In the last six months, the US government has taken strong steps to curb widespread misuse of federal credit cards an embarrassment that has left the Bank of America Corporation with over $60 million in unpaid credit card debt from US military personnel alone. According to the Office of Management and Budget (OMB), in May 2002 the government had 384,000 and 2.2 million purchase and travel cards, respectively. Fraudulent charges included among event tickets, electronics, and jewelry goods and services at strip clubs, brothels, and pornography websites, reported the Associated Press. Such spending is particularly disturbing given that last month, a report from the International Organization for Migration (IOM) indicated that spending on sexual services by US servicemen accounted for the trafficking of more than 5,000 women into South Korea since the mid 1990s.
Since May, various federal departments, including the Department of Defense (DoD), the Department of Education (DoEd), and the Department of Housing and Urban Development (HUD) have canceled federal credit card accounts (the DoD by as much as 20 percent), blocked type-specific transactions, and collected unpaid charges through payroll deductions.
The magnitude of government card abuse reported last May by the General Accounting Office (GAO), sparked Congress to insert language in the 2003 Department of Defense Appropriations Act limiting the number of government cards and requiring credit checks on all individuals considered. The bill (H.R. 5010) passed both chambers of Congress and was presented to President Bush last week.
White House budget director Mitchell Daniels said progress is being made. Delinquent accounts have dropped from 13% to 7% from January to July. Unpaid travel balances have declined from $389,000 to $15,000 during the last year, and the DoD is cutting 400,000 travel cards by November. “I’m far from satisfiedÉ You need more than a few public hangings, you need genuine changes in procedures. We’re focused intently on reduction of temptation as well as pursuit of past misdeeds,” Daniels told the Associated Press.