AP Report on VA Waste Reflects Misplaced Priorities

The Associated Press's out-of-whack news priorities and seemingly boundless determination to distort never cease to amaze. Hope Yen's Sunday report on VA credit-card charges is yet more evidence that the wire service has lost its way.

The beginning of Yen's report is so typical, and so misleading:

Investigators Review VA Credit Charges

WASHINGTON (AP) — Veterans Affairs employees last year racked up hundreds of thousands of dollars in government credit-card bills at casino and luxury hotels, movie theaters and high-end retailers such as Sharper Image and Franklin Covey — and government auditors are investigating, citing past spending abuses.

All told, VA staff charged $2.6 billion to their government credit cards.

Yen must "hope" that disgusted readers will stop there, because, thanks to "clever" writing, many readers will believe that $2.6 billion in spending is under investigation, and that the "hundreds of thousands" represents the small tip of a very big iceberg.

Uh, not exactly.

Four paragraphs later, Yen cites some of the less-than-large specifics (bold is mine):

The Associated Press, through a Freedom of Information request, obtained the VA list of 3.1 million purchases made in the 2007 budget year. The list offers a detailed look into the everyday spending at the government's second largest department.

By and large, it reveals few outward signs of questionable spending, with hundreds of purchases at prosthetic, orthopedic and other medical supply stores.

But there are multiple charges that have caught the eye of government investigators.

At least 13 purchases totaling $8,471 were charged at Sharper Image, a specialty store featuring high-tech electronics and gizmos such as robotic barking dogs. In addition, 19 charges worth $1,999.56 were made at Franklin Covey, which sells leather totes and planners geared toward corporate executives.

..... Many of the 14,000 VA employees with credit cards, who work at headquarters in Washington and at medical centers around the nation, also spent tens of thousands of dollars at Wyndham hotels in places such as San Diego, Orlando, Fla., and on the riverfront in Little Rock, Ark. One-time charges ranged up to $8,000.

On at least six occasions, employees based at VA headquarters made credit card charges at Las Vegas casino hotels totaling $26,198.

Note the gratuitous addition of the word "casino" (Vegas hotels have casinos? Who knew?). Yet Yen makes no assertion that gambling was done on VA cards -- probably because she can't, which is shown two paragraphs later (not excerpted).

Even later, the total dollar amount involved when the auditors are done with their work seems likely to be quite a bit less than overwhelming:

In the coming weeks, auditors at the Government Accountability Office and the VA inspector general's office are to issue reports on purchase card use and spending controls at the VA and other agencies. The reports are expected to show lingering problems at the VA, which auditors cited in 2004 for lax spending controls that wasted up to $1.1 million.

Yen gives no indication as to why we should think the level of waste is any worse now than three years earlier. If the total amount charged to cards in 2004 was about the same as 2007, the level of waste at that time was just over 0.4%.

For a government agency, that would be a taxpayer's dream come true.

Don't get me wrong. I want costs controlled, government employees to be frugal with tax dollars, and those who engage in unauthorized and/or frivolous spending disciplined, up to and including getting unceremoniously canned.

But how about some perspective? AP is wasting precious newsprint and burning gigabytes of bandwidth over a truly trivial amount of money.

Meanwhile, Medicare and Medicaid programs are hemorrhaging billions to waste, fraud, and abuse annually. The fraud estimate at this MSNBC article is $60 billion, just in Medicare. If correct, that $60 billion is over 54,000 times as large as the $1.1 million in waste at VA reported by Yen as having occurred in 2004.

More important, that $60 billion would represent roughly 14% of the $432 billion spent on Medicare in 2007 (scroll about 1/3 of the way down the Social Security Trustee's Report Summary -- the second line item listed as "Income during 2007" is really the amount spent. Medicare-related items are $203.1 billion for Hospital Insurance [HI] and $228.5 billion for Supplemental Medical Insurance [SMI]).

That 14% rate is about 35 times higher (.14 divided by .004) than that estimated to be occurring with VA card charges.

You really have to wonder about the reporting priorities of a news organization that will throw so much of its resources and a 1,400-word article at such a minor amount of spending. Proportional treatment of Medicare fraud based on the amount spent by Medicare would require almost 233,000 words (1,400 times 432 divided by 2.6); you'd better start typing now, Hope.

Subscribing newspapers and others should be wondering how much of what they pay for AP's news is itself misdirected.

Cross-posted at BizzyBlog.com.

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