White House Backs Down on $250K Government Purchase Card Limit
Today the White House announced that it is returning the government purchase card limit from $250,000 (or $15,000 for contingency operations) to $2,500, stating "the higher purchase limits are no longer needed and will be used only in 'exceptional circumstances' to guard against fraud and abuse." Click here to view the memo.
Contracting watchdogs who raised concerns included the Project On Government Oversight, House Government Reform Ranking Minority Member Henry Waxman (D-CA), Senate Homeland Security and Governmental Affairs Chairman Susan Collins, and Senators Charles Grassley and Joseph Lieberman.
"Today's announcement means more government spending will reach the survivors of Hurricane Katrina rather than being wasted. Lifting the government purchase card limit to $250,000 was ludicrous given that the cards were already the target of numerous fraud investigations by the FBI, Inspectors General, and the Government Accountability Office," said Danielle Brian, Executive Director, Project On Government Oversight.
Below follows links and information on the "Greatest Hits" of purchase card fraud that POGO recently pulled together from years past:
PURCHASE CARDS GREATEST HITS
LAP DANCES/ELVIS PHOTOS FROM GRACELAND
200 Army personnel bought lap dances using government purchase cards per testimony from Senator Charles Grassley. Click here to view testimony.
Also notable uses included to:
“make mortgage payments and closing costs; to buy cars; an engagement ring; racetrack betting; Elvis photos from Graceland; a framed John Elway jersey; a trip to the Rose Bowl game, and even Caribbean Cruises”
VICTORIA ’S SECRET/SIX FLAGS
According to testimony from POGO’s Executive Director Danielle Brian. Click here to view testimony. “In January 2000, two enterprising reporters at the Fayetteville Observer sent Freedom of Information Act requests for the receipts of more than 330,000 government credit card purchases by Fort Bragg card holders. Among many others, they found charges of $981 for Atlanta Braves baseball tickets, $235 for Six Flags Magic Mountain tickets, and my personal favorite, $111 at Victoria 's Secret.”
DOG/REMOTE CONTROL HELICOPTERS
According to Government Accountability Office report “Purchase Cards: Navy Vulnerable to Fraud and Abuse but Is Taking Action to Resolve Control Weaknesses” (GAO-03-154T). Click here for GAO report.
"EZ Pass prepaid toll tags, expensive remote control helicopters, and a dog"
Testimony of Senator Charles Grassley to the House Subcommittee on Government Efficiency, March 13, 2002:
Here's another. A Department of Defense employee by the name of Somchart "Nick" Fungcharoen -- he used his travel card exclusively for personal expenses.
Over a period of two years, he charged nearly $35,000, including medical expenses: $4,016. On the surface it appears as if he spent most of the money romancing a waitress he met at the Hooters Bar and Grill in Jacksonville , Florida . Her name was Jennifer Gilpin (ph)….
This gentleman used his travel card exclusively for personal expenses. Over a period of two years he charged nearly $35,000, including medical expenses: $4,016.
On the surface it appears that he had used this to romance a waitress. After they got to know each other, she asked him for money to have a breast enlargement operation.
He agreed and took her to a surgeon, Dr. John J. Obi, M.D. Dr. Obi performed the operation and Fungcharoen used his Department of Defense credit card to pay the bill.
When the relationship soured, the case ended up in small claims court. And the military man had retired on disability and wanted his money back. The judge became alarmed that Fungcharoen testified proudly that he had used his government issue credit card to pay the doctor.
Fungcharoen whipped out the card in the courtroom and showed it to the judge. The judge examined the card and read on the inscription, "For official government travel only."
The judge stated in total disbelief, quote, "You paid for this breast enlargement with a government credit card." After the revelation, the judge said, "Let's not go there."
This case is unique. It is unique because the cardholder paid his bill, though not always on time.
I have two problems with the case. First, Fungcharoen, used his card exclusively for personal business. Had he used a standard commercial card, he would have incurred stiff interest charges and penalty.
He used the Department of Defense plastic to avoid costs that the rest of us have to pay. He got a free loan from the bank without asking. That is just one small step away from other worse forms of abuse.
Second, the case underscores the total lack of oversight by the EAGLS crew. They were asleep at the switch. And a quick EAGLS check would have shown that he was making extensive unauthorized purchases around his home in Florida .
And why did they have a card after retirement is obviously an important question. Like Miss Mayes (ph), I guess he figured out that he needed it again.
So, Mr. Chairman, accountability is the key. With no accountability, we can look forward to more egregious credit card abuse, relentless abuse. It will go on and on and on with impunity.”
Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.