Waste, fraud and personal use

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Would you believe skilled, very professional auditors cannot account for $25 billion in taxpayer money spent by persons unknown, somewhere unknown on unknown items?

You will find this unsolved mystery in the Treasury Department's 2003 Financial Report of the United States Government in a section titled "Unreconciled Transactions Affecting the Change in Net Position." The Justice Department could have been funded an entire year with this $25 billion.

In a Heritage Foundation report, Brian M. Riedl, a Heritage fellow, came up with revelations of waste, fraud and abuse that should shock and startle even the most hardened challenger of government expenditure practices. To express an obvious truth, a private corporation run like the federal government would be seeking bankruptcy protection. The Heritage Foundation should be congratulated for this study, one Congress should have done but never would.

Here are examples of government waste I found almost incredible:

(1) Purchased and unused airline flight tickets, totaling $100 million. Between 1997 and 2003, according to an audit, the Defense Department bought and then did not use about 270,000 commercial airline tickets. These were fully refundable tickets, but the Pentagon never exercised that privilege on behalf of American taxpayers.

(2) Between 2001 and 2002 auditors found 27,000 transactions in which -- you won't believe this -- the Pentagon paid twice for the same ticket. The department would purchase the ticket directly and then inexplicably reimburse the employee for the ticket cost. One employee put in a claim for seven nonexistent airline tickets and professed not to have noticed $9,700 was deposited to his bank account. Another example of your tax dollars at work.

(3) A supposed money-saver -- giving 55,000 Agriculture Department employees credit cards to acquire basic supplies and avoid a lengthy procurement process -- became a glorious opportunity for some employees to buy bebop concert tickets, tattoos, lingerie, bartender school tuition, car payments and cash advances. Cost to taxpayers: $5.8 million. A private-sector employee who took advantage of a company credit card would be fired. In the federal bureaucracy, he is promoted.

(4) Credit card abuse at the Defense Department over an 18-month period included entertainment admissions, covering gambling debts, pleasure cruises and -- really, this is too much -- $73,950 for exotic dance clubs and prostitutes.

(5) In 2002, the Education Department received an application to certify the student loan participation of the Y'Hica Institute in London. The department approved the application and soon disbursed $55,000 in student loan applications. All the documents were faked. It was a sting operation set up by congressional investigators to test Education Department verification procedures.

(6) Medicare wastes more money than any other federal program. It pays up to eightfold what other federal agencies pay for the same drugs and medical supplies. Medicare paid, for example, $8.26 per liter for saline solution compared to $1.02 by the Veterans Administration for the same product. Medicare also overpays for drugs. The Heritage study shows Medicare reform could save taxpayers and beneficiaries between $20 billion and $30 billion annually without benefit reductions.

(7) One of the worst offenders against the American taxpayer is the Army Corps of Engineers, which spends $5 billion annually in dam construction and other projects. The Army Corps, says the Heritage study, "has repeatedly been accused of deliberately manipulating its economic studies to justify unworthy projects."

In an era of trillion dollars budgets, you would think Congress would try to stop to profligate spending, no? Fuggedit.

Arnold Beichman, a Hoover Institution research fellow, is a columnist for The Washington Times. His updated biography "Herman Wouk, the Novelist as Social Historian," has just been published.