Paying with plastic has become the American way for consumers across the country. Credit cards offer consumers convenience, access and security, especially when traveling. Most folks probably can’t imagine daily life without plastic in their pocketbook. At the same time, it takes discipline to use credit cards as a handy financial tool rather than as an open invitation to binge and splurge at your favorite department store. Conscientious consumers know how to set their limits and stick to them.
But to some free-loaders wielding a federal credit card, charging it to Uncle Sam has become a pain-free way to buy, buy, buy. A burgeoning credit card program designed to streamline official government purchases has grown to include 3.1 million credit cards intended for government business only. From travel to office supplies and fuel, government employees are expected to charge $19 billion to Uncle Sam this year alone. Unfortunately, recent audits have shown the government is slow to detect and deter abuse by employees using the credit cards for personal use.
Consider the Pentagon. After trying for years to redeem itself from flagrant financial missteps I exposed at the Department of Defense during the 1980s, the Pentagon once again is under fire for a fiscal house deemed widely out of order. This time, the spending blunders stem from arrant abuses in its employee credit card program.
In the last decade, 1.8 million Pentagon personnel were issued military credit cards to streamline official purchases, cut red tape and eliminate unnecessary paperwork. Another added incentive -- the government would get to reap the benefits of rebates and other perks that are earned for using the cards. Unfortunately, the system appears to be riddled with waste, fraud and abuse. Last year, Pentagon card holders racked up $9 billion in sales, with plenty of fraudulent charges mixed in with the official purchases. Among personal items purchased on the taxpayer’s dime: laptop computers, pet supplies, DVD players, pizzas and Palm Pilots.
It appears the Department of Defense has created an army of spenders. With a Pentagon credit card in hand, employees have almost unlimited authority to spend money on the taxpayer’s tab. There are no controls, no responsibilities, no accountability. One banking institution has had to write-off $59 million in bad debts made by military card holders.
Plainly, the government must do a better job when it issues open lines of credit to its employees. It’s a slap in the face to American taxpayers who work hard for their money and each month must account for the purchases they charge to their own personal credit cards.
While the use of credit cards arguably can save the government time and money, it would be sheer negligence to write-off the millions of dollars fraudulently charged to Uncle Sam by 'a few' government employees without cracking down on a system that has enough active credit cards to outfit three of every four federal employees with a government credit card. According to one news report, at least 15 agencies have more credit cards than employees.
It just doesn’t add up. The federal government plainly needs to get a grip on its credit cards. To get a better handle on the extent of the problem, I am expanding my investigation of the government’s credit card programs beyond the Pentagon to include all federal agencies.
As a watchdog for American taxpayers, I intend to see to it that Uncle Sam puts the federal workforce on a shorter leash when it comes to paying with plastic.