Feds gone wild? House committee probes $40 billion in government credit card spending on gambling, dating, massage parlors, spas, and more - Must Read

[mnews]

The US House Committee on Oversight and Accountability has launched an investigation into federal employee charge card spending, following a startling audit revealing that government bureaucrats maintain approximately 4.6 million active charge card accounts, racking up $40 billion in spending in the last fiscal year alone.

The probe follows a report released this month by the Department of Government Efficiency (DOGE), which has already deactivated over 500,000 unused or unnecessary federal charge accounts. The DOGE findings raised red flags about potential abuse, waste, and fraud, especially within the Department of Defense.

Among the most disturbing revelations: more than 11,000 transactions at “known high-risk merchants,” including casinos, bars, nightclubs, massage parlors, and adult entertainment venues.

The Oversight Committee Chairman Rep. James Comer of Kentucky, along with Senate DOGE Caucus Chair Sen. Joni Ernst of Iowa has called for a comprehensive government-wide review of federal charge card usage. In a detailed letter to Comptroller General Gene Dodaro of the Government Accountability Office (GAO), the lawmakers demanded answers and reforms.

“With tens of billions in taxpayer funds at stake each year, a comprehensive assessment is urgently needed to identify systemic risks, eliminate inefficiencies, and restore accountability,” the letter reads.

The audit from DOGE cited a January 2025 Department of Defense Inspector General report that found 7,805 transactions at high-risk businesses such as casino ATMs and mobile app stores, and 3,246 purchases at bars and nightclubs during holidays or major sporting events.

The GAO has previously flagged similar issues, including a lack of oversight tools, poor data analysis to detect fraud, and unclear criteria for card issuance.

Defense officials in charge of purchasing who were interviewed by GAO were unable to provide examples of how they analyze card spending to identify cost savings or detect misuse.

The lawmakers have asked GAO to examine transaction data across a sweeping array of Merchant Category Codes tied to questionable spending, including:

• Adult entertainment and gambling (MCC 7841, 7995, 9754)
• Online dating services (MCC 7273, 7277)
• Luxury and non-essential items like fur shops, wig stores, and jewelry (MCCs 5681, 5698, 5094)
• Cannabis and vaping products (MCCs 8398, 5993)
• Massage parlors and beauty spas (MCCs 7297, 7298)
• Cruise lines and timeshares (MCCs 4411, 7012)
• Weight loss products, babysitting services, and horoscopes (MCCs 5499, 7295, 7999)

Comer and Ernst are seeking answers to 12 key areas of concern, including:

• How agencies determine which employees receive charge cards
• Monitoring controls and enforcement actions for misuse
• Frequency of high-risk transactions
• Use of anti-fraud systems such as Visa’s IntelliLink
• Amount spent on late fees and inactive card management
• Best practices from agencies with effective card controls

The Oversight Committee’s request builds on two decades of reports from GAO highlighting persistent problems in the federal charge card system, dating back as far as 2003.

The Government Accountability Office has not yet issued a timeline for the review.