DOJ report: U.S. Marshals Service spent excessively on novelty items The United States Marshals Service (USMS) has been spending far too much on "swag," according to a report recently released report by the Department of Justice (DOJ) Inspector General. After receiving an anonymous tip, the DOJ conducted an audit that found that the USMS "spent at least $793,118 on promotional items during fiscal years 2005 to 2010 and that these expenditures were excessive." This image shows a challenge coin of the United States Marshals Service. / Northwest Territorial Mint Expenses on novelty items and gifts for the USMS went from $29,138.62 in 2005, to $313,193.46 in 2010, a 975 percent increase. The prices of certain items skyrocketed. Promotional pens cost the USMS $53 in 2005; by 2010, the cost had risen to over $29,000. Spending on key chains rose from $513 to $7,218 in the same period. Included among the other items are neckties, patches, scarves, bags, and retirements gifts like crystal statues and lamb wool blankets. "At a budgetary time that agencies should be searching the couch cushions for spare change, the Marshals Service spending nearly $800,000 on swag is outrageous," says Stephen Ellis, Vice President of Taxpayers for Common Sense. "It's important to promote the agency and inter-agency cooperation," says Ellis, who served in the Coast Guard, "but that's done through hard work, not trinkets and baubles." The biggest of these expenditures were "challenge coins," or small badges that show the insignia of the law enforcement and military divisions that carry them. In the six-year period examined in the report, over $155,000 were spent on challenge coins. This image shows a challenge coin of the Pentagon Force Protection Agency. Exchanging challenge coins is common practice between different departments of law enforcement and the military. Witnesses told the DOJ Inspector General's office that trading coins built "diplomacy," "pride" and "goodwill." Investigators were told that "obtaining the cooperation and assistance of local community leaders, law enforcement agencies, and others is of paramount importance to the functioning of the USMS and that the ability to give challenge coins or other promotional items to individuals was valuable to that effort." But the Inspector General's office was "skeptical of the justifications provided," saying that eliminating the practice wouldn't hurt cooperation between departments of law enforcement. "When you look at building morale, coins might seem frivolous, but they're really not," says Ross Herman, the CEO and founder of Northwest Territorial Mint, the largest domestic manufacturer of challenge coins and military insignia. Challenge coins particularly have a long tradition and history in the military and with law enforcement, and according to Hansen, are considered a privileged badge of membership often given out by commanding officers. "You walk into a bar, you take out your challenge coin, you slap it on the bar, and it's bragging rights," says Hansen, "A guy says 'I make the challenge', everybody in the unit better have their coin or they're buying the drinks.'" In January 2011, U.S. Attorney General Eric Holder ordered that all DOJ spending be reduced to "mission-essential" expenditures. The DOJ Inspector General's report goes further, recommending that "internal controls" be set up to prevent spending from getting out of control again. A Marshals Service spokesman told CBS News the agency has concurred with all of the recommendations in the report. Since Stacia Hylton was appointed as director of the USMS in 2011, there has been a moratorium on promotional spending. Costs of ceremonial items and promotional materials were down as low as $221 in 2012.