Pentagon to Review Gov't Credit Cards for Katrina Expenses

Pentagon auditors said Tuesday they will investigate whether federal employees have been abusing government-issued credit cards since their purchase limits were hastily raised to $250,000 to help pay for hurricane-related expenses.

Gary Comerford (search), spokesman for the Pentagon's inspector general, said the audit comes after Congress — at the request of the Bush administration — increased the purchase limit as part of a massive Katrina recovery bill approved earlier this month.

Previous government audits have shown that the credit cards, which typically have a purchase limit of $2,500, were improperly used to pay for prostitutes, gambling activity and even breast implants. About 250,000 federal employees currently have the government credit cards.

The review comes as part of the department's broader study of Katrina-related spending. Other audits will focus on the awarding of multimillion-dollar Katrina contracts, such as one involving a subsidiary of Halliburton (search), the company formerly headed by Vice President Dick Cheney.

"We initiated these audits because a large amount of Department of Defense resources are going to be devoted to aiding this relief effort," said Comerford, adding that teams of auditors will be based both in Washington and the Gulf Coast.

The Bush administration requested the increase of the credit card limit to speed aid to victims. Since then, it has issued guidelines putting some restrictions on the spending, but critics have said they weren't enough to deter abuse.

The Pentagon review is one of several measures that will be detailed by acting Pentagon Inspector General Thomas F. Gimble (search) and other government auditors at a House hearing Wednesday. Currently, there are several bills pending that would create additional layers of oversight beyond the agency inspectors general.