Union Tribune 

March 14, 2002

Pentagon credit card abuse still reported
But two S.D. units improve, GAO says


WASHINGTON Months after federal investigators found
massive abuse of government credit cards at two Navy
commands in San Diego, workers throughout the Defense
Department still use the cards for thousands of dollars in
questionable purchases, a House panel was told yesterday.

Although the San Diego commands the Space and Naval
Warfare Systems Center and the Navy Public Works Center
have improved their control of the credit cards, questionable
spending continues there and at other Defense Department
organizations, a General Accounting Office official testified.

The government "purchase cards" were intended to save time
and money by allowing authorized workers to spend up to
$2,500 for official purposes without going through a formal
requisition process.

But the GAO found that the cards were used in strip joints and
gambling casinos, for expensive clothing and luggage, home
appliances, toy robots and even a breast enhancement

Uniformed and civilian defense personnel caught using the
government cards for clearly improper purchases often were
allowed to retire or leave without repaying the taxpayers, the
GAO investigation found.

In one case, a civilian Public Works Center worker received a
promotion after she had used a government card for $12,000 in
purchases that included a kitchen stove, gift certificates,
groceries and clothing, said Sen. Charles Grassley, R-Iowa.

That is an example of the lack of accountability in management
of the credit cards, Grassley said.

"A person who holds up a liquor store and takes $500 in cash
can go to jail for 15 years. If you use DOD 'plastic' to steal
$12,000 . . . you get a promotion," the senator told the House
Government Reform subcommittee on government efficiency.
"That's not right."

That case was referred to the U.S. attorney in San Diego, who
refused to prosecute, GAO investigator John Ryan said.

The former public works employee now works in Washington for
the Army, whose officials have been alerted to her case,
according to Deidre Lee, director of defense procurement.

The subcommittee chairman, Rep. Stephen Horn, R-Long Beach,
and Grassley have been trying for more than a year to rein in the purchase-card program.

In July, Horn's panel received a GAO report that cited "a
significant breakdown in internal controls" that made the two
San Diego units "vulnerable to fraudulent, improper and abusive
purchases and theft and misuse of government property," GAO
executive Gregory D. Kutz said.

Kutz and Horn credited the former and present commanders of
the Public Works Center with cooperating with the follow-up
investigation and in making "significant improvements" in
controlling the credit cards.

But they said the former head of the Space and Naval Warfare
Systems Center, known as SPAWAR, justified the allegedly
improper purchases and refused to cooperate with the GAO.

That officer, Capt. Ernest Valdes, was forced to retire and fined
$1,000 last Dec. 8 for improper conduct unrelated to the credit
card abuse.

Kutz said he was "encouraged by the efforts" of the current
commander, Capt. Patricia Miller, but he was concerned that
"cultural resistance in SPAWAR" will make it difficult to stop the

Miller said she agreed there "was a command climate that
encouraged abuse."

"I am personally committed to changing the culture of my
command," she said.