the time cards were issued. Because lower level people aren''t that easily changed when administrations changed. I guarantee that some of the thieves are Democrats or Independents or even --political agnostics. All they need is their greed and a disrespect of the public trust. Those attitudes can be had by ANY party in government. What did Spitzer use to charge for his hooker nights? - Reply to this comment
- A Drop in the bucket compared to SHRUBS WASTE
It takes Bulldozers to move the Money SHRUB has Wasted!
Posted by neobrian at 11:51 PM : Apr 08, 2008
Still, every single little drop--HURTS. They all should be fired. Not reprimanded, not made simply to pay the money back--fire them, shred the cards and only make one person in each dept have one and make them financially and legally liable for any discrepancies. The cards are nothing but shopping sprees made at tax payer expense. Then people wonder why some do not want to ever pay taxes. - Reply to this comment
- Funny how no one is really getting in trouble. Know why? Probably because they ALL (or most of them are doing similar things) so they wink wink the damage. What are the people in the GAO buying? All who abuse the cards should be FIRED period. It is embezzling and when people do it in the private sector they can face from simply firing to jail time!!! LAX enforcement and no true punitive measures--what ails our economy. Fire them all!!! Time for a new crop.
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- Ditch the cards. The Government is notorious for being a corrupt spending spree venue--Credit cards only makes this corruption and abuse available to even more government employees. All who bought things they should not have (like lingerie and other "they should know better than that" stuff) should be FIRED. All of them.
It''s so easy to go crazy and spend money like a drunken fool---when one does not personally have to earn it or repay it. right, Hillary? PAY THOSE DAMNNNN DELINQUENT CAMPAIGN BILLS!!!
Use the money Elton John just made for you if you have to. If you keep letting it slide--don''t expect to handle our taxpayer money if you can''t even manage debts in your campaign!!!! - Reply to this comment
- I expected the candidate endorsed by the religious right to select people with some morals to run these departments. Looks looks like they hide behind the bible while they pick our pockets.
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- "Report: Billions unaccounted for in Iraq. Gateway1 remains strangely silent.
Posted by FloydZepp at 06:33 AM : Apr 09, 2008"
Nope, not at all. The card abuses they are talking about here are not limited Defense, Homeland Security and Veterans Affairs. These cards are used all through out the government, stateside and overseas. The point I am making is that these cardholders are supposed to have their monthly statements reviewed every month. If that isn''t being done, it''s the fault of the reviewer, and they should also be held accountable, since they have to sign off on every item on those statements.
I know this as a fact because I was a cardholder and a card reviewer at different times while I was on active duty. As a cardholder, if I didn''t submit my statement on time, I could have gotten into serious trouble. When I was a card reviewer, I had to first go through training on itemization of purchases, review procedures, and all that. If I didn''t properly vet ALL purchases by the cardholders I was placed in charge of, I could have faced prison time.
I say, hold these people''s feet to the fire, and punish them No excuse for NOT doing their jobs. - Reply to this comment
The road ahead in Afghanistan, and the crucial decision Obama faces.
