Pentagon Credit Card Expenses: Strip Club And Casino Costs Charged By Defense Department Staffers On Government Cards, Audit Shows

WASHINGTON -- Department of Defense employees spent hundreds of thousands of dollars at casinos and “adult entertainment establishments” in a year, according to an audit of government credit card statements released Tuesday. The report found that in one year, 4,437 transactions totaling $952,258 were personal expenses incurred at casinos and another 900 charges totaling $96,576 were made at strip clubs.

For example, the audit found a senior airman stationed at Seymour Johnson Air Force Base in North Carolina used his card while traveling on official business to Nellis Air Force Base near Las Vegas. He was allotted $359.25 to pay for food and similar expenses while there. Instead, he charged $4,686 on his card for three purchases at Sapphire Gentlemen’s Club, a Las Vega strip club. He attempted another charge of $920 but it was declined because the card had reached his limit. He later admitted the charges were for himself and several friends who visited the club’s VIP room.

Sen. Chuck Grassley, who authored the law requiring the audit, said more controls need to be implemented to catch these types of charges when they are made. He said a sustained process for keeping track of charges on government-issued travel cards is needed.

“The report makes clear that the Defense Department had not properly implemented some aspects of my legislation, specifically the requirement for ‘each executive agency to use effective systems, techniques, and technologies to prevent or identify improper purchases,’” Grassley said in a statement. “This audit was an important part of the process in holding executive agencies accountable for implementing a robust system of controls and oversight of government charge cards, as called for in my law.”

The audit looked at charges by Department of Defense employees between July 1, 2013 and June 30, 2014. During that time, 20 million travel card transactions were completed that totaled $3.4 billion in charges. There were 1,682,423 cards issued when the audit period began.

The report zeroed in on seven individuals who were found to have an excessive number of charges on their card related to casinos or adult entertainment facilities.

A civilian employed with the Defense Logistics Agency used his government-issued card 29 times between October 2012 and September 2014 to obtain almost $5,000 in cash while he wasn’t traveling on business. Of those charges, 19 were at Maryland Live! Casino in Hanover, Maryland, one of the closest gambling facilities to the nation’s capital. Attempts to withdraw another $402 at the casino were declined.

The report also identified an Army Reserve sergeant first class who repeatedly used his government card while not traveling for work at the Pechanga Resort and Casino in Temecula, California -- only 8.6 miles from his home. Between March 2011 and October 2014, the sergeant had 83 transactions at the casino that totaled $16,415.

A Navy petty officer who was sent to El Paso, Texas, for 17 days on business used his card at four different strip clubs -- Dreams Cabaret, Jaguars Gold Club, Tequila Sunrise and Red Parrot Gentlemen’s Club. His meals were provided, so he was only allowed to spend $151.50 on his government card while there. Instead, he rang up 12 transactions totaling $1,116. He charged another $642 at nonadult establishments buying food and drink and withdrawing cash -- exceeding his allotted expenses by more than $1,600.

The report found that the charges were allowed to remain on the cards -- instead of requiring the user of the card to pay for them as personal charges -- because not enough checks were in place. “DoD policy did not specifically identify high-risk merchants or categories for personal use such as casinos or adult entertainment establishments,” the report found. It's not clear whether the charges ultimately came out of taxpayers' pockets or the individuals involved paid the bills.