Statements on Introduced Bills and Joint Resolutions
Floor Speech
Statements on Introduced Bills and Joint Resolutions
By Mr. GRASSLEY (for himself, Mr. LIEBERMAN, and Ms. COLLINS):
S. 300. A bill to prevent abuse of Government charge cards; to the Committee on Homeland Security and Governmental Affairs.
Mr. GRASSLEY. Mr. President, we often use the metaphor of credit cards to talk about uncontrolled government spending, but in some cases, wasteful government spending is quite literally enabled by the use of charge cards in the hands of government bureaucrats. That is why I am reintroducing the Government Charge Card Abuse Prevention Act. This legislation will ensure that Federal departments and agencies have in place, and keep in place, the kinds of safeguards necessary to prevent waste, fraud, and abuse with government issued charge cards. We have made a lot of progress since I first started shining the spotlight on this issue with the help of the Government Accountability Office, GAO. This legislation will secure the gains we have made to prevent any backsliding while adding in extra mechanisms to prevent and detect misuse of government charge cards.
In 1998, the General Service Administration, GSA, entered into a contract with a set of commercial banks to utilize charge cards, not unlike those used by businesses large and small and millions of consumers worldwide. This is called the SmartPay program. These government charge cards include government purchase cards, which are used for acquisition of commercial goods and services by agencies and paid directly by the agency, and government travel cards, which are used to pay for individual government travel expenses and issued in the name of individual government employees.
Government charge cards were intended as a low cost method to streamline government acquisition and travel processes. The whole idea was to adopt the best practices of the commercial sector. In the business sector, charge cards have been a success. They save time and money. The main reason they work so well is because the control environment in the private sector is rock solid and accountability is a fact of life. When a business is spending its own money, it is going to be sure that it accounts for every penny or it won't stay in business. As a result, corporate America, if an employee is caught abusing a card, they'll lose it or get fired.
It is certainly a good idea for government to learn lessons from the business sector. However, there are certain fundamental differences between the private sector and the governmental sector that call for extra vigilance, mainly the fact that government spends other people's money. Human nature being what it is, most people are not nearly as careful spending other people's money as they would be spending their own.
Sure enough, when the SmartPay program was first implemented, Federal departments and agencies did not take near the care that a private business would when handing out company charge cards. When I started looking into this with the GAO, we uncovered blatant examples of wasteful spending. Government employees were using their government-issued charge cards to bypass any authorization and approval procedures and purchase items that had nothing to with their official duties. We are talking about LA-Z-Boy reclining chairs, kitchen appliances, and even a sapphire ring being paid for with government purchase cards, and with the American taxpayer paying the bill no questions asked.
Government travel cards have been used for gambling, sporting events, concerts, cruises, and even gentlemen's clubs and legalized brothels. While travel cards are not paid directly with taxpayers' money like purchase cards, failure by employees to repay these cards results in the loss of millions of dollars in rebates to the Federal Government. Also, when credit card companies are forced to charge off bad debt, they raise interest rates and fees on everyone else.
A series of GAO reports over the last decade have identified an inadequate and inconsistent control environment across numerous Federal agencies with respect to both government purchase cards and government travel cards. This has led to millions of dollars in taxpayers' money wasted. In some cases purchases were outright fraudulent, and others were of questionable need or were unnecessarily expensive. In each report it has issued, the GAO has made recommendations about what kind of controls need to be implemented to prevent such abuses from occurring in the future. In many cases, the same controls were often missing or inadequate, and therefore the same recommendations are repeated in report after report. One agency would promise to clean up its act, but then we would find the exact same problems with another. That is why I worked to develop legislation that would incorporate GAO's recommendations regarding some of the most basic controls needed in every agency to prevent abuse of government charge cards.
As a result of the pressure applied by the relentless oversight of Congress, the GAO, and agency Inspectors General, we have seen some progress toward establishing a better control environment. In fact, the Office of Management and Budget has issued to Federal agencies a circular that seeks to bring about many of the controls we identified. However, this progress would not have been possible without the continual spotlight being shone on the problem and the threat of congressional action.
In addition to requiring the most important internal controls across the government, the bill requires all Federal agencies to establish penalties for violations, including dismissal when circumstances warrant. This is necessary not only so that taxpayers know that those who would squander their money are held accountable, but also to send a message to other government employees that such behavior will not be tolerated. The bill also increases oversight by providing that each agency Inspector General periodically conduct risk assessments and audits to identify fraud and improper use of government charge cards. We have had great success working with Inspectors General using techniques like data mining to reveal instances of improper use of government charge cards. Having this information on an ongoing basis will help maintain and strengthen a rigorous system of internal controls to prevent future instances of waste, fraud, and abuse with government charge cards.
This legislation has been revised a number of times with considerable input from the GAO as well as the Inspector General community and other stakeholders. In crafting the very carefully thought out bill before us today, I have appreciated the help and support provided by Chairman LIEBERMAN and Ranking Member COLLINS, who have again joined me as original cosponsors of this bill. The version I have introduced today is the same bill that passed the Senate in the last Congress and I look forward to seeing it pass both houses of Congress and enacted into law in the very near future. That day, the American taxpayers will be able to rest just a little easier knowing that at least one avenue to potentially waste their hard earned money has been blocked.
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