A significant number of Pentagon employees used their government credit cards to pay for "adult entertainment" and gambling fees, according to a Department of Defense inspector general's report reviewed by Politico.
Civilian and military employees used the credit cards to pay for escort services and other adult activities while in Las Vegas and Atlantic City, N.J., according to the inspector general's audit of "Government Travel Charge Transactions." The report will be released in a few weeks.
A Pentagon official stressed to Politico that the federal government wasn't necessarily on the hook for the charges, though. Individual cardholders are responsible for their own bills and are reimbursed for government-related expenses after receipts have been submitted. The official speculated that the employees were likely trying to hide the spending from their spouses.
"Because the review was an audit of the credit card system and not an investigation of particular individuals, the official said the likely result will be that the agencies and military branches most affected will be compelled to remind employees that the practice violates policy - and possibly the law," reported Politico.
In 2012, President Obama signed the "Government Charge Card Abuse Prevention Act," sponsored by Sen. Chuck Grassley, R-Iowa. The law mandated that federal agencies more closely monitor purchases made on government-issued credit cards.
Grassley said in a statement that the bill requires periodic audits to ensure agencies are monitoring credit card abuse.
"I'm interested to see the report and find out more about what's being done, right and wrong, at DoD to prevent abuse," he said in a statement, according to Politico. "What I hope is that my reforms that became law have been implemented well and that agencies and auditors are using the reforms to catch problems."
Grassley added: "The law requires periodic audits by inspectors general, like this one, specifically to keep on top of charge card abuse and hold agencies accountable for implementing the required internal controls. That's especially true with purchase cards, where taxpayer money is directly involved even more than with travel cards, but the reforms should prevent travel card abuse, too. If everything is implemented as intended, we'll stop a lot of purchase card and travel card abuse."
Government-issued credit card abuse is believed to cost the government millions of dollars per year.
The following are a few examples of charge-card abuse discovered in recent years, according to The Washington Post:
• Job Corps employees in Miami spent nearly $100,000 on personal expenses, including trips to hair salons, clothing stores and cellphone service providers. The Department of Labor inspector general said in a report this year that 98 of the program's 125 centers nationwide had misused government debit cards and none of them monitored card activity.
• The Bureau of Land Management spent about $800,000 on gift cards, with $70,000 of those purchases coming from the agency's Idaho office, according to a report this year from the Department of Interior inspector general.
• The Coast Guard spent more than $12,500 at a single Alameda, Calif., coffee shop in 2013. Department of Homeland Security Assistant Inspector General Anne Richards said that some of those purchases may have been legitimate, explaining that the Coast Guard uses charge cards to buy coffee for the dining pantries on board its cutters.
• EPA employees bought gym memberships in three instances, racking up charges that totaled nearly $3,000, with two of the purchases being for family members. Janet Kasper, an official with the EPA inspector general's office, testified that 94 percent of the charge-card purchases that auditors reviewed from the agency were not in compliance with EPA policies. She said nearly $80,000 in charges were prohibited, improper or erroneous.
