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Investigators say military personnel used Pentagon (news - web sites) credit cards for personal spending sprees, buying everything from DVD players to jewelry to pizza and billing it all to Uncle Sam.

Think you have credit card problems? Take a look at the Pentagon.

When the Defense Department issued MasterCard and VISA cards to its civilian and military personnel, more than a few not-so-good men and women used their shiny new Pentagon plastic to go on personal spending sprees.

A Few Good DVD Players

The kinds of items fraudulently purchased in the name of national security, according to a new government report, include everything from DVD players to pizza.

The General Accounting Office, the investigative arm of Congress, spent nearly a year auditing two San Diego-based Navy units, which had given out more than 1,700 purchase cards to employees, most with credit limits of $20,000 or more.

Investigators found the units had a "significant breakdown in internal controls" that left them "vulnerable to fraudulent, improper, and abusive purchases and theft and misuse of government property," according to testimony prepared for delivery by GAO officials before the House Government Reform Subcommittee on Government Efficiency Monday.

The officials cited five card fraud cases in the San Diego area involving more than $660,000 in fraudulent or potentially fraudulent purchases.

"Items that were purchased for personal use in these cases included home improvement items from The Home Depot, numerous items from Wal-Mart, laptop computers, Palm Pilots, DVD players, an air conditioner, clothing, jewelry, and other items such as eyeglasses, pet supplies, and pizza," the statement said.

One of the fraud cases has been successfully prosecuted and four are still open.

Buy All That You Can Buy

"Proper controls for the Purchase Card Program are a priority for the Department of Defense," said Capt. Riccoh Player, a spokesman for the Pentagon. "Purchase card programs are frequently audited by the General Accounting Office and military service audit agencies … As problems are revealed, we take action to correct them."

But Player declined to specify what actions, if any, were being taken to correct the abuses documented in the GAO report, saying only that the matter was "still under review."

Sen. Chuck Grassley, R-Iowa, who requested the investigation, said heads should roll.

"We don't have enough heads rolling in the Defense Department — people are not fired," he told reporters this morning. "We have to have that sort of strict action taken by the Defense Department in order to send a clear message to anybody else that we ain't gonna put up with this anymore."

The cards issued to employees at the Space and Naval Warfare Systems Command Systems Center and the Navy Public Works Center, the two installations audited by the GAO, were used to make more than $68 million in purchases last year.

"We … found unauthorized, potentially fraudulent purchases of personal items, including cosmetics, gift certificates, and clothing at both [units]," Gregory Kurtz the director of financial management and assurance at GAO and Robert Hast, the managing director of special investigations, said in their testimony.

In addition to billing Uncle Sam for personal items, Navy personnel also used the cards to purchase equipment "at an excessive cost, or of questionable government need, or both," such as $2,500 flat panel computer monitors, $100 designer Palm Pilot carrying cases and, in one instance, a $400 Coach leather briefcase.

"It ought to be very embarrassing to the Defense Department," said Grassley, the ranking Republican on the Senate Finance Committee. "It obviously weakens their argument that more money is going to give us a stronger defense because more money that's going to fraudulent use obviously isn't going to give us one red cent [worth] of more defense."

'The Tip of An Iceberg'?

The practice of issuing purchase cards to federal agency employees was dramatically expanded in the 1990s after then-Vice President Al Gore's National Performance Review recommended their use as a way to cut the costs of buying goods and services.

"The purchase card provides a less costly and more efficient way for DoD organizations to buy goods and services directly from vendors instead of processing requests through government procurement offices," reads a Defense Department fact sheet.

According to the GAO, the Defense Department reported more than 10 million purchase card transactions valued at $5.5 billion last year.

"It could be just the tip of an iceberg," Grassley said of the fraud documented in the GAO report.

Tom Shine contributed to this report.

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Sunday July 29 04:26 PM EDT

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