Background of Fraud and Government Credit Cards
The suspicion that government credit cards and government travel cards have been a source of abuse is not new. Here is a sample of some of the issues that have come up in cases, and which FedSmith happened to write about. Obviously, this is a small sample, but it gives some idea of the problems that occur with these cards:
- Former DEA Employee Pleads Guilty to Credit Card Fraud Scheme
- Senate Approves Bill to Stop Abuse of Government Charge Cards by Federal Employees
- Fraudulent Credit Card Charges Lead to Indictment
- Waste, Fraud, Abuse, and Government Charge Cards
- Using Government Credit Cards: New Problems or New Opportunities?
- Using Credit Cards at HUD – It’s Like Free Money
- GAO Finds Problems in Forest Service With Use of Uncle Sam’s Credit Cards
Some of the items uncovered in these cases included interesting topics:
- $60,000 on an aquarium and related items
- $25,400 of “no-show” hotel charges for HUD employees
- GAO estimated $4.8 million in purchases sampled out of $10.6 million lacked documentation
- Lap dances and drinks at “local entertainment centers”
- Clothing, shoes, makeup, a rental car, and a massage totaling over $4,000
There are also problems with enforcing the misuse of government cards. Cases outlined in articles like Where is the Outrage? and Ethics, Credit Cards, and Government Leaders demonstrate how challenging a federal employee can lead to a lengthy process that may not result in enforcing established standards. Supervisors and managers are often aware of these types of cases and may not even try to enforce the standards that may be strict but not enforced.
More recent reports have continued to uncover problems with government cards. One report involving the Department of Defense concluded:
A Department of Defense (DOD) Inspector General report released last month found $500,000 in transactions made at casinos, mobile app stores, bars, nightclubs, and major sporting events, including the Super Bowl. Another 3.9 million transactions, totaling $1.2 billion, were not even reviewed by supervisors, the IG found. Overall, Elon Musk’s DOGE uncovered more than 4 million government credit cards responsible for 90 million transactions.
Executive Order on Cost Efficiency and DOGE
President Trump issued an Executive Order several months ago entitled Implementing the President’s “Department of Government Efficiency” Cost Efficiency Initiative. It imposed restrictions on several government activities affecting federal employees.
The purpose of the executive order is “a transformation in Federal spending on contracts, grants, and loans to ensure Government spending is transparent and Government employees are accountable to the American public.”
The topics covered are broad. Several of the topics will affect a large number of federal employees regarding their government credit cards and government travel.
DOGE has focused on government cards as a way of controlling government expenses. DOGE has issued a new statement on X noting that more about 610,000 government cards have been deactivated:
DOGE also noted that its effort has “expanded to 55 agencies” so far. A previous update in May indicated that around 523,000 cards had been deactivated.
Eliminating Unused Phone Lines in Agencies
On June 8, DOGE announced it had saved about $1.4 million per year by eliminating unused phone lines, VOIP services, and subscriptions.
Reaction of Federal Employees to DOGE Actions on Government Cards
FedSmith published an article on the DOGE efforts regarding government cards earlier this year. Some readers had a strong reaction in comments suggesting that DOGE itself is a waste of money and that the fraud they are seeking to find does not exist. Here are several examples:
- DOGE again tries to reinvent an existing and perfectly functional wheel because they are dummies that don’t understand anything.
- Just like Dead feds on the payroll, Trump is showing us that he has no idea on the workings of his own business. The system he described is already in use for a majority of government agencies. It’s a travel software system that allows justification, creation of travel, and receipt and processing claims all with supervisory controls and approvals. Has this guy ever heard of DTS? Lol.
- Yeah, personally I don’t see how ANY fraud or abuse could take place with travel cards, at my agency travel was a nightmare because they questioned pretty much every single expense and God help you if you lost a receipt.
- What other types of checks would you like to see? I was supposed to travel this past week. The notification came out so close to my travel, and a waiver wasn’t granted, there were penalties for canceling. I believe the government paid more for me not to go than to go. We tried to do the work over Teams, but since they did not have a microscope that attached to their computer, the resolution wasn’t good enough for me to review what I needed to review.
- Yeah, personally I don’t see how ANY fraud or abuse could take place with travel cards, at my agency travel was a nightmare because they questioned pretty much every single expense and God help you if you lost a receipt.
- Of course, when the President decides to jet off to the Super Bowl, it’s a model of fiscal responsibility and austerity. What better way to demonstrate a tight grip on the public purse than by splurging on a few luxury box seats and a private plane to get there?
On the other hand, some readers showed support for the DOGE effort. Here are examples from the same article:
- The nerve of these elected officials taking steps to ensure taxpayers funds are being spent and accounted for in a coherent manner. That’s obviously over the top.
- We had a guy buy a $7000 television with his GTC. All that happened was his GTC was revoked and he wasn’t allowed to travel on the Govt dime again. He quit and went to work for a contactor. He never paid it back. He still has that ginormous flat screen in his house.
- Oh there is fraud. Its always odd when the upper echelon has a “meeting” out of state in the same area where his kid lives. Rare, sure. But it happens all the time.
- See unnecessary travel all the time. Boondoggles to Las Vegas, Orlando, LA, and Colorado Springs, not to mention Germany, Korea and Hawaii. Need a two person team, why not take five or six….and why not bring you spouse along (they don’t pay for them with gov funds) and take some leave and make it an extended vacation. Oh, and don’t forget, each person needs their own rental car.
Summary
Government credit cards have been a source of some problems for decades. Perhaps it is rare and some of the examples above are just because the government is such a big organization and fraud is rare. It is also possible there is a great deal of fraud and it is not discovered or too much trouble to take action because of the complexity of the federal appeals system.
Credit to DOGE for giving this the “old college try”. If there is fraud to be uncovered, or another system would work better, everyone will benefit.
Thanks also to those readers who share the benefit of their experience by submitting comments.
