Pentagon Officials Indifferent to $1 Million Travel Card Fraud
Policy + Politics

Pentagon Officials Indifferent to $1 Million Travel Card Fraud

REUTERS/The Fiscal Times

Last May government auditors unveiled a juicy scandal at the Defense Department. Hundreds if not thousands of military personnel had run up more than $1 million on their government travel cards to finance good times at gambling casinos and adult entertainment centers.

The report by the DOD’s Office of Inspector General found that between July 2013 and June 2014, Pentagon travel card holders were responsible for 4,437 transactions at casinos around the country totaling $952,258 while there were 900 travel card transactions recorded at X-rated adult entertainment establishments or strip clubs totaling $96,576.

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The disclosure of rampant cheating on government credit cards that are authorized solely for official use outraged members of the Senate Armed Services Committee and prompted a request a further investigation. Lawmakers wanted to gauge how widespread the scam had become and whether there were serious security implications.

But when IG investigators recently turned up additional evidence that 22 of 29 newly targeted cardholders had run up 131 charges totaling $8,544 that appeared to be for personal use, they were greeted with a collective yawn from Pentagon officials who did little to try to get to the bottom of the problem, according to a new report. What’s more, the IG discovered that DoD had failed to take “appropriate action” when notified about the previous blatant and costly abuses of travel card privileges.

“Specifically, DoD management and travel card officials did not perform adequate reviews for the cardholders reviewed and did not take action to eliminate additional misuse,” the IG report declared.

“Additionally, DoD management did not initiate travel voucher reviews for cardholders with travel card personal use to determine whether cardholders received improper overpayments and did not consistently consider the security implications of improper personal use of the travel card prior to this audit.”

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Federal law requires the inspector general of every department or agency with more than $10 million in travel card spending to periodically review the travel card program to assess the risk of illegal, improper or erroneous purchases and payments. The findings of those audits and accompanying recommendations must be turned over to Congress and the Office of Management and Budget.

So it’s a relatively big deal when an auditor turns up examples of gross abuse of the travel cards, in which government employees are gambling or enjoying adult entertainment at taxpayers’ expense. Without a strict accounting of the credit cards, they could end up in the hands of criminals or blackmailers. The use of the cards by unauthorized personnel could also lead to a breach of national security.

According to the IG’s report, Defense Department officials chose not to take the matter seriously.

For instance, the report recounts how a Navy employee who spent $1,417 on adult entertainment was “retrained” and obliged to sign a statement of understanding indicating that the employee could only use his travel card for “PG-13” purposes, according to a summary table in the report. There was no further action taken against him. Another Navy worker who charged the government $1,078 in “adult” entertainment was given a “non-punitive letter of caution.”

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To be sure, the report documented a number of cases in which the military took punitive action, including a letter of reprimand, a temporary suspension of travel and even a reduction in rank for some of the most egregious violations. But frequently Pentagon officials were slow in responding or were relatively indifferent to the problem, according to the report.

The Deputy Assistant Secretary for Military Personnel Policy issued a response saying the department agreed with the IG’s recommendations but without stating what actions the Defense Travel Management Office would take to accomplish them.

A call to Capitol Hill on Thursday afternoon revealed that the Pentagon’s seeming indifference to the controversy isn’t going down well with some lawmakers.  Senate Armed Services Committee staff have begun an investigation of their own into the misuse of the travel cards.

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“If they [the Pentagon] don’t do anything about it and the IG has found some real problems where people are misusing the cards, etc., that’s a problem and they should be doing something about it,” said a congressional aide. “The committees of jurisdiction take a serious look at these issues when they pop, and we want to make sure people are held accountable.”