GSA inspector general is investigating possible bribes, kickbacks
By Lisa Rein and Ed O’Keefe,
The inspector general for the General Services Administration said Monday that he is investigating possible bribery and kickbacks in the agency, as lawmakers accused the former GSA administrator of allowing a Las Vegas spending scandal to erode taxpayers’ trust in government.
Inspector General Brian Miller told a congressional committee scrutinizing an $823,000 Las Vegas conference that his office has asked the Justice Department to investigate “all sorts of improprieties” surrounding the 2010 event, “including bribes, including possible kickbacks.” He did not provide details.
Miller’s revelations of possible further misconduct by organizers of the four-day event, coming on the heels of a highly critical report, enraged Democrats and Republicans on the House Oversight and Government Reform Committee. The lawmakers put GSA officials on the defensive during a tense four-hour hearing, with some Republicans loudly rebuking former administrator Martha N. Johnson and her colleagues.
GOP lawmakers argued that the excessive spending proves their case for smaller government. Taxpayers picked up the tab for a mind reader, bicycles for a team-building exercise and a slew of private parties at the conference.
“There are those who believe government’s reach should be expanded,” committee Chairman Darrell Issa (R-Calif.) said in his opening statement. “What has come to light surrounding GSA’s activities should give pause to anyone who has opposed cutting government size and spending.”
But Democrats joined him in condemning the outsized tab for the conference, with Rep. Elijah E. Cummings (Md.), the committee’s ranking Democrat, calling it “indefensible” and “intolerable.”
“It’s not your money, it’s the taxpayers’ money,” Cummings scolded agency officials.
Johnson, speaking publicly for the first time since her abrupt resignation last week, called the biennial Western Regions Conference a “raucous, extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers.” Closing her testimony, she said, “I will mourn for the rest of my life the loss of my appointment.”
Seated next to her was Jeffrey Neely, the senior executive in the GSA’s Pacific Rim region who organized the event. Neely, 57, who had received a subpoena from the committee, asserted his Fifth Amendment right to not incriminate himself and left the witness table.
Neely, who earns a salary of $172,000, is one of five senior managers who have been placed on paid administrative leave pending further discipline. Several lawmakers said it galled them that the managers are still receiving their full salaries. As civil servants, they have more protections than political appointees.
Johnson’s replacement, Acting Administrator Dan Tangherlini, told lawmakers that he has canceled almost every conference scheduled for GSA employees for the rest of the fiscal year. He also sent letters last Friday to Neely, former Public Buildings Service commissioner Robert Peck and Robert Shepard, Neely’s chief of staff, demanding repayment for private parties they threw in their rooms at the M Resort Spa Casino.
Peck has been summoned to appear Tuesday at the second of four congressional hearings on the scandal.
Tangherlini also wants repayment from an audiovisual company that was given hotel rooms as part of its $59,000 contract for the conference but that Tangherlini said double-billed the government.
Asked if the GSA has a “culture” problem that led to the freewheeling spending, which included poolside entertainment by a clown and a “Red Carpet” talent show, Tangherlini replied, “We definitely have a culture problem in Region 9,” referring to the four-state Pacific Rim office. “I can’t say I know enough to say we have a culture problem” in the rest of the agency, he said.
The officials’ apologies did little to satisfy lawmakers, who were outraged that top agency officials allowed the spending to take place, then waited to take action even after the inspector general briefed them midway through his year-long investigation.
Issa and others questioned how Johnson could have signed off on a $9,000 bonus for Neely last year over the objections of a committee that reviews bonuses for members of the Senior Executive Service.
In an e-mail released by the committee, Johnson wrote “yes on a bonus,” in part because Neely had to serve as regional administrator in an acting capacity “forever and a day.” She told lawmakers Monday that the reward was for his job performance. Pressed on whether she would deny the bonus knowing what she knows today, she said she could not say.
Johnson said she received a briefing on the preliminary findings in May 2011. She decided not to launch her own investigation, “as such action would have entailed a terrific duplication of government resources.”
Johnson said she believed that Miller would quickly conclude the investigation, but “the deadline slipped repeatedly from October to November to December.” She said her office received a final report last month — 15 months after it was requested.
“I personally apologize to the American people for this entire situation,” Johnson said.
Also at Monday’s hearing, David E. Foley, a former deputy commissioner at the Public Buildings Service, repeatedly apologized for poking fun at the lavish spending during the conference’s talent show, comments that were captured on video. But Foley stressed that he was not involved with planning the event.
Most of the contracts for the conference, including for an event planner, the audiovisual company and the bike-building exercise, were not competitively bid, as federal rules require.