WASHINGTON – Service members and other Pentagon employees used Defense Department credit cards for thousands of unauthorized transactions at casinos and strip clubs across the country, according to a audit released Tuesday by the Pentagon’s internal watchdog.
The report by the department’s Office of Inspector General found that misuse of the official credit cards was highest in the Air Force, followed by the Army, the Navy and the Marine Corps, for the one-year period investigated, July 1, 2013, through June 30, 2014.
The locations where Defense Department credit cards were used for personal transactions included the VIP Room of the Sapphire Gentlemen’s Club and Vegas Showgirls in Las Vegas, Larry Flynt’s Hustler Club in Baltimore, and Dreams Cabaret in El Paso, Texas.
“DOD cardholders improperly used their government travel charge card for personal use at casinos and adult entertainment establishments,” Michael J. Roark, assistant inspector general for contract management and payments, wrote in the report.
The head of the Defense Travel Management Office acknowledged the abuses, but protested that they represent a tiny fraction of overall use of the Pentagon’s travel credit cards.
“The report language applies a very broad stroke against all cardholders when, in reality, personal use of the Government Travel Charge Card is negligible when compared to the size and scope of the program,” Harvey W. Johnson, the office director, responded in a letter provided along with the report.
He noted that a total of $3.4 billion in legitimate expenses were charged to the cards in the same time period.
Perhaps the most intriguing aspect of the report is its identification of more than $2.2 million in charges for what it described as “official use” at casinos and adult establishments.
The finding suggests that Pentagon personnel are permitted in some circumstances to dine and drink or entertain at casinos and strip clubs.
The inspector general’s office found weak internal controls in Pentagon accounting systems and failures to report suspicious charges to the Defense Department by Citibank, which provides the travel cards. Several Pentagon financial agencies and Citibank agreed to implement stronger controls, such as using codes to ferret out casinos and strip clubs that use innocuous-sounding names to disguise the nature of their business.
The Pentagon also agreed to be on the lookout for red flags such as ATM cash withdrawals that exceed travel amounts allowed for meals and incidental expenses and multiple ATM withdrawal rejections.
In one example cited in the report, a petty officer first class with the Navy Special Warfare Group spent six times his allotted meal and incidental expense money while visiting four different adult establishments in El Paso, spending $1,116 during 17 days of travel.
After an appearance before a Disciplinary Review Board, that officer completed Travel Card 101 training, signed a new statement of understanding on how to use the cards and provided a training session to his peers.
In another example, a senior airman from the 4th Aircraft Maintenance Squadron at Seymour Johnson Air Force Base in North Carolina spent a total of $4,686 at Sapphire Gentleman’s Club while traveling to Nellis Air Force Base outside Las Vegas. That amount was 13 times more than his travel allowance of $359.25 for the trip.
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