[Congressional Record Volume 151, Number 125 (Friday, September 30, 2005)]
[Senate]
[Pages S10797-S10799]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Wyden):
  S. 1805. A bill to repeal the increase in micropurchase authority for 
property and services for support of Hurricane Katrina relief and 
rescue operations; to the Committee on Homeland Security and 
Governmental Affairs.
  Mr. DORGAN. Mr. President, Senator Wyden and I are introducing 
legislation today to change a provision in law that was attendant to 
the emergency supplemental passed recently dealing with hurricane 
Katrina. That provision in law increased the amount of money that would 
be available to be spent on a Government credit card from $2,500 to 
$250,000. That is right--$250,000 for purchases on a Government credit 
card.
  Here is what a Government credit card looks like. There are about 
390,000--somewhere in that neighborhood--390,000 Government credit 
cards in the country. I have three GAO reports that describe 
substantial abuse and misuse of these Government credit cards.
  The proposal that passed this Congress attendant to the hurricane 
emergency relief says that on these credit cards, the limit will go 
from $2,500 to $250,000. Let me describe for a moment what the GAO 
found in various investigations.
  What has been charged to a Government credit card? Hiring 
prostitutes, gambling, breast-enlargement surgery--yes, it was for a 
girlfriend of somebody who had a Government credit card--cigars, 
mounting a deer head, jewelry, wine, and the list goes on.
  Now the limit goes to $250,000. We aim to take it back to $2,500. It 
will still have the emergency capabilities that existed since 9/11 
which will allow a $15,000 limit under emergencies.
  We had a hearing at which a professor from GW Law School who is an 
expert in this area of Government procurement testified. Here is what 
he said about the $250,000 credit card limit:

       The potential for abuse is staggering.

  Everybody knows that: ``The potential for abuse is staggering.'' If 
you don't believe it, take a look at the GAO reports with respect to 
the abuse when the limit was $2,500. Now it is $250,000 for a credit 
card purchase? Who is going to stand up for the interest of the 
taxpayers?
  This fellow, Mr. Safavian, was the top contracting officer for 
purchases of

[[Page S10798]]

the Federal Government. He just said several weeks ago about the 
$250,000:

       This guidance--

  That he and OMB would provide--

       This guidance helps make sure that adequate management 
     controls are in place to ensure that taxpayers' dollars are 
     spent efficiently and responsibly in support of disaster 
     victims.

  Meaning the new $250,000 on credit cards will be spent efficiently 
and responsibly. That is from David Safavian, Director of the Office of 
Procurement and Policy. The problem is, Mr. Safavian was arrested by 
the FBI on September 19 and charged with lying to an ethics officer and 
so on. He is the guy who gave us the assurance that taking the credit 
card from $2,500 to $250,000 will be just fine because there are all 
these limits in place and it will be spent wisely and efficiently. Yes, 
and the Moon is made of green cheese.
  Who is going to believe this, especially when we have the GAO reports 
that show past abuses with even the $2,500 limit, which includes the 
hiring of prostitutes on Government credit cards? It includes breast-
enlargement surgery on Government credit cards. When on Earth will 
people wake up and start thinking?
  So Senator Wyden and myself are today introducing legislation to say, 
How about let's sober up and think through this the right way on behalf 
of the American taxpayers.
  We want to help hurricane victims, no question about that. But I do 
not want people walking around with credit cards that have a $250,000 
limit that say U.S. Government on them, in a way that the GAO says puts 
us at risk and in a way that Government procurement experts tell us is 
very dangerous for the American taxpayer.
  I am pleased to do this with my colleague, Senator Wyden. For the 
past several years, Senator Wyden and I have taken a look at a whole 
range of wasteful issues. I might just say that Senator Wyden and I, a 
while back, found deep in the bowels of the Pentagon there was a plan 
to create what was called a futures market for terrorism. I think they 
were preparing to spend another $8 million on it. And, yes, they were 
going to actually have a futures market for terrorism so that people 
could make wagers buying futures contracts on things such as how many 
American soldiers will be killed in the next year, will the King of 
Jordan be assassinated within the next year. One could actually wager 
and make money by betting on those kinds of things.
  Senator Wyden and I blew that wide open. The next day, both Secretary 
Rumsfeld and the President said they did not know it was going on. They 
shut it down and it is all over. In my judgment, that was unbelievably 
stupid as a public policy, whoever allowed that to happen. It is now 
shut down.
  A lot of bad things happen in circumstances where no one is watching. 
In this case, with credit cards that have a $250,000 limit, there is 
something fundamentally wrong with that. I do not know who put that in 
the emergency supplemental. It should not have been there. But it was 
there. We aim to repeal it on behalf of the American taxpayer.
  Mr. WYDEN. Will the Senator yield?
  Mr. DORGAN. I would be happy to yield to my friend from Oregon.
  Mr. WYDEN. I appreciate my colleague yielding to me and particularly 
highlighting the need for some real accountability and protection for 
the taxpayers at this time. We are seeing expenses for the Government--
the war in Iraq, the various disasters that have hit--exploding to the 
point where people are saying, well, let us hold off on giving senior 
citizens some help with their prescription drugs.
  I think what the Senator is saying is, before one takes those kinds 
of steps, put the brakes on the opportunity for ripping off taxpayers.
  I want to ask the Senator a question that really stunned me. There 
are now about 392,000 Federal employees who have these credit cards 
across the country. We have been trying to figure out how many folks 
have them on the gulf coast and how many of the folks have this 
$250,000 authority. The two of us feel very strongly that there are a 
lot of dedicated people down there who are working very hard and nobody 
is suggesting otherwise, but what possible argument would there be for 
not having something along the lines of some guardrails to try to make 
sure that people did not abuse these credit cards?
  That strikes me as a pretty modest step, just have some guardrails 
rather than saying, look, go out and take $250,000 worth of authority 
and we will see what happens.
  Mr. DORGAN. Mr. President, in answer to the Senator's request, he is 
asking that of perhaps 390,000 credit cards that exist in the 
possession of Federal workers, do we know how many have this $250,000 
limit? We do not have the foggiest idea.
  The Senator indicated we want to help people who are dealing with the 
hurricane. Our interest is not in pulling the rug out from under people 
who are working and trying to respond to the devastation of these 
hurricanes, but I am not interested in paving the way for additional 
waste, fraud, and abuse with the misuse of Federal credit cards.
  Yes, there are thousands of dedicated public servants who will use 
these responsibly, but increasing the limit from $2,500 to $250,000, in 
my judgment, is fundamentally irresponsible, and we aim to take it back 
with this amendment and aim to offer this amendment to the next 
supplemental that deals with this hurricane.
  I will yield the floor so my colleague from Oregon can have the 
floor, and I would like to propound a question at some point later when 
he finishes his statement.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. WYDEN. Mr. President, it seems to me that the bottom line is we 
want Federal workers in the hurricane zone to have all the tools they 
need to get the job done. But a month after the hurricane hit, we do 
not need $250,000 worth of authority on a credit card. One needs 
permission to spend that kind of money. The fact is, under the current 
rules one can have it when they need it, just not on a credit card 
where they do not even have to ask. This is a commonsense step.
  Senator Dorgan indicated if somebody needs to spend more than $15,000 
a shot, there are already streamlined, simplified acquisition 
procedures in place to let them do that. Those procedures at least have 
some oversight. The two of us supported the Katrina bills that came 
through the Congress. We support the rule that was already in place 
that increases the spending power of these cards by a reasonable amount 
in an emergency from $2,500 to $15,000. What the two of us feel 
strongly about and what we do not support is how can one support 
excessive spending without any safeguards at all?
  We heard from a Dr. Yukins at George Washington that there is 
extraordinary potential for abuse here. Dr. Yukins said it was 
staggering.
  In looking at Government waste at a variety of agencies, Senator 
Dorgan and I have come to the conclusion that when one is talking about 
the Department of Homeland Security, when one is talking about the 
Federal Emergency Management Agency, and when one is talking about the 
Department of Defense, what one needs is more accountability and more 
oversight rather than less.
  In Homeland Security, we have seen massive outlays for ineffective 
programs to hire the TSA screeners. At FEMA, it is hard to know where 
to start there, but folks may have heard on public radio yesterday that 
a Government Accountability Office audit more than a year ago said that 
only one in several dozen FEMA employees could prove that they had done 
the proper paperwork for procurement authority.

  When it comes to Iraq, all one needs to do there is talk about Iraqi 
contracts. Senator Dorgan and I have tried to put in place some 
oversight and some accountability there, and we will continue on that 
as well. So this is not the only avenue for abuse of taxpayer dollars. 
If one wants to come to the floor and talk about no-bid contracts and 
the like, there is plenty to dig into in terms of more oversight and 
more accountability for our taxpayers. This is a commonsense step that 
the Senate can take.
  I have listened to Senator Collins on this issue, as well as Senator 
Grassley. A number of colleagues on both sides of the aisle have 
expressed concern about this in effect blank check to use credit cards, 
and use them on some pretty high ticket items.

[[Page S10799]]

  I am going to yield the floor back to Senator Dorgan, but given the 
fact that there is a catalog of abuses--this happened outside the 
hurricane zone before anybody knew about Katrina--let us now deal with 
an emergency, let us recognize that there are different spending needs 
given that emergency, but let us also make sure that there are some 
safeguards in place to make sure the taxpayers' interests at a critical 
time when costs in Government are exploding, let us make sure there are 
some safeguards in place to protect the public.
  I yield the floor.
  Mr. DORGAN. Mr. President, I conclude by pointing out that, yes, 
others have described their concern about the $250,000, and some have 
talked about a $50,000 limit and other approaches. Senator Wyden and I 
say that we ought to go back to the old limit, $2,500 per credit card 
per transaction. That is why we introduced this legislation and hope 
that our colleagues will agree.
  Again, this is what the credit card looks like. There are nearly 
400,000 that are possessed by Federal workers. We do not allege that 
these are not dedicated public servants. We do allege that at least in 
some instances, according to three GAO reports, there have been massive 
abuses. These are just a few.
  I put up another chart about them: Liquor, gambling, mounting a deer 
head, cigars, ski clothes and diamond rings, not to mention hiring 
prostitutes and breast enlargements--all put on Government credit 
cards.
  Does that make a person look and pay attention? Of course. Should 
that be happening? Of course not.
  The $250,000 limit on the credit card, this is what Professor Yukins 
said, who is an expert in these areas:

       [T]he Administration has announced various protective 
     measures. . . . It appears, however, that those additional 
     protections will not address the core problem with the new 
     procurement exceptions: Under the new law, agencies will be 
     able to spend billions of relief dollars without any of the 
     competition, transparency or other legal rules that normally 
     protect our procurement system.

  I ask my colleagues how this got into the supplemental bill, taking 
it from a $2,500 to a $250,000 limit on a Federal Government credit 
card. How did that happen? When one looks at that they say: Wait a 
second, we are going to increase the limit on a credit card from $2,500 
to $250,000? What on Earth are you thinking about?
  Well, it came from the White House. The White House made the specific 
request, believing in the wake of Hurricane Katrina people were going 
to need emergency capabilities to do these kinds of purchases. So the 
White House said they wanted an increase to $250,000. The person they 
sent down to brief staff in the Senate of how this would work and why 
it is necessary was Mr. David Safavian. He was the head of all 
procurement policy at the Office of Management and Budget in the White 
House.
  What did he tell us publicly and what did he tell the American 
people? ``This guidance''--guidance about procurement with the $250,000 
limit on a credit card:

       This guidance helps make sure that adequate management 
     controls are in place to ensure that taxpayers' dollars are 
     spent efficiently and responsibly in support of disaster 
     victims.

  That was said 2 weeks before Mr. Safavian's arrest by the FBI for 
lying. This is the person who came to brief the Senate staff about why 
the $250,000 limit on credit cards was necessary.
  It not only is not necessary, it is terribly unwise. In my judgment, 
unless changed, from this we will see a dramatic amount of waste, 
fraud, and abuse. There is a right way and a wrong way to do things. I 
guarantee this proposal to increase credit card limits for Federal 
employees to $250,000 is the wrong way.
  Senator Wyden and I are going to do everything we can to see if we 
cannot in more sober moments persuade everyone here that we ought to go 
back to the previous limits and that we ought to enforce them the right 
way. The GAO's reports say that even with the $2,500 limits, there are 
serious problems with the use of these Federal credit cards.
  That is our proposal. I want to thank my colleague from Oregon with 
whom I have worked on a number of occasions on many areas of Federal 
waste. Yes, this is a big old government, a big bureaucracy. There are 
wonderful people who work in it, and it does wonderful things. There 
are also areas of waste that make me furious. Senator Wyden and I have 
worked on that in a number of areas, in a number of ways, and I hope we 
can continue to do that. This is a preventive way to try to restore 
that $2,500 as a limit on Federal credit cards.
  I yield the floor.
                                 ______