Thank you Madame Chairman, Senator Lieberman, members of the Committee, I want to thank you for holding this important hearing and for the opportunity to testify before you today.  I also want to thank Senator Grassley who has been such a strong leader on government accountability issues.  It has been a pleasure to work with him toward accomplishing our mutual goal of rooting out waste, fraud and abuse in the federal government.  

As you will hear today, the GAO’s latest investigation into the epidemic of waste, fraud and abuse at the Pentagon has uncovered more of the same.  Because of a culture at the Defense Department that seems to persistently tolerate abuse of public dollars and public trust, precious taxpayer funds continue to be wasted.  Meanwhile, the Congress is providing DOD with increased budgets at record levels.  With all of the new homeland security needs our nation is facing, we cannot afford to waste a single penny that might otherwise be making American safer. 

The GAO estimates potential losses valuing at least $100 million as a result of unused and unclaimed airline travel tickets by DOD employees.

After reviewing just a few years of data, GAO found that DOD employees wasted over $21 million by failing to use or to claim 58,000 (57, 946) airlines tickets. Some of those tickets were for first and business class travel and cost DOD and taxpayers as much as $9,800 a piece. 

81,000 tickets were partially unused by DOD employees.  The price of those tickets equaled $62 million.   

In addition to wasted taxpayer dollars, GAO uncovered fraud and abuse of the DOD travel system.  DOD employees were improperly reimbursed for air travel tickets they did not purchase.   Examples include employees receiving improper and unjustified reimbursements of as much as $1,000, $3,600, and $10,000 each.  In violation of the rules, some DOD employees even approved their own travel and reimbursement forms and billed the government for rental of luxury cars.  One employee had the nerve to sell tickets that DOD had paid for to third parties, making a personal profit. 

These are just a few examples of the mismanagement and abuse that is ongoing at the Pentagon.  And to my knowledge, none of the perpetrators have been disciplined and DOD has yet to put in place the system-wide changes necessary to prevent future abuse. 

The GAO also discovered a potentially major security flaw in DOD’s travel system.  Working undercover, GAO personnel were able to obtain tickets based on a fictitious travel order, fake identification, and an unnamed DOD office.  GAO’s undercover agents would have been able to travel on a major U.S. airline, for free, under fake identification.  This could have been any criminal, including a terrorist, utilizing fake identification.  This raises serious concerns for our air travel industry and our national security.  Not only can individuals travel under fake ID, but the DOD, which is supposed to protect us, may actually be unknowingly facilitating criminal activity that could endanger the American public. 

Enough is enough.   Whenever Congress shines the light on any aspect of the Department of Defense’s financial management, we uncover more waste, fraud and abuse that are costing taxpayers billions of dollars.   The abuses continue to exist and thrive and come on top of the fact that the Department of Defense already cannot account for $1.2 trillion in financial transactions.

At a time when our soldiers are patrolling the streets of Iraq in unarmored Humvees, when critical domestic programs are being cut and the when the Administration is asking for record Defense spending, hundreds of millions of dollars that could be used to protect our troops and our country are going  to waste.  We’ve known for some time that DOD’s financial management is atrocious.  These latest GAO reports show that it is not only irresponsible but dangerous for our country to have the Defense Department continue business as usual.  I share Senator Grassley’s concern over the inexcusable behavior of individual employees, and I think they should all be appropriately disciplined.  But we also need to change the culture at the Pentagon.  Our Pentagon leaders need to fix the problems that persist.  If they cannot or will not, President Bush should replace them.  

At a time when Americans are being asked to sacrifice so much, in terms of lives, resources, and our economy, the Administration has a particular duty to protect taxpayer dollars from any further waste, fraud and abuse and the security threats that we are facing as a result. 

I want to thank our GAO witnesses and all of those at the GAO who worked so hard on these reports.  They have done yet another great service to the Congress and to the American public.  I just hope those of us here in Washington will now exercise our oversight responsibilities and demand changes from the Pentagon. 

Again, Madame Chairman and members of the Committee, I thank you.