Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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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 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.

http://thomas.loc.gov/