July 17th, 2002
By DAVID PACE
Associated Press
WASHINGTON (AP) - Some 200 Army personnel used government charge cards
to get $38,000 in cash that they spent on "lap dancing and other forms
of entertainment" at strip clubs near military bases, Sen. Charles Grassley
said Wednesday, citing findings of a congressional investigation.
Grassley, R-Iowa, said the soldiers used their military identification
and government travel card to obtain cash from adult entertainment bars
and then spent the money there.
The General Accounting Office, which conducted the investigation, said
the clubs charged a 10 percent fee to supply the soldiers with cash, billing
their travel cards for the full amount as a restaurant charge.
An Army spokesman said he did not know what, if any, disciplinary action
had been taken against the 200 individuals.
But the GAO said it found "little evidence of documented disciplinary
action against Army personnel who misused the card, or that Army travel
program managers or supervisors were even aware that Army personnel were
using their travel cards for personal use."
The GAO report is the latest volley in a two-year congressional probe
of the Pentagon's credit card program. The program is huge. Last year,
the 1.4 million defense employees used government travel cards for $2.1
billion in travel purchases; another 230,000 Defense Department workers
used purchase cards for $6.1 billion in goods and services.
Defense Secretary Donald H. Rumsfeld created a special task force earlier
this year to look into credit card abuses, and it made 25 recommendations
last month to tighten controls over cards and to increase prosecutions
of those who abuse or misuse them.
In its Army investigation, the GAO also found that government cards
had been used for personal purchases of more than $100,000 for computers
and other electronic equipment, $45,000 for cruises, and $7,373 for closing
costs on a home.
Investigators also questioned purchases on government cards of fine
china, cigars, wine, a trip to Las Vegas, Internet and casino gambling,
and two pictures of Elvis Presley purchased at his Graceland mansion in
Memphis.
Rep. Jan Schakowsky, D-Ill., one of the House government reform leaders
who requested the GAO investigation, said the findings point to an overall
management failure at the Pentagon.
"Financial management at the Department of Defense is as bad or worse
as at Enron, WorldCom or any other corporation that has misled the public,"
she said.
James T. Inman, the Army's acting deputy assistant secretary, said
the service is "aggressively correcting" the problems uncovered by the
GAO investigation.
In one instance, the GAO found government charge cards were used for
a $30,000 purchase of 80 Palm Pilots at the Pentagon's top procurement
office. An Internal e-mail said there was a need "to get enough goodies
for everyone."
Grassley said the e-mail sends a message that "we can splurge at the
taxpayers' expense and not worry about it. It's unfortunate that such an
attitude is being nurtured in the purchase card 'czar's' front office.
It sends the wrong message to the troops in the field."
The new GAO report is the first to focus on the Army, which has more
than 430,000 travel cardholders and more than 100,000 purchase cards in
use. The Army's charge bill last year totaled more than $3 billion.
Investigators audited purchase card transactions in five major Army
commands, including detailed work at one base in each command. They also
visited four Army bases to investigate the travel card program.
The GAO said the Army has worked to maximize the use of purchase cards
to save money by reducing procurement costs, but "has not focused equal
attention on internal control."
Auditors said they found that 40 percent to 86 percent of the monthly
purchase charge bills at the five bases had not been reviewed by managers
to ensure charges were properly documented.
The GAO also found 1,200 Defense Department personnel had written bad
checks to pay their government travel card bills. In examining the worst
105 cases, the GAO found 40 of those cardholders hold secret, top secret
or higher security classifications. Bank of America, which runs the Army
charge card program, had to write off nearly $150,000 in bad debts on those
40 accounts.
|