Watchdog: Pentagon may have reimbursed casino, strip club visits

Top Department of Defense (DoD) officials did not take appropriate action after they found that employees used their work credit cards to pay for casinos and strip clubs, according to an inspector general report released Tuesday.

{mosads}“DoD management did not take appropriate action when notified that cardholders potentially misused their travel card at casinos and adult entertainment establishments,” the report says. “Specifically, DoD management and travel card officials did not perform adequate reviews for the cardholders reviewed and did not take action to eliminate additional misuse.”

Because the Pentagon didn’t emphasize proper use of the travel cards, the report concluded, the program was vulnerable to misuse, less money was available for legitimate travel expenses, the Defense Department opened itself to national security vulnerabilities and cardholders who needed help for gambling addictions were not offered it.

The audit is a follow-up to a May 2015 report that found Defense Department cardholders made 4,437 transactions worth $952,258 at casinos. Also, there were 900 transactions worth $96,576 at strip clubs, according to the previous report.

At the behest of the Senate Armed Services Committee, the inspector general took a second look at the issue to see whether anyone sought or received reimbursement for the expenses.

In the audit, the inspector general reviewed a sample of 30 cardholders.

From that, 22 sought and received reimbursements on 131 vouchers totaling $8,544, according to the report.

Further, Pentagon management did not consistently consider the security implications of misusing the cards, the report said. Only two of the 30 cardholders were referred to the proper adjudication authority to review their security clearance before meeting with the inspector general’s audit team.

After meetings with the audit team, another seven of the cardholders were referred for security clearance review.

In one case highlighted by the report, an army lieutenant colonel told an agency program coordinator at the Defense Travel Management Office that he would tell his commander about his card use after the inspector general found $2,242 in casino charges.

Month later, the audit team met with the commander, who was unaware of the issue, according to the report. After that, the commander deactivated the lieutenant colonel’s card, barred him from traveling and suspended his security clearance.

In another case, a civilian at the Defense Threat Reduction Agency continued to misuse his card despite already receiving a letter of reprimand and a warning that his security clearance would be lost for doing so. After the reprimand and warning, he withdrew money from ATMs at casinos seven more times for a total of $2,270.

In total, from October 2010 to September 2015, that cardholder charged $9,483 at casinos and ATMs, according to the report.

The Pentagon concurred with most of the report’s recommendations to revise its travel card regulations.

But, its response said, the improper payments were a small percentage of the Pentagon’s travel charges.

“I believe it is important to note that the monetary amount of the personal use of the government travel charge card indentified in the audit amounted to less than 0.04 percent of the total travel card spend and less than 0.03 percent of total transaction volume for the period covered by the audit,” Deputy Assistant Secretary A. M. Kurta wrote.

Further, Kurta took issue with how the report explained the travel reimbursements.

“While the report shows that approximately $8,500 was improperly reimbursed, it does not explain that not all this amount was specifically related to improper use of the travel card itself, but that a portion was a result of improper travel payments discovered during the audit,” Kurta wrote. “Additionally, more than half of this amount ($4,890.58) was attributable to a single cardholder.”