Taxpayers Billed for USO Perks to Stars

When Jennifer Lopez, Kid Rock and Ja Rule put on a concert for 1,500 troops at the height of the war in Afghanistan, it was seen as another success for the United Services Organization, which for 63 years has been entertaining members of the armed forces overseas.

But now the spotlight is on a team of government auditors who uncovered hundreds of thousands of dollars in unexplained expenses the USO submitted for the show.

The Lopez show was among several cited in a General Accounting Office report released this month that found more than $430,000 in improper, questionable or unsupported USO tour expenses charged to the Pentagon over a two-year period.

The GAO study, which looked at 10 randomly selected tours during 2000 and 2001, found no evidence of malfeasance in the nonprofit organization’s use of government money. Nor was there any finding that the entertainers did anything wrong.

But the investigation, requested by Rep. C.W. “Bill” Young (R-Fla.), found that taxpayers repeatedly paid for first-class plane tickets, liquor and limousine services for celebrities, in violation of Pentagon and federal regulations.

Any such luxury expenses are supposed to be paid out of the USO’s private donations, not the money it gets from Congress. The GAO report blamed sloppy bookkeeping by ill-trained employees.

The investigation, however, prompted the Pentagon’s Armed Forces Entertainment division, which disburses federal funds to the USO, to review all tours since 1998; so far, it has uncovered an additional $73,000 in improper payments and recovered more than $140,000 from the USO.

Col. Janice Long, chief of Armed Forces Entertainment, acknowledged in an interview that the review was not comprehensive. She said the division needed additional information to know how many more airplane ticket upgrades were paid for in violation of federal travel regulations. The USO stages an average of 40 entertainment tours for U.S. troops each year.

“We identified what we could in just reviewing the files that we have,” Long said. “Additional research could perhaps uncover other problems.”

USO spokesman John Hanson said, “We saw this as a real wake-up call. We don’t have any indication that there’s any inappropriate behavior. I mean, nobody set out to do anything other than make sure that these tours happened.... That’s why we are taking measures to ensure that what we do from here forward is absolutely correct.”

The findings have embarrassed a venerable organization that has sent entertainers such as Bob Hope, Marilyn Monroe and Arnold Schwarzenegger into sometimes treacherous terrain to bring smiles to war-weary faces.

Formed by philanthropic and service groups after a request by President Franklin D. Roosevelt, the USO made an immense difference in the lives of GIs serving in World War II.

USO clubs at home and abroad gave GIs places to dance, talk, write letters and see movies. From 1941 to 1947, the USO presented more than 400,000 performances.

In Vietnam a generation later, USO centers opened in combat zones. And during the Persian Gulf War, USO mobile canteens delivered books, refreshments, magazines and compact disc players to troops on the front lines.

The USO has a staff of 30 at its Washington headquarters and an additional 200 in its centers overseas. It has undergone something of a renaissance since the outbreak of war in Afghanistan and Iraq. USO officials said the post-Sept. 11 military missions have attracted volunteers with greater star power.

The cost of the celebrity tours has always been paid by a combination of taxpayer dollars and private donations. In addition to expenses, the entertainers are paid $50 a day, about the same as an Army private first class.

“Most of them give it right back,” Hanson said. “So we figure the least we can do is fly them first class.”

The GAO found that in the case of the Lopez concert, the Pentagon paid MTV -- which aired the performance -- for $343,910 in production expenses despite no supporting documentation. While the USO has since recovered and resubmitted many receipts, Hanson said, it is unclear where all the money was spent.

Among the celebrities who got first-class tickets at taxpayers’ expense were comedian Drew Carey and teen idol Jessica Simpson, who entertained troops in Italy at Christmas in 2001; Wayne Newton and Bo Derek, who flew to Afghanistan, Qatar and Oman and to aircraft carriers in the region during the same period; and rocker Joan Jett, who performed for troops in Afghanistan, Pakistan and Guantanamo Bay, Cuba.

The payments included $67,000 for unauthorized first-class and business-class travel expenses and about $9,000 for transportation costs for unauthorized travelers. Armed Forces Entertainment also improperly reimbursed the USO for about $9,000 in administrative services that already had been paid, and about $1,300 for food, liquor and other items not allowed under federal travel regulations.

In the last three months, both Armed Forces Entertainment and the USO have attempted to control spending. Two people, described as “in over their heads,” have been fired from Armed Forces Entertainment and the USO and replaced by nine accountants. Officials also put in writing, for the first time, policies and guidelines on allowable government expenditures.

Young, chairman of the House Appropriations Committee, said he sought the GAO review to ensure that $23.8 million in federal grants awarded to the USO as seed money for its endowment fund had been properly spent. Congress appropriated an additional $34.7 million for the USO from 2000 to 2002.

Young said through a spokesman he was satisfied with the report and had been assured the problems would be corrected.