Report: DoD IG Says Government Credit Cards Used for Gambling, Escorts

credit cards

A Pentagon audit has found some Defense Department employees used government credit cards for gambling and "adult entertainment," perhaps to keep spouses from learning of the charges, the news website Politico has reported.

The Pentagon Inspector General uncovered evidence of the charges during an audit of government travel charge transactions and is expected to release the findings in the coming weeks, Politico said.

A Pentagon official who was briefed on the findings told Politico that the federal government may not have paid for the charges, which were incurred at casinos and for escort services and "other adult activities" in Las Vegas and Atlantic City. Civilian and military employees who hold government credit cards pay their own bills and submit receipts for reimbursements.

"The official said that the employees may have used the government cards for gambling and escort services in order to shield the charges from spouses," said Politico, which did not name the official.

Politico quoted the official as saying the audit was of the credit card system and not an investigation of particular individuals, so the most likely result will be that the agencies and military branches most affected "will be compelled to remind employees that the practice violates policy — and possibly the law."

The 2012 Government Charge Card Abuse Prevention Act required federal agencies to step up oversight of purchases on government-issued credit cards. Sen. Chuck Grassley, R-Iowa, who proposed the law, said the legislation was designed to halt abuses such as the ones uncovered during the audit.

"I’m interested to see the report and find out more about what’s being done, right and wrong, at DOD to prevent abuse," he told Politico. "What I hope is that my reforms that became law have been implemented well and that agencies and auditors are using the reforms to catch problems."

Some estimates indicate prohibited purchases cost the taxpayers hundreds of millions of dollars a year. A 2008 report by the Government Accountability Office found that abuse of government credit cards had been increasing, with charges including Internet dating services and lavish dinners with expensive liquor.

Despite the 2012 law, federal auditors told Congress last year that the problem persists. A Labor Department audit found that Job Corps employees charged nearly $100,000 to the government for haircuts, clothing and personal cell phone service.

Three employees were fired and two resigned last year at the Bureau of Land Management after they charged $800,000 worth of gift cards on their government credit cards, Politico said.

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