Politics & Policy

The Coffee’s On Us

Federal agencies spent $20 billion last year with purchasing cards that don’t require public disclosure.

The Department of Homeland Security blew at least $10,000 at a single Starbucks location in Alameda, Calif., and taxpayers footed the bill, according to a new report by Scott MacFarlane of NBC-4 Washington.

MacFarlane’s investigative report examines how the federal government spent at least $20 billion in the past year on so-called micropurchases made on government credit cards. Records of transactions less than $3,000 are not made public unless specifically requested through a Freedom of Information Act request and even then can be difficult to obtain, leaving an opening for fraud and abuse.

But misuse of government purchase cards is widespread, if a 2008 report by the Government Accountability Office is any indication. More than four in ten travel-card purchases examined could not be properly verified, the report found, further describing how taxpayers had covered inappropriate charges for Internet dating, iPods, gourmet dinners, and top-shelf booze.

MacFarlane found that in the past year, using government purchase cards, DHS had spent $30,000 in total at Starbucks locations around the country, also noting that “a series of other recent purchases, reviewed by internal government auditors, include wasteful and inappropriate purchases by government employees — including a gym membership and J.C. Penney clothing — that were not detected or stopped until after the purchase was completed.”

In response to reports of rampant waste, fraud, and abuse, Congress passed legislation in 2012 tightening up supervision of spending on government purchase cards. But MacFarlane’s reporting calls into question the effectiveness of that law, says Florida representative John Mica, chairman of the Government Operations subcommittee.

“We still have a problem that needs attention,” Mica tells National Review Online. “We have to look at it and see if we can further tighten the law and get the word out that these kinds of expenditures — hairdressing and other personal items that are prohibited — will not be tolerated.”

DHS says the $10,000 or more in purchases made at an Alameda Starbucks in one six-month period was used to provide coffee for the Coast Guard, but critics say the agency should have followed standard procurement procedures to ensure it got the best possible price.

“No one wants to deny a Coast Guard member a cup of Starbucks, but [that amount] is over the top,” says Mica.

Tom Schatz, president of Citizens against Government Waste, agreed: “They were buying for the shift. That was well known in advance. . . . There was highly likely to be less expensive coffee for a crew of more than 100, extended deployment. They know they have to stock their kitchen, and there are many options. . . . Starbucks is good, but it’s not the least expensive coffee someone could find — McDonald’s is a dollar!”

Schatz applauded MacFarlane’s investigation but said that Congress is failing in its responsibility to scrutinize such waste in the federal government. According to MacFarlane’s report, several agencies — including the Department of Veterans Affairs and the Environmental Protection Agency — declined to provide records on micropurchases.

— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum.

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