Pentagon: What Happens In Vegas... Is Apparently Charged To Defense Dept. Credit Cards

from the your-tax-dollars-on-red dept

Wed, May 13th 2015 9:30am — Tim Cushing

Once again, we find the public sector lagging behind the private sector in terms of efficiencies, technological aptitude, etc. In this particular case, the public sector is slipping down the "hiding your hooker/gambling purchases from your employer" curve:

A not-yet-released Defense Department investigation has found civilian and military employees used government charge cards to make more than $1 million in purchases at casinos and to pay for escorts, according to an internal report.

In the private sector, these purchases would normally be covered up by cash advances or by utilizing savvier services who bill customers under innocuous names. Over at the Pentagon, no one seems to care. Just put it on the DoD's tab! Who's going to take a close look at a few thousand credit card statements?

Well, the Inspector General apparently did. And discovered that this occurred 4,437 times in a one-year period. Of course, the Pentagon is trying to play this down by pointing out that this total represents only 0.5% of the charges accrued over the same period. Left unaddressed is the principle of the thing, wherein taxpayers are often displeased to find their funds have been spent on hookers and roulette spins. And, of course, this would be displeasure in addition to the preexisting disgruntlement about the normal, everyday spending that helps keep the country operating at a steady ~~clip~~ deficit.

The DoD official also offered this reassuring statement that safely hedges the almost-assertions while simultaneously undercutting most of the intended reassurance.

Some or all of the charges may have been paid by the individuals, rather than the government, according to the official.

This statement is a little better, although essentially meaningless without the context of the full IG report.

The Defense official said the individuals who used their cards inappropriately will be held accountable, noting action has been taken on 364 cases and an additional 79 cases are pending action.

But the most interesting statement offered in defense of Pentagon employees and their indiscretionary spending is this one:

One official speculated to Politico the individuals may have used their government -- instead of their personal -- cards to hide the illicit activities from their spouses.

I'm not sure if that makes me feel better or worse about these government employees. This is very much a human nature problem. And the government still hires from the human race because there are currently no better options. No matter how much we'd hope it would hold potential and current employees to a higher standard (perhaps higher than one we're willing to apply to ourselves), there's still going to be a certain amount of misconduct and malfeasance.

But even if occasional abuse is unavoidable and the possible motivating factors understandable, the behavior is still far from acceptable. Are we supposed to feel better that this scenario will more likely result in the repayment of charges by the employee who racked them up? Do we raise a half-hearted cheer to the possibility that DoD employees aren't trying to abuse taxpayer funds but rather hiding their gambling and escort purchases from their significant others?

I can see how facing the internal wrath of a Pentagon supervisor would be preferable to discussing this activity with a spouse… or their lawyer. But it's still a betrayal of trust -- on several levels -- even if it is only a very small percentage of the whole.

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Filed Under: casinos, defense department, dod, escorts, las vegas

30 Comments

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Anonymous Coward, 13 May 2015 @ 9:34am

Borrowing from Peter...
To hide from Jill... that's a new one. or wait....
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Berenerd (profile), 13 May 2015 @ 9:47am

So what the DoD is saying, its ok that I not pay $3000 in taxes because, in the end, look at the trillions the IRS gets from everyone else?
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Whoever, 13 May 2015 @ 9:58am

To be fair....
The expenses at casinos could have been for meals or accommodation.
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Anonymous Coward, 13 May 2015 @ 10:03am

We should be cheering, but...
We should be cheering the fact there's only 0.5% of fraud (in this particular branch, in this particular budget, that is).
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Anonymous Coward, 13 May 2015 @ 10:04am

I suspect this is being overblown....
Some years back when I was in the military, I was given a government credit card to use on official TDY assignments. The way the card worked was the same as any other credit card, and I received the bills directly and had to pay them myself. If the bill wasn't paid, then my commander received notice from the credit card company and I would be in a great deal of trouble. After a TDY, I would submit an expense report and would get reimbursed for any authorized expenses. The timing was such that I would generally get the money before the credit card was due and thus would be able to pay off the credit card in a timely fashion.

A bit point about only using the card for official business was made, and at least in my case, I only did use it for such. But given the way the card was managed, I could easily see someone using the card for personal business and simply not get reimbursed for those personal charges and having to go out of pocket in order to pay off the card. The card was NOT a simple "Use the card to make charges and the government automatically pays the debt" As I said, it was more along the line of a normal card where I get the bills and any non-payment simply resulting in my commander getting the notice as well as myself, and the commander would then take steps.
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Anonymous Coward, 13 May 2015 @ 10:06am

Re: To be fair....
And the blowjobs from the hookers were a matter of national security, too right? Someone's going to pay for leaking this. Just watch.
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Anonymous Coward, 13 May 2015 @ 10:10am

Re: I suspect this is being overblown....
OverBLOWN? Really, you choose THAT word? Then again maybe that is accurate because this is really over the fact that DOD was paying for it's employees to be blown in Vegas.
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Anonymous Coward, 13 May 2015 @ 10:10am

Re: I suspect this is being overblown....
It seems my company's corporate card works similarly - and the company gets a copy of the bill as well. If there are any expenses that don't have receipts and business purpose, it is expected that the employee pays those out of their own pocket - and if they don't, the company will basically take it out of pay if they must.

Still easy to abuse if the employee isn't trustworthy... which is why only certain employees are given this option.
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Anonymous Coward, 13 May 2015 @ 10:12am

Re: Re: To be fair....
Oh wait. That would be under the accomodations.
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Ninja (profile), 13 May 2015 @ 10:20am

Re: To be fair....
To be fair the tooth fairy could be too busy and that's why she never visited me :/
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James Burkhardt (profile), 13 May 2015 @ 10:23am

Re: To be fair....
Which probably wouldn't have been highlighted by the IG report. Moreover, the word used - purchases - suggests accommodations are not being included.
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MobiusTripper, 13 May 2015 @ 10:24am

Perhaps the DEA and DOD should work together
and thus pay the illicit charges with money that's already guilty, rather than leave a paper trail for those pesky auditors.
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Anonymous Coward, 13 May 2015 @ 10:26am

Re: Perhaps the DEA and DOD should work together
Don't give them any damned ideas.
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James Burkhardt (profile), 13 May 2015 @ 10:31am

Re: I suspect this is being overblown....
That process makes sense. But this comment: "The Defense official said the individuals who used their cards inappropriately will be held accountable, noting action has been taken on 364 cases and an additional 79 cases are pending action." Suggests that is not the process in use here, or if it is, the expense report controls were not what they should be.

But even if they are using that process, its likely the US Government is the Guarantor on these cards, meaning if the employee doesn't pay, the government does. Additionally, that does not address the idea that the US is paying interest on the personal purchases of its employees.

Finally, The second half of the article discusses a quesiton of whether we should be more concerned that we are paying for 1 million dollars in personal expenses, or that we helped hide 1 million dollars in personal expenses from the spouses of the employees in question. Because that suggests a willingness to lie endemic in the organization.
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Baron von Robber, 13 May 2015 @ 10:34am

It would have been better for Vegas if Wall Street brokers and executives came to visit.

1) They could gamble more with your checking/savings/investment money and you don't get to find out about it. It's a private org.

2) They are pros at gambling. Only they call it Wall Street.
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Former Fed, 13 May 2015 @ 10:35am

Backing up the DoD A.C.
All government employees who travel are required to use the credit card issued by the government's selected contractor. The credit card is in the employee's name and the employee is the one required to make the payments. After you submit your paperwork, you get reimbursed - usually, but not always, before the payment is due.

Per the FTR (Federal Travel Regulations), the card can only be used for authorized expenses. Typically, this is accommodation plus M&IE (meals and incidental expenses), and transportation.

Sometimes the cards get used for personal expenses. sometimes it's a weak human succumbing to temptation; sometimes just making a mistake.

I'm not defending people who deliberately misuse the cards - they need to be nailed hard.
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Anonymous Coward, 13 May 2015 @ 10:40am

Re: Backing up the DoD A.C.
"they need to be nailed hard"

Sounds like some of them were... in Vegas... which is part of the problem in the first place.

/rimshot
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Former Fed, 13 May 2015 @ 11:24am

Not all mis-spending is on hookers & casinos
My former PsychoBoss is a perfect example of misuse of travel and training funds.

His station was (and is) the mid-western data processing facility for a minor civilian agency. His position was (and is) IT security officer for the site, but the job boiled down to documenting efforts of the local facility to comply with mandatory IT security controls.

He used his training budget to send himself to San Diego (RSA) and Las Vegas every year. There were no "scandalous" expenses, but it was a complete waste of the agency's money.
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Anonymous Coward, 13 May 2015 @ 11:30am

Re: Re: I suspect this is being overblown....
I doubt this will be hidden from the spouse as well.

Honey I noticed we didn't receive your full paycheck this time, what happened?

...or even better...

What do you mean you were fired?!? What did you do to get fired?

Of course if the spouse doesn't ever check the books and just is oblivious to the family finances then I can see someone hiding it from their spouse. However if this was the case then they could just use their personal card because their spouse would never see the charges anyway.
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Brazilian Guy, 13 May 2015 @ 12:05pm

Well, i'm now wondering how much money was paid by UK taxpayers for Mr. James Bond's travelling expenses over the years.
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John Fenderson (profile), 13 May 2015 @ 12:11pm

Re:
Interestingly enough, the type of spy James Bond was modeled after largely paid their own expenses without compensation form the British government. It's why they tended to be from wealthy backgrounds. It's a fascinating history, really, and a creative way for the government to overcome a budgetary problem that otherwise prevented them from having an effective espionage service.

How successful it was remains a matter of debate.
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DB (profile), 13 May 2015 @ 12:23pm

I would be reassured to learn that it was only to hide charges from their spouse.

Some parts of the government require you to charge expenses only to their approved credit card. As mentioned above, paying for the charges was entirely your own responsibility. You didn't get reimbursed unless you submitted a documented expense report and had it approved.

The obvious reason for this was that you couldn't get a benefit from using a 'cash back' or travel points card. A less obvious reason was that you would have a credit card. You couldn't use a poor credit rating, and thus no credit card, as an reason to submit anonymous cash receipts.
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James Burkhardt (profile), 13 May 2015 @ 2:08pm

Re: Re: Re: I suspect this is being overblown....
Hiding it from their spouse, for whatever reason, is certainly easier to explain when all your spouse sees is you paying the government, and not the who is listed on the bill. But that argument is brought up because a DOD official brought it up, like it justified the process.
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James Burkhardt (profile), 13 May 2015 @ 2:08pm

Re: Re: Re: I suspect this is being overblown....
Hiding it from their spouse, for whatever reason, is certainly easier to explain when all your spouse sees is you paying the government, and not the who is listed on the bill. But that argument is brought up because a DOD official brought it up, like it justified the process.
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James Burkhardt (profile), 13 May 2015 @ 2:17pm

Re:
Except, as many commentors have also noted, in the areas of the government we are talking about, Paying for personal expenses whose type was not approved is not allowed. The IG probably wouldn't have put out a report about it if personal expenses were intended to be these credit cards. And why shouldn't you be able to get a benefit on personal expenses (and if you got cash back or travel points on government expenses, you are likely paying for it with extra ADB interest)

But my biggest question is, why are you reassured that the government's credit rating is being used to help an adulterer hide his indiscretions?
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Anonymous Coward, 13 May 2015 @ 2:56pm

Re:
get your own private army and politician in your pocket and the laws don't apply to you anymore
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Anonymous Coward, 13 May 2015 @ 2:58pm

Re: I suspect this is being overblown....
we should take them at their word because we all know they have never been caught lately in a lie right
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Anonymous Coward, 13 May 2015 @ 10:27pm

Re: Backing up the DoD A.C.
Perhaps it is just my base, but I've been called in on the carpet in the past for a potentially unauthorized charge on my travel card. Was a tad freaked until I found out that it was just a ridiculous billing department delay. I had locked my keys in a rental car while on travel and it took them 6 months to bill my card for sending out a roadside assistance to unlock the car.

As I said, perhaps it is just my base, but they keep a close eye on things where I work.

To amplify what Former Fed said, I can tell you how we work travel at my base. Lodging, Airfare (plus bagage fees, if applicable), and rental car are all fully paid for. Other expenses are paid for out of a per diem allowance. If you use the travel card for incidental expenses, you have to provide receipts. However, you can elect to pay for the incidental expenses out of pocket and receive the per diem amount as a lump sum at the conclusion of the travel. If you charge expenses in excess of per diem, you are required to make it up.

When I signed up for my travel card, I signed an agreement that indicated that I am solely responsible for the charges on the card. The contractor will take me to court prior to charging my organization, at least to the best of my knowledge.
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Jay Mitsuru (profile), 13 May 2015 @ 10:36pm

Re: Re: Adultery
The adultery thing was speculation. The 'what happens there stays there' thing associated with Vegas, so there could be plenty of things going on that they'd want to hide. Maybe Spouse said, "stay away from the tables, remember your Parent had issues". At one point I'd have suggested that they could be casino restaurants that look like an issue until they're investigate (examples being a Thai restaurant I've been to in Doha that shows up as a massage parlor on statements and a restaurant in South Carolina that shows up like a bar).

This is the DoD, and while not every DoD employee is subject to the Uniform Code of Military Justice, Adultery is already covered in article 134 as a punishable offence if it discredits the service. Using the GOVCC to fund, at least initially (see the above comment describing the payback/reimbursement system), your adultery sounds like something that would discredit your service, especially in these days of FOIA and public records and leaks and whistleblowers... Anyway the point is if it's adultery and the perpetrators were uniformed they'll get theirs. The ones I worry about going unpunished are the civilian counterparts, they seem to have no actual accountability, and I'm pretty much tired of having to deal with fallout from their crap.
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