News
May 03 2008
NASA employees big spenders on government credit
NASA employees have used government credit cards to ring up iPods, video games and even clothes from the agency's own gift shop, while at other times using the cards in ways that sidestep competitive bidding rules, federal documents and a Chronicle review of agency records show.
The review comes at a time when Congress is considering tightening purchase card regulations across government, after a federal report last month that found widespread abuse in government credit card programs, including charges that did not follow policies to prevent waste and fraud.
Internal investigations have for years uncovered similar problems within NASA, which has long been criticized for poor financial management, even as the agency has pleaded with Congress for billions of dollars to fuel new manned missions into space.
"We should be outraged. Everybody should be," said U.S. Rep. Nick Lampson, D-Stafford, whose district includes
The Houston Chronicle analyzed 451,000 charges, totaling more than $265 million, made on NASA purchase cards between January 2004 and July 2007. The newspaper also reviewed audits, internal reports and other documents related to card use.
Among the findings:
•NASA employees have made numerous charges for seemingly personal items, including custom-engraved iPods and a Christmas tree. About $270 worth of T-shirts and hats purchased from a NASA gift shop were justified by one cardholder as "safety attire," and one former civil servant pleaded guilty to embezzlement charges last year after spending more than $157,000 on things including jewelry, electronics and an air conditioner for her home.
•When doing NASA business, most cardholders are allowed to spend only $3,000 per transaction, but many exceeded that limit by splitting more expensive purchases into smaller chunks. Some purchases were so large that they may have violated federal competitive bidding rules.
•NASA auditors have pointed out purchase card abuses in no fewer than five internal reports since 1997.
Space agency procurement officials said they are aware the purchase card program, with its massive volume of transactions, has at times fallen victim to waste and fraud.
More than 3,200 NASA employees used a purchase card at some point between 2004 and mid-2007, agency data show. Charges made on the cards are reviewed and paid directly by the government, not as reimbursements to the cardholder.
Some disciplinary action
At least 160 cases of card abuse were referred to NASA investigators during fiscal years 2007 and 2008, with 25 resulting in disciplinary action.
Bill McNally, the space agency's assistant administrator for procurement, said NASA intends to review its card policies by mid-summer in response to a recent White House memo instructing agencies to cinch up internal controls over purchase card programs.
"We are always looking at ways to improve our processes and procedures," McNally said. "Unfortunately, if people try to get around those, (abuse) can happen."
Credit card misuse is not unique to the space agency. The Government Accountability Office, Congress' investigative arm, reported last month that employees across government spent extensively on apparently personal transactions during 2005 and 2006.
Lampson, who has crusaded to increase federal funding for NASA, characterized improper spending as an affront to the majority of space agency employees and called for harsh punishments.
Lawmakers were quick to decry the waste.
"The fact that there are a few bad eggs ... doesn't mean the agency is not worthwhile," said Lampson, who sits on the space and aeronautics subcommittee that oversees NASA. "We let (violators) off. There needs to be jail time."
One of the most blatant cases of abuse occurred at
Court documents show that the employee, Elizabeth Ann Osborne, used her purchase card to ring up thousands in personal items including clothing, jewelry and electronics between 2001 and 2005.
Among other purchases, she spent $2,000 to install a new air conditioner at her
The NASA records provided to the Chronicle do not explain justifications for the purchases, or even the specific items bought. Most of the transactions were made to vendors that appear to sell legitimate business items.
Other transactions, though not necessarily inappropriate, ranged from the curious to the bizarre, including thousands spent at hunting and fishing retailers, paintball courses, pet stores, video gaming services and Web sites that sell karate gear.
At times, the records show even apparently legitimate charges have run afoul of requirements to bid high-dollar projects competitively.
Federal employees are allowed to use their cards only for what the government considers small purchases. Until September 2006, the limit was $2,500; now the cap is $3,000. Larger purchases are supposed to be shopped around to ensure taxpayers are getting the best deal.
However, the Chronicle found about 4,600 cases, totaling nearly $20 million, in which a NASA employee exceeded those limits by swiping their card multiple times for the same company on a single day.
Although most of those purchases appear to be with vendors that likely do legitimate NASA business, outside experts say that splitting charges may result in unnecessarily high bills to taxpayers.
Avoiding competitive bids?
Among the transactions questioned by NASA investigators last year were 393 charges to a graphics support vendor totaling more than $235,000 — so much money that not bidding the purchases competitively may have been illegal, documents show. NASA officials contend that purchase cards save the agency millions. By allowing approved employees to make their own small purchases without going through red tape, the agency can be more productive, McNally said. Along with card benefits such as rebates, NASA estimates it saved more than $8 million last year.
"It's not as loose as people make it out to be," said Fred Lees, a
Bill would strengthen rules
Still, studies of card use at NASA have revealed problems for more than a decade. One internal audit in 2003 recommended nine changes to the purchase card program — most of which advocated further training and reviews of cardholders but stopped short of calling for further discipline. A bill sponsored by Sen. Charles Grassley, R-Iowa, would require agencies to establish safeguards and punishments designed to prevent waste in government credit card programs. It passed through committee last month and awaits approval by the Senate.
Days after last month's Congressional report on card abuse, Lampson signed on as a co-sponsor to a companion bill in the House. Local Reps. John Culberson, Michael McCaul and Ron Paul, all Republicans, are also co-sponsoring the measure.
"We don't have adequate strengths within the (card) program to hold people accountable," Lampson said.
"That should send up a red flag," said Scott Amey, general counsel of the Project on Government Oversight, a government watchdog organization. "You have to ask: Is somebody trying to get around competitive requirements?"
A follow-up audit in 2007 found that, although those recommendations ensured cardholders were trained and their purchases reviewed, they did little to prevent them from buying inappropriate items.
STUDYING SPENDING
The Chronicle used the Freedom of Information Act to obtain and review every charge made on NASA purchase cards between 2004 and mid-2007.
• NASA's database detailed 451,000 charges made by 3,200 cardholders.
• The cards are supposed to be used to buy items and services essential to NASA's mission.
• The limit for most cardholders on a single transaction is $3,000.
chase.davis@chron.com
