Pentagon Credit Card Abuse Will Be Targeted

A Pentagon task force created in response to reports of government credit card abuse by defense workers and military personnel has been given 60 days to develop a reform plan, officials said Wednesday.

The task force will recommend legislative and administrative changes to tighten controls over the Pentagon’s 1.6 million credit cards and to increase accountability for cardholders and the supervisors who approve their charges.

Changes under consideration include making credit card abuse a specific violation under the Uniform Code of Military Justice, suspending security clearances for abusers, mandatory salary deductions to repay unauthorized charges, and increased prosecutions.

“We are not going to let the grass grow under our feet on this one,” said Dov S. Zakheim, the Pentagon’s comptroller and chief financial officer.

Defense Secretary Donald H. Rumsfeld asked Zakheim last week to investigate reports from congressional auditors that the military services have done little to correct credit card abuses first uncovered last summer.

Congressional investigators found that more than 46,000 Defense Department employees had defaulted on $62 million in official travel expenses charged against government cards as of November. The bad debts, most of which have been written off by banks that issue the cards, have been increasing at the rate of $1 million a month.

Most of the Defense Department’s 1.4 million travel cards are billed directly to employees, who are supposed to use them only for official government travel and pay the bills when they are reimbursed by the government.

Defense workers charged $3.4 billion on those travel cards last year. Zakheim said 11.7% of the current amount owed on travel cards billed directly to employees is more than 60 days overdue.

The Defense Department also has about 207,000 purchase cards, which were used last year to buy $6.1 billion in goods and services. Those cards are billed directly to the government, and Zakheim said the delinquency rate is 7.5%.

While lawmakers have criticized the Pentagon for not taking credit card abuse seriously, Zakheim said the agency has deactivated or canceled more than 200,000 Pentagon credit cards in the last year and currently is pursuing 17 criminal investigations involving 90 people.

In one recently completed investigation, two defense supply service workers and two other people were ordered to pay nearly $1 million in restitution and fees for misusing purchase cards. Three of the four also received prison terms.

Zakheim could not provide an estimate of how much taxpayers have lost because of purchase card abuse, but he said it’s been more than offset by the savings the cards have produced by streamlining the purchasing process throughout the Defense Department.

“The issue is not to eliminate the cards,” he said. “That is going backward. That is detrimental to government and Defense Department efficiency. What we’ve got to do is prevent misuse.”