When bureaucrats go wild

Free nights at the Ritz-Carlton, wine-braised short ribs, take-home swag — you could imagine all this being par for the course for an annual bash at Google, Exxon Mobil or another major corporation. When General Services Administration employees enjoyed such perks on the taxpayer’s dime, however, it became a huge scandal.

But it shouldn’t come as a surprise that some government employees have embraced the free-wheeling ways of the private sector. The business of government has become big business, as Washington has moved from providing direct services to the public to doling out private contracts.

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It’s a transformation that’s happened over many decades — one intended to streamline the government by limiting the size of the federal workforce, boosting private industry’s role and introducing innovations from the private sector. “Government should be citizen-centered, results-oriented and, wherever possible, market-based,” said George W. Bush during his 2000 presidential campaign, and he attempted to follow through in office.

But in certain pockets of the federal government, the push for private-sector efficiency has been eclipsed by a gross imitation of private-sector excess.

This month, top officials at the GSA resigned after a regional office spent more than $800,000 on a single conference in Las Vegas — an event that included the services of a mind reader and a clown. The irony of the scandal is that it came from an agency whose very purpose centers on handing out government contracts. In the process of giving out the government’s money, some GSA employees didn’t think twice about spending it on themselves.

The size of the executive branch has remained close to 2 million workers since the end of the Vietnam War, with a low of about 1.78 million in 2000 and a high of 2.25 million in 1985, according to the Office of Personnel Management. But during that same period, “the federal budget has exploded, [and] things we deliver has expanded exponentially,” says Paul Light, a professor at New York University who has written a book on the subject.

Rather than hiring more workers or using existing ones to carry out new federal activities directly — the way the government used to produce dentures for veterans, as Light recalls — Uncle Sam has instead doled out the money through the private sector. “The federal government should not compete against its citizens but rely on the commercial sector to supply products and services needed by the government,” said a directive from the Office of Budget and Management in 1966.

That has created not only a proliferation of government contractors — private-sector employees who sometimes work side by side with federal workers — but also government contracts to arrange for all that spending. Amid this transformation, the GSA has become one of the government’s most important middlemen: It’s responsible for helping other agencies buy the goods and services they need, overseeing $66 billion in annual federal spending and government property worth $500 billion. As its former chief of staff John Phelps explained in a 2006 speech, “GSA may be the biggest federal agency you never heard of.”

The GSA essentially sits on a big pile of government money that private companies bid for, putting the unassuming Bartlebys of the world in constant contact with its Gordon Gekkos.

Like other federal agencies, the GSA has been subject to past administrations’ efforts to eliminate government waste. Perhaps the biggest recent change was Bush’s 2001 directive to make government more like business through “competitive sourcing”: identifying which government activities should be performed by the private sector and to force more competition between those bidding for the government’s business.

In theory, at least, that kind of directive should have made the GSA more effective at its job. But rather than emulating the private sector’s virtues, some officials at the agency ultimately adopted some of its vices, prioritizing quid pro quo relationships and equating lavish expense with power. Combined with the GSA’s diffuse power structure — there are 11 largely autonomous regional offices — and history of mismanagement, it became the set-up for disaster.

The GSA’s previous spending scandals were directly related to its contracting responsibilities: In 2006, the agency’s former chief of staff, David Safavian, was convicted of obstruction of justice and perjury for his efforts to help purchase GSA properties for uber-lobbyist Jack Abramoff, who had accompanied him on a $150,000 golf outing. Two years later, Lurita Doan, then head of the agency, was forced out after she was accused of steering contracts to her friends and helping the Bush administration use the GSA for political gain.

Even the agency’s attempts to clean up its image have backfired: The GSA chief who just stepped down, Martha N. Johnson, was under fire by Sen. Claire McCaskill (D-Mo.) last year for blowing hundreds of thousands of dollars on a privately contracted PR campaign.

These types of problems often surface at agencies that have “things that people want,” says Earl Devaney, a former inspector general at the Interior Department. He should know: In 2008, he was the first official to reveal recent misconduct at the Minerals Management Service, where employees were found to be sleeping with oil and gas industry executives, using drugs at parties with them and accepting gifts from companies that contracted with the government.

This time, the GSA wasn’t doling out contracts for another agency but for itself. As in previous scandals, it landed in trouble not simply for spending so much on the conference; according to its inspector general, GSA officials also blithely ignored the government’s contracting rules, gave free rooms to contracted employees and helped one contractor hired for the conference spend the agency’s maximum, $75,000, for a single day’s training.

The larger concern for government reformers is how all of this wheeling and dealing may be diminishing the sense of purpose in some agencies. The real aim of contracting services is ultimately neither to make money nor to spend it, but to achieve a greater good. “It’s watering down the culture of public service,” says Light, the NYU professor.

Legislators have vowed to get to the root of the problem, with four congressional hearings scheduled for this coming week. But Light worries that the over-the-top aspects of the latest GSA scandal could overshadow the proceedings.

“We never fixed the core problems before because they’re boring,” Light says. “It’s much more fun to haul in the clown in front of the Homeland Security and Government Affairs Committee and ask, ‘So, what did you do for your $8,000?’ ”

Suzy Khimm covers economic policy reporter for The Washington Post and writes for The Post’s Wonkblog.

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