Credit card abuse details widen

Purchase Cards: Control Weaknesses Leave Army Vulnerable to Fraud, Waste, and Abuse

The latest in a series of hearings looking at waste, fraud and abuse of government-issued credit cards described Army personnel who used the cards to pay for cruises, gamble online and get cash for use at strip clubs.

"The General Accounting Office has found everything but the kitchen sink. And now we found that, too," Sen. Charles Grassley (R-Iowa) said. "We have found government employees using their cards to make mortgage payments and pay closing costs, to buy cars, an engagement ring, racetrack betting, Elvis photos from Graceland, a framed John Elway jersey, a trip to the Rose Bowl game, and even Caribbean cruises. You name it. They're doing it," Grassley said in his testimony.

The July 18 hearing by the House Government Reform Committee's Government Efficiency, Financial Management and Intergovernmental Relations Subcommittee focused on the Army and was the latest in a series of audits looking at the Defense Department's weak management of the credit cards.

And lawmakers were clearly tired of hearing about problems.

Rep. Stephen Horn (R-Calif.), the subcommittee chairman, noted that the previous hearings examined problems at two Navy facilities. "At the time, we did not know whether these abuses were unique to these two facilities or whether they were symbolic of a much broader problem." But given the findings, he said that the problem is pervasive.

"The purchase card program may have been a promising idea when it was devised, but the management at the Defense Department has turned it upside down," said Rep. Janice Schakowsky (D-Ill.), the committee's ranking member. "A program that was designed to streamline bureaucracy has, instead, made it easier for an employee to buy personal items -- and on the federal government's tab."

DOD has been working to improve management of the program by slashing the number of cards issued across the department and reducing the number of cards that supervisors can oversee at one time so they can keep better tabs on purchases, said Deidre Lee, director of Defense procurement.

The overall scope of the problem is unclear, GAO said, because DOD does not maintain information on fraud cases.

Horn promised still more hearings on the issue before he leaves office at the end of this term.