Army personnel continue to abuse government charge cards

Despite more than two years of congressional scrutiny and stiffer penalties, some Army employees continue to abuse government-issued travel and purchase cards, witnesses told lawmakers at a House hearing Wednesday. The Defense Department uses travel cards to eliminate the red tape and costs associated with making advance travel payments to employees. In fiscal 2001, 1.4 million employees charged $3.1 billion in travel costs to their cards. In fiscal 2001, Defense reported 207,506 charge card transactions valued at $6.1 billion. According to the General Accounting Office, the Army's charge card delinquency rate is the highest in the federal government. Numerous investigations by GAO have revealed that some Army personnel use the cards to buy personal items, a practice prohibited by the government. The number of abusive cardholders is unclear, GAO said, because information on fraud cases compiled by the Defense Department is unreliable. "The GAO has found everything but the kitchen sink. And now we've found that, too," Sen. Charles Grassley, R-Iowa, told the House Government Reform Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations. "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." Delinquent cardholders also have written bad checks to cover charge card payments, allowed the cards to be charged off by the bank, or pocketed the money the government reimbursed them rather than pay card charges. "One individual--a staff sergeant at Fort Jackson, S.C.--wrote 86 bad checks in 2001 alone totaling $270,000. That was against his unpaid balance of $36,000," Grassley said. "The staff sergeant's 86 bad checks should have come as no surprise. Before receiving his government cards, he had a criminal record for credit card fraud and bad checks…and used two Social Security numbers to perpetrate his crimes." While many of the witnesses stressed that most of the Army's cardholders used the cards responsibly and paid their bills for the cards on time, several lawmakers took Defense Department officials to task for allowing the abusive cardholders to continue using the cards. "This is a crisis worth millions of dollars…and it requires a much more aggressive attitude than what I am hearing from you and what we've heard time and time again at hearing after hearing on this issue," Rep. Janice Schakowsky, D-Ill., told Army Comptroller Sandra Pack, who testified at the hearing. According to GAO, the waste, fraud and abuse associated with the cards are directly related to poor financial management at the Defense Department, particularly the Army's practice of giving a travel card to any employee who applies for a card without reviewing the applicant's credit history. Army officials are also lax when it comes to reviewing travel card transactions, GAO said. "Pay attention, I think that would lower the delinquencies," said Special Agent John Ryan, assistant director of GAO's special investigations office. Last month, the Defense Department adopted a set of measures aimed at cracking down on the fraud and abuse, including reducing the number of card accounts a manager is responsible for overseeing and stiffening penalties for abusing cards. "I believe this is my personal responsibility to correct," Pack said, in a final appeal to lawmakers. "Let me work on this, and let me come back to you in six months. This is fixable."