Defrauded: Millions of Your Tax Dollars

April 8, 2008— -- Talk about eating at the government trough. Some $13,000 of your tax money was spent on steak, crab and 40 bottles of wine at one high-end steakhouse chain for 81 postal service workers — a $160 per person meal — and it was all charged to government purchase cards.

A National Science Foundation worker used her card to spend $1,800 for manicures and cosmetics at a nail salon chain. One NASA employee spent $800 on two video iPods for so-called data storage, when he was actually storing his personal songs and videos.

"If you don't watch the pennies, they become millions, and if you don't watch the hundreds and thousands, they become billions," Sen. Norm Coleman, R-Minn., said.

But who is watching? Forest Service employee Debra Durfey, 50, of Echo, Ore., used the program to write checks to her live-in boyfriend amounting to $640,000, over six years spent on gambling and mortgage payments. But no one ever noticed.

"It took a whistleblower to find out that she had written 180 checks to her boyfriend — it's the kind of problem that gets recognized immediately in the private sector," said Tom Schatz of Citizens Against Government Waste. "Unfortunately, with our tax dollars at stake, it takes a lot more time to find out what's going on."

The government cards actually streamline the purchasing process, saving Uncle Sam about $2 billion a year. But the abuse and poor accounting cost millions, as in the case of four defense department workers who spent $77,000 on clothes and custom-made Brooks Brothers suits for service members. The suits were charged to their cards and cost three times the government allowance.

"The good news is that they are effective tools for saving dollars," Coleman pointed out. "The use of cards in 2007, I think, affected about $1.8 billion in savings. In fact, we get rebates, $107 million back to the government. The bad news is the lack of control over the use of the cards."

Schatz said, "The incentive is not there to control these costs. The agency gets paid whether the money gets used for purposes that comply with the rules or not. So, unless people go to jail, unless there are serious consequences for this kind of abuse, it's going to continue."

One postmaster used his government card, spending more than $1,000, to subscribe to an Internet dating site.

"Having a postmaster use an Internet dating service for married people, certainly strikes one as something that should have been caught immediately, and hopefully, that kind of activity will not happen again," Schatz said.

Coleman said, "Average people, regular businesses, take a look at expenses and purchases like this and have, in place, systems. Government should not be held to a lesser standard, if anything, the same or higher standard because it's not our money, it's your money."