Pentagon credit cards used for gambling, escorts IG report finds military officials and civilians used government cards for ‘adult entertainment.’

A Defense Department audit has found that a number of Pentagon employees used their government credit cards to gamble and pay for “adult entertainment” — findings that are expected to lead department officials to issue stern new warnings.

The audit of “Government Travel Charge Transactions” by the Department of Defense Office of Inspector General, which is to be made public in coming weeks, found that both civilian and military employees used the credit cards at casinos and for escort services and other adult activities — in Las Vegas and Atlantic City.


A Pentagon official briefed on some of the findings stressed that the federal government did not necessarily pay the charges; holders of the cards pay their own bills and then submit receipts to be reimbursed for expenses related to their government business.

The official said that the employees may have used the government cards for gambling and escort services in order to shield the charges from spouses.

Because the review was an audit of the credit card system and not an investigation of particular individuals, the official said the likely result will be that the agencies and military branches most affected will be compelled to remind employees that the practice violates policy — and possibly the law.

A Pentagon spokeswoman acknowledged the existence of the audit but said she was not authorized to speak about it until its release later this month.

The abuses come despite a 2012 law proposed by Sen. Chuck Grassley (R-Iowa) called the Government Charge Card Abuse Prevention Act. The law required federal agencies to beef up oversight of purchases on government-issued credit cards.

Grassley said in a statement he hopes that the law is one reason why the audit was completed in the first place.

“I’m interested to see the report and find out more about what’s being done, right and wrong, at DOD to prevent abuse,” he said. “What I hope is that my reforms that became law have been implemented well and that agencies and auditors are using the reforms to catch problems.”

He added: “The law requires periodic audits by inspectors general, like this one, specifically to keep on top of charge card abuse and hold agencies accountable for implementing the required internal controls. That’s especially true with purchase cards, where taxpayer money is directly involved even more than with travel cards, but the reforms should prevent travel card abuse, too. If everything is implemented as intended, we’ll stop a lot of purchase card and travel card abuse.”

Some estimates suggest that such prohibited purchases cost the government hundreds of millions of dollars a year.

In 2008, for example, a report by the Government Accountability Office found that “abuse of government issued credit cards has been a growing challenge in recent years.”

It cited instances “where cardholders used purchase cards to subscribe to Internet dating services, buy video iPods for personal use and pay for lavish dinners that included top-shelf liquor.”

Late last year, federal auditors reported to Congress that the problem persists despite efforts to rein it in.

For example, the Department of Labor’s inspector general recently found that Job Corps employees charged nearly $100,000 to the government for haircuts, clothing and personal cellphone service. The Department of Homeland Security found that Coast Guard employees charged more than $12,000 at one California coffee shop alone. Three employees were fired and two resigned last year at the Bureau of Land Management after they charged $800,000 worth of gift cards on their government credit cards.