September 30, 2005

Senators Dorgan and Wyden Introduce Bill to Safeguard Against Abuse of Government Credit Cards, Prevent Fraud During Hurricane Clean-Up

Senators point to previous lavish expenditures on taxpayers' dime:

WASHINGTON, D.C --- U.S. Senators Byron Dorgan (D-ND) and Ron Wyden (D-OR) today introduced legislation that would reverse language included in the emergency Hurricane Katrina spending bill that they say paves the way for potential abuse of certain government credit cards, which have been grossly mismanaged in the past. Government procurement rules allow small purchases to be made with a government credit card, bypassing some bidding procedures that govern larger purchases. The rules are intended to streamline the process for government workers who need to buy office equipment and other routine items. Originally, the purchase limit was $2,500 on a single shopping trip for non-emergency purchases. After September 11, 2001, the threshold for emergency purchases was increased to $15,000 domestically and $25,000 abroad. The second supplemental appropriations bill for Hurricane Katrina included a provision that raised the limit $250,000 for any purchase related to the hurricane, and cumulative limits could be much higher. Dorgan and Wyden said there have been numerous troubling examples of federal government employees abusing these cards prior to Hurricane Katrina. Three inspector general reports have found stunning examples of their misuse, such as the Navy personnel who, in 2002, used their government credit cards to hire prostitutes, gamble, and attend professional sporting events. One worker ran up $35,000 in personal expenses over two years, including breast enlargement surgery for his girlfriend. More than 1,000 federal employees retained an active credit card after they left their jobs. The Government Accountability Office has found in the past that hundreds of millions of dollars have been squandered through improper use of government credit cards. The Senators said that with more than 300,000 purchase cards in the possession of federal employees circulating throughout the country, and the massive spending effort surrounding Hurricane Katrina underway, it is vital to require accountability now. Their bill would strike the new limits imposed in the Hurricane Katrina bill and return them to the previous limits. "Given our experience with government credit cards in the past, raising the limit for these purchases will only open us up to rampant waste, fraud and abuse," Dorgan said. "The White House's approach to hurricane recovery has been to spend lavishly and worry about the tab later. That's the wrong message to send, and Congress needs to act to make sure the rebuilding carries forward in a way that will help hurricane victims while keeping an eye on the taxpayer's dollars." "It's not appropriate to set government credit card spending limits in the stratosphere when there are already avenues to streamline purchasing and maintain accountability for taxpayer dollars," said Wyden. "Our legislation still affords the cards more spending clout in the hurricane zone - just not to the tune of a quarter million dollars."