U.S. investigates luxury spending by workers at Veterans Affairs

Agency staff charged $2.6B last year to their government credit cards.

WASHINGTON (AP) — Veterans Affairs employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers, and government auditors are investigating, citing past spending abuses.

All told, VA staff charged $2.6 billion to their government credit cards.

The Associated Press, through a Freedom of Information request, obtained the VA list of 3.1 million purchases made in the 2007 budget year. The list offers a detailed look into the everyday spending at the government’s second-largest department.

By and large, it reveals few outward signs of questionable spending, with hundreds of purchases at prosthetic, orthopedic and other medical supply stores.

But there are multiple charges that have caught the eye of government investigators.

At least 13 purchases totaling $8,471 were charged at Sharper Image, a specialty store featuring high-tech electronics and gizmos such as robotic barking dogs. In addition, 19 charges worth $1,999.56 were made at Franklin Covey, which sells leather totes and planners geared toward corporate executives.

Government reports in 2004 said these two companies, by virtue of the types of products they market, would “more likely be selling unauthorized or personal use items” to federal employees.

Many of the 14,000 VA employees with credit cards, who work at headquarters in Washington and at medical centers around the nation, also spent tens of thousands of dollars at Wyndham hotels in places such as San Diego, Orlando, Fla., and on the riverfront in Little Rock, Ark. One-time charges ranged up to $8,000.

On at least six occasions, employees based at VA headquarters made credit card charges at Las Vegas casino hotels totaling $26,198.

VA spokesman Matt Smith the department was reviewing these and other purchases as part of its routine oversight of employee spending. He noted that many of the purchases at Sharper Image and other stores included clocks for low-vision veterans, humidifiers, air purifiers, alarm devices and basic planner products.

Smith said all the casino hotel expenditures in 2007 were for conferences and related expenses. He said the spending was justified because Las Vegas is a place where “VA is building a new medical center and an increasing number of veterans are calling home.”

“The Department of Veterans Affairs, like many public and private groups, hosts conferences and meetings in Las Vegas due to the ease of participant travel, the capacity of the facilities, and the overall cost associated with hosting a conference,” he said.

According to VA policy, purchase cards may be used at hotels to rent conference rooms or obtain audiovisual equipment or other items for VA meetings. They should not be used to reserve lodging. Auditors long have urged the VA to adopt policies to encourage use of free conference rooms. Auditors previously faulted the agency for booking rooms at expensive casino hotels without evidence it first had sought free space.

In the coming weeks, auditors at the Government Accountability Office and the VA inspector general’s office are to issue reports on purchase card use and spending controls at the VA and other agencies. The reports are expected to show lingering problems at the VA, which auditors cited in 2004 for lax spending controls that wasted up to $1.1 million.

The list of charges provided to the AP gives the vendor, amount purchased, location and employee name; in most cases it does not indicate the specific item purchased. Requests by the AP for lists of the additional data in a timely manner were repeatedly declined on privacy and proprietary grounds.

The VA list shows that some credit-card holders took a modest route. One VA headquarters employee appears to have passed up casino hotels by booking at a Holiday Inn Express in Las Vegas for $787.75.

Penalties for misuse of government credit cards range from suspension of the credit card to a reprimand and disciplinary action. Employees may be criminally prosecuted for fraud. More serious cases in recent years involved purchases of computers, televisions, DVD players and other items that were then sold to friends or kept for personal use.

Congressional leaders said the expenditures were troubling.

Rep. Harry Mitchell, chairman of the House Veterans’ Affairs subcommittee on oversight, said he would question VA officials about the purchases at a hearing set for July. Mitchell, D-Ariz., said he feared there may be “a growing culture of wasteful spending at the VA.”

He noted that former VA Secretary Jim Nicholson had awarded more than $3.8 million in bonus payments to senior officials despite their roles in crafting a flawed budget that fell $1 billion short.