When she could stand it no longer, she whipped out her government-issue credit card and told the plastic surgeon to “Charge it!” That was the moment when you paid for Staff Sgt. Sherry Pierre’s fabulously gratifying and uplifting breast enhancement.
The buxom non-com also took her Pentagon charge card on a joyful spending spree. She bought herself a shiny new SUV. She bought a motorcycle. She stocked her home with expensive furniture, sundry household items, and then she made a down payment on yet another vehicle. She charged it all to you.
This greedy gyrene was finally snagged by an experimental Pentagon computerized data-mining technique that red-flagged her purchase of bogus breasts as something totally incompatible with her assigned responsibility to purchase supplies for her unit. By a final account, she had stolen $129,709 of our hard-won earnings.
Pentagon charge-card purchases run as high as $7 billion a year, according to Defense Week. How much of this is squandered by spendthrift government employees is anyone’s guess.
Sherry Pierre’s military lawyer, Capt. Angela Wissman, tells us that her client regrets her big ripoff. Captain Wissman said, “She’s very sorry, and that’s one of the reasons she pleaded guilty.” Bullshit! She’s sorry she got caught. She’s appealing her conviction. A military court sentenced her to fourteen months in the brig at Miramar, California, fined her thirty-thousand bucks and bumped her rank down to lance corporal.
The Birth of a Bad Idea
The bright idea of handing out credit cards to government employees as a way to streamline government purchasing began in 1989. The underlying argument was that direct dealings with vendors would reduce administrative costs and cut bureaucratic red tape. It was a beautiful abstraction. In the 2001 fiscal year, government employees charged $13.7 billion worth of stuff on government-issued credit cards, according to the General Services Administration. In a single year, Pentagon employees purchased $9 billion worth of stuff on 1.8 million government-issued credit cards. Most of the purchases were business related, but the spending spree also included personal shopping trips to Wal-Mart and the Home Depot and parties at Hooters and Bottoms Up. Five hundred fraudulent military credit-card scams forced one bank to write off $59 million in bad debt. According to Iowa Republican Senator Charles Grassley, the easy availability of government credit cards “is like giving people keys to the federal treasury.”
“In the past, Pentagon employees needed a phony invoice to trigger a fraudulent government check, but that obstacle is gone,” observed Sen. Grassley. “Credit cards provide a shortcut to the cash pile.” Grassley says that purchase credit cards, many with limits of $20,000 to $100,000, are being handed out without any credit checks on the employees receiving them. “There are no controls, no responsibilities, and no accountability,” he observed.
One Marine sergeant had his credit card restricted because of his poor credit history. His superiors then quadrupled his credit limit from $2,500 to $10,000. The bank issued a fraud warning in August of 2000 because of suspicious purchases. The Marines responded by raising his credit limit two more times until it reached $25,000. The sergeant made two cash withdrawals on his card totaling $8,500. When his credit was finally revoked, the sergeant left the Marines and the bank was forced to swallow his $20,000 debt.
Under its contract with the government for travel cards, the Bank of America must write off fraudulent purchases if it can’t recover the money from the individual violators, not the government. This one bank has already written off $59 million in fraudulent debts from activity on 43,000 military travel credit cards. According to the Bank of America, one soldier squandered $3,100 on six trips to Hooters and Bottoms Up. One Army reservist’s wife went on a $13,000 shopping blowout in Puerto Rico. The widow of a deceased Navy man charged $3,565 to the taxpayers. An Air Force National Guardsman’s wife blew thousands of dollars satisfying her passion for Internet gambling.
A General Accounting Office review of Navy personnel purchase cards in San Diego turned up five fraud cases involving $660,000 in personal purchases. Department of Defense Comptroller Dov S. Zakheim says that Defense Secretary Donald Rumsfeld “is moving forcefully” to correct problems in the travel and purchase credit card system. He’d better move fast. The Department of Defense has already issued about 1.4 million travel credit cards to individual employees as well as 207,000 purchase cards. In 2001 these people charged over $9.5 billion to the taxpayer’s account. Not all of it was wisely spent.
One Florida man ran up a whole lot of fraudulent charges on his thirteen government credit cards. He was sentenced to eighteen months in the slammer and ordered to pay $262,840 in restitution.
A Virginia gent has been ordered to pay $400,000 in restitution after pleading guilty to bribing government employees to buy from his company with their government credit cards. He also got 27 months in stir and 36 months probation.
Comptroller Zakheim remarked, “The kind of money that can be lost this way is money that can be spent on bombs, bullets, readiness – whatever. It’s not that the people do not want to be responsible. It’s sometimes that they need to be trained how to be responsible.” Please tell me he’s kidding. Did he really say that government employees “need to be trained” not to use government credit cards to purchase personal sport utility vehicles, breast enhancement surgeries, and beer bashes at Hooters? Senator Grassley got it right: “These credit cards are being taken on a shopping spree and the card holders seem to be immune from punishment.”
It has been recommended that credit card abuse be made a specific offense under the Uniform Code of Military Justice. So far, things have been running badly under the honor system. Nonetheless, Vice Admiral Keith Lippert, who headed the agency responsible for the Navy and Marine credit card program, said with a straight face that “The greatest strength of the system is employee honesty. The work force is relied upon to properly use the card and to report misuse.” In other words, we are in big trouble.
In the final days of 2002, Senator Grassley and Representative Steve Horn (R-CA) released two General Accounting Office reports about the government’s travel and purchase card programs in the U.S. Air Force. Horn said, “Since we began this project over a year ago, I have been both amazed and appalled at the arrogant and egregious abuse of these programs that were designed to save taxpayer dollars. Instead of saving money, we have found government employees who are treating these cards as personal credit cards, collectively costing the government millions of dollars.” Actually, it doesn’t cost the government a nickel; the government has no money of its own; the government has never earned a penny; all of the stolen money came out of our paychecks. The government will recover any shortfall in its spending plans by increasing our tax burden. Senator Grassley observed, “New reports, same story. Like the Navy and the Army, Air Force cards have few controls, extensive abuse and little accountability. Clearly, the Defense Department has to stop handing out credit cards like so many Christmas cookies.” But then, it wouldn’t feel like Christmas at the Pentagon any more.
The GAO’s audit of the Air Force travel card program found its delinquency rate to be lower than those of the Navy and the Army, but still higher than that of other federal agencies. Most of the offenders were low and mid-level enlisted personnel. The report reveals that the Bank of America has written off 12 million dollars of Air Force bad debt. The GAO attributed the high rate of Air Force card abuse to lax oversight of the cardholders. In the eighteen months ending March 31, 2002, more than 6,300 Air Force personnel attempted to satisfy their indebtedness by writing bogus checks. More than 400 of these airmen appear to have committed bank fraud by writing three or more bum checks to the Bank of America. Meanwhile, Air Force employees pissed away your earnings on pleasure cruises, Internet and casino gambling, tickets to see the Dallas Cowboys, the Backstreet Boys and N’SYNC. There were also 187 credit card transactions at clubs such as the Cheetah Lounge in Las Vegas and taxpayer subsidized romps at houses of prostitution.
Disciplinary action against card abusers is a joke. The GAO report says that of the 58 most outlandish credit card abusers, only 19 were disciplined in any way. Thirty-two of these crooks had active secret or top secret security clearances; many of them had other financial problems including maxed-out personal credit cards, bankruptcies and home mortgage foreclosures. The GAO found these people to be security risks. One C-15 mechanic with a severe gambling compulsion was able to maintain his secret clearance despite years of credit card abuse. He was not called to account until he was caught stealing body armor and chemical-agent protective masks needed in Afghanistan.
The Air Force now gives credit cards to anyone, regardless of their credit histories. The Byrd-Grassley Amendment to the fiscal year 2003 Department of Defense Appropriations Act requires the DOD to deny credit cards to anyone with prior severe credit problems. It’s a well-meant gesture, but can it alter an established bureaucratic culture in which there is one credit card for every seventh employee and some cardholders are packing as many as ten purchase cards?
GAO auditors revealed that Air Force purchase cards had been used to buy $540 Oakley sunglasses that were described as “paratrooper goggles,” a lunch for 18 people with an eight-hundred-dollar liquor bill, civilian clothing, unneeded computers, designer leather goods, including laptop computer cases that cost $595 each, and three hundred dollars for taxidermy services to mount a “road kill” mule deer which was described as something for educational purposes.
Federal employees are now carrying more than 3.1 million government-issued credit cards and using them to spend $19 billion of taxpayer earnings each year. Their purchases include pornographic materials bought over the Internet by education department employees. DOE employees also used their government cards to buy personal computers for themselves. Employees of the Corporation for National and Community Service charged their family vacations to you. One spendthrift spent $22,442 on family fun. One woman at the U.S. attorney’s office in Los Angles racked up half a million dollars in personal expenses in three years.
At the Pentagon 40,000 employees defaulted on $53 million in travel charges. Employees with travel cards charge their expenses for official trips; they are later reimbursed by their agencies and must then pay the bill themselves. This way the government is not held liable when workers fail to pay their overdue debts. When the debt isn’t paid, the bank charges the taxpayers (you and me) interest and late fees.
Two federal agencies, the Federal Emergency Management Agency and the Securities and Exchange Commission, each have more than twice as many credit cards as they do employees. Even
Speaking of the Department of Agriculture, employees there used their government cards to buy themselves Ozzy Osbourne tickets, lingerie and tattoos. Someone made a down payment on a car. A random audit of 300 card holders led the department’s inspector general to conclude that 15% of the department’s 55,000 employees made a total of 8,250 fraudulent purchases ($5.8 million) during the audit period from October 1, 2001 to March 31, 2002. Employees made 900 personal purchases at Wal-Mart, Kmart and Target using government cards. An audit of the 25 USDA employees who withdrew the most cash from ATM machines revealed that twelve of them “never traveled for official government purposes, their card usage amounted to almost $196,000.” As of December 2002, 1,549 former USDA employees were still in possession of active government credit cards.
Auditors discovered that the Department of Agriculture had no policy for disciplining credit card abusers; attempts at discipline were inconsistent. In most cases, card cheats were sent a letter of reprimand or the crooks themselves were given “counseling.” That’s a sweet deal for the card cheats.
A department spokeswoman, Julie Quick, said that she was unaware of any employees who had been fired because of their credit card ripoffs. Ms. Quick remarked, “The important point for us is that we’ve established an across-the-board zero tolerance for misuse of the cards.” Rubbish! If the criminals are not fired, and if “zero tolerance” means nothing more threatening than a letter of reprimand, then these thieving parasites are being encouraged to steal more of our tax dollars.
Clyde Thompson, the department’s associate assistant secretary for administration, assumed a stern tone and announced that, “We also will remind employees that travel card misuse is a serious offense.” It’s comforting to hear that these criminals will be “reminded” that their crimes are crimes. He would not specify any other penalties that crooked employees might face. Forcing these jerks to forfeit their government jobs seems to be out of the question. Senator Grassley stated the obvious when he said, “It’s obviously unacceptable for federal employees to use government travel cards to go to bartending college, and it’s wrong for employees who don’t travel for their government work to use government travel cards.” He didn’t mention the criminals who took their government cards to The Gap, to Cigarettes for Less, and the Oregon Liquor Store.
The Department of Agriculture oversees the Forest Service where the same careless fiscal oversight nurtures a culture of contempt for the American taxpayer. Forest Service workers enriched themselves from your earnings by purchasing for themselves such goodies as a billiard table, a $2,900 aquarium and a frolicsome evening at a bingo casino. These bums racked up $1.6 million in personal purchases between October 1, 2000 and September 30, 2001. From this, auditors have extrapolated that the true amount of improper purchases is about $2.7 million. Of the Forest Service’s 40,000 workers, 14,000 are packing government-issued credit cards.
In a gross understatement, the auditors observed that, “The Forest Service lacks certain basic controls over its purchase card program, and thus it is susceptible to waste, fraud and misuse.” Only accountants and lawyers produce such lobotomized prose. By “lacks certain basic internal controls” they mean that the Forest Service has become a Candyland culture without moral restraints; the employees are robbing the American population with abandon. There were, for example, the 644 purchases that included $34,950 in hotel cancellation fees and the transactions at Mike’s Scuba, Inc. and Have Party Will Travel.
Auditors discovered that the Forest Service kept no inventory of $439,789 in purchases which included all-terrain vehicles, motorcycles, snowmobiles, night vision goggles, video cameras and much more. In their usual monotone, the auditors observed that, “Without proper recording and accounting for these vulnerable assets, there is an increased risk of misappropriation of these items.” In other words, the Forest Service doesn’t know what it owns, so employees are free to help themselves to snowmobiles and motorcycles. By “vulnerable assets” the auditors mean that anyone can simply take them home.
Not to be outdone, the busy employees at the Department of the Interior used their government credit cards to pay their rent, to buy furniture and jewelry and to gamble at those ever-popular casinos. Almost three-quarters of the Interior Department’s 79,000 employees have been issued credit cards. Another 1,116 former department employees are still carrying department cards.
Auditors remarked that “The department and its bureaus do not have sufficient controls in place to minimize abuse of the charge card.” This was disclosed after the Clinton administration had given the Interior Department a “Hammer Award” for good management of its credit card system. The award was part of Al Gore’s “reinventing government” campaign. In the fiscal years 1999 and 2000, Interior Department employees made more than two million purchases. These transactions totaled $675 million.
There are now 3.1 million government credit cards in use. At least fifteen government agencies have more credit cards than employees. The enormous number of cards and the lax oversight of the credit card system mean that the continuous theft of the American taxpayer’s earnings by card holders is now a permanent fixture of the American governmental bureaucracy. The total number of credit cards in circulation is enough to supply three of every four government employees. To quote Gregory Kutz, a congressional auditor for the General Accounting Office: “It’s almost impossible to do real tight controls unless you’ve got a whole army of reviewers.” This phantom army does not, and never will, exist.
Our Dilemma
None of this criminal behavior would raise an eyebrow among the lower fifty percent of taxpayers who, collectively, contribute less than five percent of America’s income tax burden. These small-time contributors, who constitute the spine and sinew of the Democratic Party, have been enriched since childhood, in countless ways, by the efforts of others;
they consider this on-going enrichment to be an entitlement. But to the tax slaves of the American middle class, who are compelled once a year to relinquish more of their earnings to a cash-hungry government bureaucracy than they spend on food, shelter and clothing combined, the government credit card program is the final insult. While the true contributors toil from January until May just to meet their annual tax bill, government bureaucracies are dispensing credit cards to countless credit-unworthy crooks who lavish our hard-won earnings on themselves. As Senator Grassley observed, an arrogant government is handing out taxpayer-funded credit cards “like Christmas cookies,” which makes every day Christmas Day for thousands of conscienceless criminals on the government payroll.
The simple truth is this: taxation is something worse than theft; it is a form of human sacrifice. Years of your life, years that can never be relived, were spent earning dollars that were taken from you by an intimidating government. Those dollars were the distilled essence of your limited time on this earth. Government can only justify snatching away these precious pieces of your life by demonstrating to you that your stolen wealth was put to some good purpose. Every misspent nickel serves only to de-legitimize the governmental enterprise. We are not on this earth to enrich any government or any band of pampered bureaucrats.
The reality of our present existence is that government hirelings seize our earnings at gunpoint and then insult us by giving complete jerks free rein to squander our hard-won earnings on themselves. America’s tax system is bloated, wasteful and immoral; at the center of this system lies the rotten core of every slave system: It is morally wrong to deprive any person of the fruits of his labor. All the high-tone justifications for this larceny will ring hollow so long as people on the government payroll feel free to spend our paychecks on whores, liquor, expensive cars and cosmetic surgery. The present tax system is an immoral imposition; the government credit card program is a grievous insult to us all. We deserve better. No dignified people would long endure such a system.
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Thomas Clough
Copyright 2003
October 25, 2003