Thursday, October 05, 2006
Katrina credit-card charges questioned
And a senator, citing past abuse, wants to know whether anyone used the cards for holiday shopping.
Many of the goods, which included $60,639 for sleeping bags and $713 for four 27-inch televisions, were bought at retail rather than cheaper volume prices following the Aug. 29 storm, according to federal records.
The spending also included $150,000 worth of Jockey underwear, six nail clippers and $3,200 for golf carts.
The Federal Emergency Management Agency says it needed some items quickly -- such as the underwear-- for evacuees in temporary shelters. Jockey International says the underwear sold at or below the company's cost.
Federal officials responding to Katrina "were not going to spend days calling all across the country and haggling prices -- the initial purchases were about saving lives," said Homeland Security Department spokesman Larry Orluskie.
The lists of purchases provided by five government agencies show nothing outrageous -- bottles of water, hundreds of maps of New Orleans and Texas, pizza dinners and lots of insect repellent. The Homeland Security Department also bought 50 automatic heart defibrillators for nearly $1.5 million for use at shelters.
The credit card bills, which are directly payable by Uncle Sam, were vulnerable for abuse in the Katrina aftermath after agencies were given the power to raise the credit limit from $15,000 to $250,000. That authority was repealed on Oct. 3.
There is a history of credit card abuse by government employees, including charges for $400 Coach briefcases, a dog and Victoria's Secret clothing.
Sen. Charles Grassley, chairman of the Finance Committee who successfully pushed for the credit limits to be lowered back to $15,000, said his office was going to make sure "hardworking Americans don't pay for government employees' Christmas shopping."
"When I began looking into this issue several years ago, we uncovered hundreds of millions of dollars of taxpayer money that was lost due to inadequate controls," said Grassley, R-Iowa. "When you've seen this kind of abuse, it's hard to justify increasing the limit on these cards."
This time, the congressional audits -- the first of which is due out early next year -- will not only focus on any abuse but on missed opportunities to get discounted rates for commonly purchased items such as office supplies and clothing, according to the Government Accountability Office, the investigative arm of Congress.
Based on prior audits, at least 10 percent of the Katrina charges -- or about $4 million -- might have been saved if the government used its leveraging power to pay lower-than-retail cost, said Greg Kutz, managing director of special investigations at GAO.
"It's one way to look at it," Kutz said, addressing the rough estimate of 10 percent spending waste while at the same time stressing the GAO's review was far from complete. "There are always some bad apples out there, trying to do things for personal gain."
Only a thorough review will tell whether spending went notably awry.
For example, was $11,078 worth of ice bought by the U.S. Forest Service at retail stores really necessary, since the government already had a $107.9 million pre-existing ice contract with IAP Worldwide Services? Some senators have charged that poor planning led to waste in the IAP contract, which is also being audited.
Danielle Brian, executive director of the watchdog group Project on Government Oversight, expressed concern with many instances of retail purchases, which included $66,632 worth of supplies from Wal- Mart for items such as scissors, white bath towels and nail clippers.
"Only time will tell where the money has been squandered which should have gone to help Katrina victims," Brian said.
In many instances, the government records showed anomalies. The Transportation Department, for example, initially reported a purchase of a $5,374 paper shredder; it later said the shredder, which was apparently designed to meet security standards, was improperly designated as a Katrina expense.
The U.S. Army Corps of Engineers lists repeated duplicate charges -- for example, the exact same charge of $1,461.42 each for "1 IP90 portable printer," "1 Laserjet 2430TN printer," "1 wireless access point" and other miscellaneous items that spokesman Scott Saunders later acknowledged were probably errors.
Auditors including Homeland Security inspector general Richard Skinner have already cited the Red Cross and FEMA for similar data- reading errors that they said reflected inadequate accounting procedures.
Robert Johnson, a spokesman for the Department of Transportation, said most federal employees are seeking to do the right thing. His agency's expenses, totaling more than $400,000, included $5,728 for boots and T-shirts with DOT logos, many of them worn by the auditors themselves in the Gulf Coast region.
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