GSA probe focuses on conference contractor

April 23, 2012

The inspector general investigating lavish spending by the General Services Administration has told federal prosecutors an outside event planner violated ethics laws while helping to organize a conference at a swank Las Vegas hotel, according to government sources.

Investigators also want to know whether Michael W. Jahn, managing partner of Location Solvers, violated bribery laws by giving gifts to several GSA employees in excess of the government’s $20 limit, according to government sources, e-mails and transcripts of interviews conducted by the inspector general’s office.

The gifts, which would have been illegal for the employees to accept, included regular deliveries of flowers, concert tickets and free hotel rooms, sources said.

Location Solvers, based in Washington, describes itself on its Web site as a “premier hotel search firm” that finds sites for meetings, conventions, retreats and guest rooms. Among the clients it lists are the Department of Homeland Security. The GSA is not included.

In 2010 the GSA hired the company to select 14 hotels as venues for conferences and other agency functions, according to a briefing that Inspector General Brian Miller gave agency leaders. One of the hotels was the M Resort and Casino in Las Vegas, where the Public Buildings Service hosted a four-day meeting in 2010 that was investigated by Miller’s office.

Jahn, 42, did not return numerous phone calls and e-mails seeking comment.

Billed as team-building for 300 employees, the 2010 Western Regions conference featured private parties, a mind-reader, a talent show, extravagant food spreads and other entertainment. The cost to taxpayers was $823,000.

Location Solvers is one of numerous vendors — including a company that provided audio-
visual services for $59,000 and one that offered a bike-building exercise for $75,000 — whose services for the Las Vegas event were not competitively bid, as federal rules require.

Asked at a congressional hearing last week if he is looking into possibly illegal relationships between vendors and conference organizers, Miller said, “We’re looking at all of those things.” He also said he is investigating possible bribery and kickbacks in the agency. Federal employees cannot solicit or accept gifts over $20 from any entity doing business with their agency, or use their position to induce someone to provide a benefit to them, their friends or relatives.

The GSA, like most federal agencies, has several full-time planners who find hotels and arrange conferences and other events. But when Lisa Daniels, a national event planner for GSA, set out in 2009 to find a Las Vegas hotel for the conference, she sought the services of Location Solvers, according to transcripts. The transcripts are of interviews with Jeffrey Neely. Neely, the senior GSA executive hosting the conference, wanted an “over the top” event that would best past conferences, the inspector general noted in a report this month.

Minutes after posting a solicitation for the conference event online, Daniels contacted Jahn, a friend with whom she had done business, to let him know, according to the transcript.

Jahn immediately telephoned the sales staff at the M Resort and said he had a lead on a government conference scheduled for October 2010, according to an investigator in the Neely transcript.

Daniels eventually signed a contract with the hotel that included catering, audio-visual services and other incidentals. Jahn was entitled to a commission of 10 percent on what the government spent, paid by the hotel.

Over several months of planning that included eight scouting and pre-planning trips to Las Vegas at a $130,000 cost to taxpayers, Jahn acted as a matchmaker between GSA and the hotel, according to government sources and e-mails. Jahn was paid a commission of $12,601.50, which was added to the conference catering bill of $146,527.

The inspector general criticized the arrangement: “The M Resort’s willingness to pay over $12,000 as a finder’s fee strongly indicates that further discounts might have been available to GSA if [the agency] had contacted the hotel directly, rather than working through Location Solvers,” Miller concluded, calling the use of an outside event planner “redundant and wasteful.”

Location Solvers’ commission was not written into the hotel contract, according to the transcripts.

Daniels, reached at her home in Fort Worth, referred calls to her attorney, Michael Ware, who had not responded to a request for comment as of yesterday evening. Daniels is one of 10 civil servants, including Neely, who have been placed on administrative leave pending further discipline.

On one pre-planning trip to Las Vegas, Neely augmented his event staff with 50 managers for a meeting of his “leadership team.” Neely told the investigator he wanted to “try on the resort for size.” The cost was $54,000.

Jahn was key to getting the 50 managers to the M Resort.

“Hi Patty” he wrote to an event planner in May 2009, according to an e-mail obtained by The Washington Post. “Do you have anymore updates on the leadership meeting?”

“I’d like to strike while things are hot with M Resort,” Jahn wrote to an event planner in May 2009, according to an e-mail obtained by The Washington Post. “Lisa returned the contract last week plus I have a couple other monster meetings with M pending. It’s a give and take — and right now I’m giving so it’s time to take . . . and when I said take I mean, ‘take your group for November with upgrades, concessions, etc . . . etc.’ ”

A month earlier, an event planner gushed to Jahn about the room he got her on a scouting trip. “Michael, I meant to email you last week to tell you about the room at the M,” she wrote. “Honestly, it was unbelievable. The living room area had this wonderful view of the strip which was especially beautiful at night. . . . It was so spacious, I hosted a get together for my staff one evening. Thank you so much for the arrangement, amazing!”

A hotel spokeswoman declined comment.

Before the first scouting trip in March 2009, Jahn e-mailed the hotel to say a GSA employee would be staying a night before the travel days for the trip and did not want to pay the $435 room price. The employee “needs a friend of a friend of the owner rate, (wink)” Jahn wrote.

According to government sources, among his other gifts to GSA staff were tickets to a Cher concert at Caesars Palace, which started at $95 and went to $250. Jahn also arranged room discounts for a GSA event planner at another Las Vegas hotel and organized a discounted birthday party there for the woman’s daughter.

“An inappropriate relationship with a hotel would be to go to the hotel and ask for favors that benefit the individuals personally,” Miller told lawmakers last week. “It’s inappropriate to negotiate with vendors for personal benefits. That would be — you’re not allowed to use your office for personal gain.”

Location Solvers was accredited with the Better Business Bureau on March 27. Since then the company has received no consumer complaints.

Staff writer Timothy R. Smith and staff researcher Lucy Shackelford contributed to this report.

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