[Congressional Record Volume 152, Number 72 (Thursday, June 8, 2006)]
[Senate]
[Pages S5661-S5662]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. Coleman):
  S. 3480. A bill to prevent abuse of Government credit cards; to the 
Committee on Homeland Security and Government Affairs.
  Mr. GRASSLEY. Mr. President, today I am reintroducing the Government 
Credit Card Abuse Prevention Act to address, in a comprehensive way, 
the abuse, misuse, and fraud that has occurred with Government charge 
cards. Some people might ask, ``Why are you bothering with legislation? 
Is it that big of a problem?'' It is true that most Government 
employees who are entrusted with a travel card or a purchase card do 
not abuse it. It may also be true that the amount of money concerned is 
only a fraction of any agency's annual budget. Well, when you have 
agencies like the Department of Defense with an over $500 billion 
budget, even a small fraction means a lot of taxpayers' money. When I 
asked GAO to look into instances of waste, fraud, and abuse with 
Government charge cards, starting with the Department of Defense, we 
found that purchase cards were used to spend taxpayer money for a 
sapphire ring, LA-Z-Boy reclining rocking chairs, and a dinner party 
for a general at Treasure Island Hotel and Casino that included $800 
for alcohol. Government travel cards were used for gambling, sporting 
events, concerts, cruises, and even gentlemen's clubs and legalized 
brothels. Government travel cards are for official travel-related 
expenses only, not tickets to a Dallas Cowboys game or a Janet Jackson 
concert, but these are real examples of improper purchases GAO 
uncovered in reports I had requested. While travel cards are not paid 
directly with taxpayers' money like purchase cards, failure by 
employees to repay these cards results in the loss of millions of 
dollars in rebates to the Federal Government. Also, when credit card 
companies are forced to charge off bad debt, they raise interest rates 
and fees on everyone else.
  Based on what we found in DoD, I worked with GAO to uncover similar 
problems in the U.S. Forest Service where one employee purchased five 
digital cameras at a cost of $2,960, six computers for $6,019, three 
palm pilots totaling $736, jewelry worth $1,967, and $6,101 in other 
items like cordless telephones, figurines, and Sony Playstations, all 
for personal use and all at taxpayer expense. GAO subsequently found 
similar problems at

[[Page S5662]]

other agencies like the Federal Aviation Administration and the 
Department of Housing an Urban Development. I have cited just some of 
the extreme examples, but there are many more instances where employees 
purchased items that were not needed by the agency or where a cheaper 
alternative would meet the purpose just as well. This occurred because 
of weak internal controls within the agencies and is something that 
clearly needs to be addressed governmentwide. Based on oversight from 
Congress, GAO, and agency inspectors general, the situation has 
improved in many agencies and I am pleased that the Office of 
Management and Budget has begun to bring about an improved control 
environment through direction contained in OMB Circular 123. However, 
there is more to be done and my experience has convinced me that 
legislation is necessary.
  The Government Credit Card Abuse Prevention Act is largely based on 
the recommendations by GAO regarding what controls are necessary to 
prevent the kinds of waste, fraud, and abuse we have uncovered. Since I 
originally introduced this legislation in the last Congress, I have 
collected input and ideas and worked to refine the bill to make it both 
comprehensive and workable. The provisions in my bill are simply 
commonsense internal controls that should be present in every Federal 
agency to prevent improper purchases. These include: performing credit 
checks for travel cardholders and issuing restricted cards for those 
with poor or no credit to reduce the potential for misuse; maintaining 
a record of each cardholder, including single transaction limits and 
total credit limits so agencies can effectively manage their 
cardholders; implementing periodic reviews to determine if cardholders 
have a need for a card; properly recording rebates to the Government 
based on prompt payment; providing training for cardholders and 
managers; utilizing available technologies to prevent or catch 
fraudulent purchases; establishing specific policies about the number 
of cards to be issued, the credit limits for certain categories of 
cardholders, and categories of employees eligible to be issued cards; 
invalidating cards when employees leave the agency or transfer; 
establishing an approving official other than the purchase cardholder 
so employees cannot approve their own purchases; reconciling purchase 
card charges on the bill with receipts and supporting documentation; 
submitting disputed purchase card charges to the bank according to the 
proper procedure; making purchase card payments promptly to avoid 
interest penalties; retaining records of purchase card transactions in 
accordance with standard Government recordkeeping polices; utilizing 
mandatory split disbursements when reimbursing employees for travel 
card purchases to ensure that travel card bills get paid; comparing 
items submitted on travel vouchers with items already paid for with 
centrally billed accounts to avoid reimbursing employees for items 
already paid for by the agency; and submitting refund requests for 
unused airline tickets so the taxpayers don't pay for tickets that were 
not used.
  My bill would also provide that each agency inspector general will 
periodically conduct risk assessments of agency purchase card and 
travel card programs and perform periodic audits to identify potential 
fraudulent, improper, and abusive use of cards. We have had great 
success working with inspectors general using techniques like data 
mining to reveal instances of improper use of government charge cards. 
Having this information on an ongoing basis will help in strengthening 
and maintaining a rigorous system of internal controls to prevent 
future instances of waste, fraud, and abuse with government charge 
cards. In addition, my bill requires penalties so that employees who 
abuse Government charge cards cannot get away scotfree. In cases of 
serious misuse or fraud, the bill provides that employees must be 
dismissed and suspected cases of fraud will also be referred to the 
appropriate U.S. attorney for prosecution under Federal antifraud laws. 
Hopefully this will send a clear message that such activity will not be 
tolerated so as to act as a deterrent for others.
  I am proud of the oversight work that I do to uncover waste, fraud, 
and abuse, but sometimes I feel like Sisyphus, doomed to eternally roll 
a boulder up a hill only to see it fall again. Instead of eternally 
looking over the shoulder of agencies to find waste that should never 
have occurred and then poking and prodding them to close the barn door 
after the horse has gotten out, we need to put the internal controls in 
place to make sure these problems don't happen in the first place. This 
bill will accomplish that for the Government charge card programs so 
that American taxpayers can sleep soundly knowing that their money 
isn't being charged away by some bureaucrat. I hope my colleagues will 
support this commonsense measure and that it will be enacted into law 
in short order.
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