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 $1,100 over 15 months for two online services, including the Ashley Madison Agency. The expenses went unnoticed for more than a year even though he was under internal investigation for viewing pornography on a government computer. The postmaster was eventually told to repay the Internet charges but faced no disciplinary action.
"Too many government employees have viewed purchase cards as their personal line of credit," said Sen. Norm Coleman, R-Minn., the top Republican on the Senate Homeland Security subcommittee on investigations, which requested the GAO report. "When money that was intended to pay for critical infrastructure, education and homeland security is instead being spent on iPods, lingerie and socializing, we must immediately remedy the problem."
Sen. Carl Levin, D-Mich., who chairs the investigations subcommittee, agreed. "Although internal controls over government credit cards have improved, we still have a long way to go to stop the fraudulent use of these cards," he said.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 96 CommentsThis story will be buried in a flash!
Business as usual for the Bu$h administration,
wonder who will be promoted this time?
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.
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.
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.
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?
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.
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!!!!
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.
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