Taxes & Spending

532 Bottles of (Tax-Funded) Beer on Wall

An old monotonous song celebrates drinking 99 bottles of beer. But officials at the U.S. Coast Guard Academy did better than that. Between last August and March, they brewed and consumed 532 bottles—courtesy of U.S. taxpayers.

Swilling ale is an ancient seafarers’ tradition. But did the Coast Guard really need a tax-funded microbrewery?

The brewery was made possible by a government charge card issued to an academy official responsible for “organizing social functions.” According to congressional testimony published last month by the Government Accountability Office, the official used the card to purchase a beer brewing kit and some ingredients and then “wasted government resources by brewing alcohol while on duty.”

When GAO auditors looking into the use of charge cards at the Department of Homeland Security (DHS) discovered the purchase, Coast Guard officials were defiant. The brewing equipment, they said, according to GAO’s testimony, “provided the Academy with both cost savings and a quality product for official parties attended by cadets, dignitaries, and other guests of the Superintendent.”

Bottles of their brew came with special custom-made labels, the Coast Guard boasted, and were an effective “ice-breaker” at parties.

The auditors did not dispute that the beer was an “ice-breaker.” They were dubious, however, that the Coast Guard saved money by brewing its own (even though the academy purchased additional beer-making ingredients with non-governmental funds).

A six pack of the Coast Guard’s brew, GAO calculated, cost more than $13 to make.

After GAO’s sobering testimony, the New York Post revealed that the pricey beer was brewed under the direction of Adm. James Van Sice, Coast Guard Academy superintendent, whose own visage was stamped on the label of a libation called “The Admiral Amber Ale.”

The Post dubbed Van Sice “Admiral Brewski.” Within days, the academy announced he would be reimbursing the government $227 for the brewing kit.

But Admiral Brewski’s microbrewery was just a drop in the ocean of abuse GAO has discovered in the use of government charge cards.

GAO’s July testimony also revealed, for example, that officials at the Federal Emergency Management Agency (FEMA) used charge cards to purchase 200 laptop computers at a cost of $300,000, for use in relief work in the wake of Hurricane Katrina. FEMA, however, did not properly record where the computers went.

When GAO auditors went looking for them in Louisiana, FEMA officials said the laptops had been shipped directly to a conference room at a New Orleans hotel that was being used as a command post. Investigators found the room empty.

FEMA eventually tracked down only 93 of the 200 computers. GAO classified it as a case of “potentially fraudulent activity.”

DHS has armed about 9,000 bureaucrats with charge cards like those used to buy the computers. In fiscal 2005, these bureaucrats charged $420 million to the taxpayers. So, how widespread was fraud and abuse?

GAO doesn’t know. “Our forensic audit and investigative work identified numerous transactions where DHS failed to prevent or detect potential fraudulent, improper, abusive or questionable purchases,” said GAO’s testimony. “However, our work was not designed to identify all instances of, or estimate the full extent of fraud, waste and abuse.”

“A weak control environment and breakdown in key controls exposed DHS to fraud and abuse in its use of the purchase card,” GAO concluded.

This is not a new conclusion by GAO, nor unique to DHS. I first wrote about the government’s charge-cards-for-bureaucrats program in 2004 after GAO submitted testimony to Congress that said: “We and Inspectors General across the government found ineffective management oversight and internal control over purchase card use. A weak overall control environment and substantial breakdowns in internal control left agencies vulnerable to fraudulent, improper, and abusive charges.”

President Clinton started the charge-cards-for-bureaucrats program in 1994, when he signed the Federal Acquisition Streamlining Act and issued an accompanying order expanding the number of federal employees eligible for cards. Prior to that only specific procurement officials had them. In 1994, federal employees spent $1 billion on government charge cards. By 2003, 325,000 federal employees carried the cards and used them to spend $16.4 billion.

Clinton made it easier for bureaucrats to spend. So now they spend more of our money.

Congress and President Bush should make it harder for bureaucrats to spend by cancelling the charge card program. Perhaps the cards can be piled up in front of the Treasury and burned.

Admiral Brewski could be invited to torch the pile, and toast the taxpayers with any brew he pays for himself.

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