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Debunking American Exceptionalism Part II: Fraud, Waste and Abuse in Government

Fraud, Waste, and Abuse Endemic in our System of Government

Last week I began a series of blogs debunking American Exceptionalism by focusing on the spreading violence in our schools, workplaces, shopping malls, and other venues.Two weeks  ago I blogged about the ethics of Obamacare and pointed out the program, like Medicare, is ripe for fraud. Estimates of Medicare fraud have ranged all the way up to $60 billion.

Fraud has occurred in many government programs and what’s worse, it has occurred in government agencies as well. Thus, the issue I deal with today is to link the growing fraud and abuse in government to the decline of “American Exceptionalism.”

The most recent example of fraud, abuse, and waste in government (misuse of the public’s resources) was disclosed last week when employees from six Homeland Security Department offices were signaled out for abusing an overtime program and costing the government about $8.7 million a year, according an Office of Special Counsel letter and report sent on October 30 to President Obama and Congress.

Special Counsel Carolyn Lerner told President Obama and lawmakers that whistle-blowers alerted her office to the abuses. Lerner's letter and an accompanying report detailed allegations of overtime abuses in Washington. She said her office is investigating five other overtime abuse cases and expects the allegations to be substantiated.

According to one whistle-blower, some Customs and Border Protection employees assigned to the commissioner's situation room at its headquarters in Washington were paid about two hours of overtime nearly every day but spent much of that time watching television, surfing the Internet or otherwise relaxing at their desks.

Then there was the IRS scandal in June of this year when it was disclosed that more than 1,000 IRS employees over a two-year period misused their government credit cards, and the agency has a tendency to be overly lenient in disciplining them according to the Treasury Inspector General for Tax Administration.

Additionally, the report claims, hundreds of IRS cardholders who had significant financial issues, including non-sufficient funds in their account, bad checks or suspended and charged-off accounts, were never re-evaluated for their security clearances. It says the agency lacks standard policies to refer employees with such issues for revaluation. IRS officials that misused their cards for fiscal years 2010 and 2011 include an executive-level official, a criminal investigator, and multiple employees with security clearances. 

The IRS had come under fire before this when it was revealed it blew through $50 million on conferences between 2010 and 2012, including spending more than $4 million on a single California conference in 2010.

Next, add the Government Services Agency to the list of government agencies that squandered taxpayer funds on lavish, personal expenses. The G.S.A., as it is known, is essentially the government’s personal shopper for big-ticket items, like buying and leasing buildings and cars. The agency spent $822,000 in taxpayer money to fly 300 bureaucrats to a luxurious spa and casino outside Las Vegas for a conference in October 2010. The conference entertainment included a clown and a mind reader.  

Heads rolled at the GSA immediately as the top official, Martha Johnson, fired her top two deputies, and then resigned in disgrace — hours before the agency’s inspector general released a blandly titled “Final Management Deficiency Report,” whose contents were anything but bland about the conference at the M Resort Spa Casino. Its details — $58,808 for “audio visual services;” a “networking reception” where the fare included “Petit Beef Wellington” and 1,000 sushi rolls at $7 apiece; $147,000 for airfare and lodging; a $75,000 “bicycle building project” designed as a “team-building exercise” — were enough to prompt people in Las Vegas to wish, as the old saying goes, that what happened there would have stayed there.

A scandal that involves the U.S. Navy that has been brewing for some time is now receiving increased media coverage because a high-ranking Navy office, Navy Commander Jose Luis Sanchez, was accused of giving classified information on ship movements to Glenn Defense Marine Asia (GDMA). In return, Francis allegedly arranged for hotel rooms and female escorts during Sanchez's time in port and used couriers to pass along cash payments. The exchange included prostitutes, luxury travel and $100,000 in cash, the latest development in an ever-widening alleged international bribery scandal.

Navy Commander Jose Luis Sanchez, 41, was arrested in Tampa, Florida last week, becoming the third Navy official to be caught up in the military's investigation into Singapore-based vessel husbandry firm Glenn Defense Marine Asia (GDMA), which provides millions of dollars-worth of port services to the Navy in ports across Asia -- and which allegedly provided a lot more to a few purportedly crooked Navy officers.

In September, the Department of Justice announced the separate arrests of Navy Commander and Captain-Select Michael Misiewicz, who was accused of driving business to GDMA in return for luxury travel, hookers and Lady Gaga tickets, and Naval Criminal Investigative Service (NCIS) Supervisory Special Agent John Beliveau II, who stands accused of tipping GDMA off to details of the Navy's investigation into the company for similar perks.

I could go on but you get the point. Our government is ripe with fraud and abuse. I didn’t even mention folks in Congress who have been caught with their hinds in the till. I could talk about fraud in business and the financial institutions that ushered in the great recession, but that is a blog for another day.

There is a culture of greed, entitlement, and arrogance in Washington that is endemic in our system of government. Our “leaders” are not leading at all; instead, they march to the party line whether or not it is in the best interests of the country.

We all pay the price of greed, fraud, waste and abuse in government. I have to wonder how much money could be brought into the Treasury if all the fraud, waste and abuse stopped.

Once again I ask the question I have posed before: How can we be an exceptional country when those charged with looking out for the public good basically look out for themselves and line their pockets with “ill-gotten gains?”

Blog posted by Steven Mintz, aka Ethics Sage, on November 11, 2013