Pentagon Cracks Down on Abuse of Gov't Credit Cards

Published June 27, 2002

| FoxNews.com

Pentagon employees will no longer be able to spend like they're using daddy's credit card when they charge on government-issued plastic.

A Pentagon task force has suggested that soldiers and staff who illegally use cards for personal purposes be prosecuted and forced to pay the cash back.

"The recommendations being announced today will greatly reduce the likelihood of any misuse," Dov S. Zakheim, the Pentagon's comptroller and chief financial officer, said Thursday. "But the department's work is not over."

Last November, the Defense Department got a $62 million bill for unpaid travel expenses charged on government cards. The bad debts were written off by most banks, but the $1 million-a-month run-up of credit launched a congressional investigation and a review ordered by Defense Secretary Donald H. Rumsfeld.

The 60-day task force inquiry found that little had been done by the military to correct the abuses of 46,000 employees who had defaulted on payments. 

The task force recommended that legislation from Congress say that if any of the 1.4 million staff with travel cards and 207,000 employees with purchase cards fail to pay their bill, they must be prosecuted and forced to pay back the money.

It also suggested that fewer number of cards be given out; that oversight directors be given responsibility over fewer number of employees with cards and that new technology be developed to detect suspicious transactions.

"This is not a simple matter," Zakheim told a Pentagon press conference. "We hope it is one that with remedies will go away."

Purchase cards, used for buying office materials and other useful items, have saved the Defense Department an estimated $20 per transaction by not requiring processing. Savings over the past eight years exceed $900 million, according to a press statement released Thursday.

"You don't want to throw the baby away with the bath water," Zakheim said.

Still, with purchase cards paying for more than $6.1 billion in goods and services last year, a 7.5 percent delinquency rate creates major problems internally, with banks and vendors.

Defense workers charged $3.4 billion on travel cards last year, according to defense officials. The task force found that 11.7 percent of that amount had not been paid back within 60 days.

The Associated Press contributed to this report.

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