In a witty TV ad, an ill-groomed, middle-aged man sits in a recliner, drinking beer. From his mouth, in perfect lip-sync, comes the voice of a mischievous young lady.
“I just had to have it,” she says. “$1,500 for a leather bustier. I didn’t care. It lifts and separates. Plus, it’s not like I’m actually paying for it. Ha ha ha.”
The ad promotes Citibank’s ability to protect customers from identity theft. Now, in an ironic twist, a General Accounting Office (GAO) report released this month reveals that bureaucrats in the Veterans Health Administration have been using cards issued by Citibank to charge movie and baseball tickets, children’s clothing, country club outings, expensive meals and even cases of beer to the taxpayers.
Over the past four years, GAO has released several similar reports studying how federal workers use–and sometimes abuse–charge cards in the taxpayer’s name.
But neither Citibank, nor any of the other financial institutions that issue these cards, is at fault. They are wholly innocent contractors doing exactly what the government has contracted with them to do.
The initial fault lies with Bill Clinton.
In 1989, says GAO testimony presented April 28 to the Senate Governmental Affairs Committee, the government started a “purchase card” program “to streamline federal agency acquisition processes.” Under the program, the government “awarded contracts to banks to provide standard commercial charge cards for use by federal employees.”
But only a readily monitored few received these cards. “Use of the purchase card,” says GAO, “was initially restricted to procurement personnel.”
Then a month before the 1994 midterm election, President Clinton signed the Federal Acquisition Streamlining Act. It authorized low-level federal managers to use government charge cards, and, as Clinton put it, “decide on purchases of less than $2,500.”
Yet, for Clinton, even that did not go far enough. As he signed the charge-card law, he announced: “Today, I am signing an executive order that will go a little beyond the law. It will actually give people who use these products the authority to make small purchases so the managers don’t have to do it either.”
Clinton advisers admitted a political motivation for the new policy. “White House officials said their polling shows that Americans believe government in Washington does not work, and Clinton yesterday sounded the theme,” said the Washington Post in its story about the signing. “Cleaning up the mess in Washington is something that runs through every voter interview,” said a Clinton official. “This is a way to do it, a way we can promote and one where we can make a strong ‘New Democrat’ case that what we want is not more government but government that works.”
“We changed the way government buys things to make it more competitive so you won’t have to read about a system that produces those $500 hammers and $50 ashtrays any more,” Clinton was soon bragging in a stump speech.
He was wrong, of course. Giving credit cards to bureaucrats did not save money.
In 1994, says GAO, federal charge-card expenditures were $1 billion. By 2000, 500,000 federal workers carried the card, using it to spend $12 billion. By 2003, card carriers dropped to 325,000, but spending jumped to $16.4 billion.
That is almost twice as much as government spent that year on the Legislative Branch ($3.4 billion) and Judiciary Branch ($5.1 billion) combined.
When Clinton signed the charge-card law, he said it would let federal workers “shop for the best deal without being bogged down in any bureaucracy.” But GAO discovered the opposite is often true. “Dun and Bradstreet’s analysis of fiscal year 2002 Interior transactions, conducted on our behalf,” said GAO, “illustrates that cardholders frequently paid more than necessary.”
Certainly, many bureaucrats would never abuse their card privileges. But some cannot resist the temptation. “A weak overall control environment and substantial breakdowns in internal control left agencies vulnerable to fraudulent, improper and abusive charges,” said GAO April 28.
At VHA, GAO said this month, it “tested only a small portion of the transactions that appeared to have a higher risk of fraud, waste or abuse” and found $300,000 in wasteful or questionable charges. Among the discoveries: $500 to Hollywood Beach Country Club, $788 to Gap Kids, $1,705 to the Baltimore Orioles, $2,081 to the Brass Elephant restaurant, $30,000 for movie gift certificates and $38 for three cases of beer “where the cardholder stated that the purchase was made at the request of a VA pharmacy for a patient.”
What a fitting legacy for Bill Clinton and his reinvention of government.
But Clinton has been gone from office four years now. Isn’t it time Republicans closed the charge accounts he opened in the taxpayer’s name?