The heads of the two largest divisions within the General Services Administrations Washington regional office are to be transferred today as part of a continuing shake-up of the scandal-plagued agency, informed sources said yesterday.
The two named were James F. Steele, regional commissioner of GSA's public buildings service, and Jerald Sternburg, regional commissioner of the federal supply service, who were to be informed today of their new assignments by Walter V. Kallaur.
Kallaur, a former Carter aide, was named only yesterday as the new head of the regional office, replacing John F. Galuardi in the first of the expected flurry of transfers prompted by the ongoing federal investigations.
The Washington regional office provides government workers with office supplies and equipment in the District, Maryland, Virginia, West Virginia, Pennsylvania, and Delaware. It spends about $1 billion a year, administers about 40 per cent of the government's office space and employs 10,000 people.
The two divisions headed by Steele and Sternburg have been the primary focus of Justice Department investigations. Those probes have found that GSA employes certified that goods or services were received when in fact they were not. In return, sources say, the employes received cash payoffs totaling in the millions of dollars from the firms that were paid for nonexistent merchandise or maintenance work.
Kallaur was named by GSA administrator Jay Solomon to replace Galuardi because of Solomon's feeling that Galuardi had not dealt firmly enough with the corruption allegations.
Kallaur would neither confirm nor deny the identity of the individuals expected to be transferred. But he said those who were being reassigned were not implicated in any wrongdoing. Rather, he said, the changes were needed to bring new leadership to the regional office.
Under Sternburg's direction, managers of GSA supply centers, which are known as "self-service stores" and provide government employes with such things as paperclips and pencils, were in fact given awards for having dispensed more goods, rather than economizing.
In explaining that policy, Sternburg was quoted in a May 2 Washington Post story as saying: "We wanted to create a feeling of belonging on the part of the store manager."
Sternburg, who earns $45,819 a year, could not be reached for comment on his expected transfer.
Steele, who earns $40,995 said, "I think it's a hell of a thing when a government official becomes the victim of persecution for finding corruption: I'm being persecuted for having started the whole thing."
Robert Lowry, a Hyattsville painting contractor, alleged widespread corruption in GSA's buildings maintenance program in letters addressed to Steele, Galuardi, and other GSA officials in 1976. The letters were referred to the FBI which could not find any abuses.
Investigators trace the current probes to a finding a year later by Lillian Gieseking, a supervisor in the accounts payable section of the regional office. She found that a clerk who was not supposed to be approving bills for payment was doing so.A check revealed that several companies whose bills the clerk had approved did not exist.
Steele and Galuardi have said that they had assigned accountants to begin looking into possible fraud in the buildings maintenance area at least a week prior to Gieseking's discovery. Asked the identities of the accountants supposedly so assigned, Steele said yesterday he could not recall.
As part of the management changes, Solomon is moving to reinstate three GSA "whistleblowers" who were either fired or demoted after bringing abuses to the attention of the press or refusing to follow orders they considered illegal.