Pentagon waste: $1M spent at strip clubs, casinos

One Navy petty officer managed to spend six times his allotted per diem at strip clubs using his official government travel charge card, according to a new Pentagon audit Tuesday that found Defense Department employees made more than $1 million in bogus charges at strip clubs and casinos in just one year.

The Air Force had the most transactions, accounting for nearly half of the money spent in the questionable establishments, the Pentagon’s inspector general said.

Sometimes the money was spent even though the employees weren’t traveling at the time — which should have been a sure red flag. But investigators said the Defense Department didn’t spot the bogus expenses, and doesn’t have programs in place to look out for charges at “high-risk merchants” or to scour expense reports for personal use charges.

One Defense Logistics Agency civilian employee used his travel charge card 19 times to take out more than $3,000 in cash at the Maryland Live! Casino in Hanover, Maryland. Another three attempts were rejected.

That employee was punished, the investigators said, though they didn’t specify what happened.

Meanwhile, a Navy petty officer first class used his charge card at four El Paso, Texas, strip clubs — Dreams Cabaret, Jaguars Gold Club, Tequila Sunrise and Red Parrot Gentleman’s Club — during one official trip, and managed to charge more than six times his allotted meals and incidentals per diem.

Investigators singled out other cases for investigation and found employees were making cash withdrawals above their allotted daily allowance for meals and incidentals.

But the Pentagon didn’t have any way of spotting the overdrafts.

The bogus spending was a small fraction of total travel card spending at the department, which reached $3.4 billion for the year studied — July 1, 2013, through June 30, 2014.

“Having a government charge card is holding the public’s trust. The government ought to ensure that the public’s trust is upheld. It looks as if we’re making progress in achieving this goal,” said Sen. Charles E. Grassley, the Iowa Republican who called for stricter controls of government charge cards as part of a 2012 law.

In its official response, the Defense Department insisted its checks are “very strong” and said the amount of abuse “is negligible when compared to the size and scope of the program.”