VA staff spent $2.6b on agency credit cards

Bills at casinos, posh retailers investigated

WASHINGTON - 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 such as Sharper Image and Franklin Covey, and government auditors are investigating.

Through a Freedom of Information Act request, the Associated Press obtained the agency's list of 3.1 million purchases made in the 2007 budget year. The list provides a detailed look into staff spending at the government's second-largest agency.

The agency's employees charged $2.6 billion to their government credit cards last year. By and large, the list 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 that sells high-tech electronics and gizmos such as robotic dogs. In addition, 19 charges worth $1,999.56 were made at Franklin Covey, which sells leather totes and planners for 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 Veterans Affairs 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 the Veterans Affairs headquarters made credit card charges at Las Vegas casino hotels totaling $26,198.

Matt Smith, spokesman for the agency, said Veterans Affairs was reviewing these and other purchases as part of its routine oversight of employee spending. 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, he said.

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 agency policy, purchase cards may be used at hotels to rent conference rooms or obtain audiovisual equipment or other items for meetings. They should not be used to reserve lodging.

Auditors long have urged Veterans Affairs 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 Veterans Affairs 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 Veterans Affairs, which auditors cited in 2004 for lax spending controls that wasted up to $1.1 million.

"It's all being looked at," Belinda Finn, the agency's assistant inspector general for auditing, said in a telephone interview.

Congressional leaders said the expenditures were troubling.

Representative Harry Mitchell, chairman of the House Veterans' Affairs subcommittee on oversight, said he would question Veterans Affairs officials about the purchases at a hearing set for July. Mitchell, Democrat of Arizona, said he feared there may be "a growing culture of wasteful spending at the VA."

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.