"Nobody believes anyone will be indicted," the General Services Administration supply store manager said of himself and the dozens of other GSA employes who have become targets of the federal investigation of widespread corruption in GSA.
"Gsa has had these types of investigations for years," he said, and he and the others now under investigation figured this one was just "more bull. Maybe (President) Carter will come along and pardon them because of political pressure.We're used to politics."
In fact, the GSA employe has already been informed through his lawyer that he soon will be indicted on at least 15 counts of stealing from the government when he was manager of a GSA store that provided office supplies for federal employes in Maryland. He also has confessed to accepting several hundred dollars worth of merchandise from a firm that sold supplies to GSA.
Office supply firms and other who did business with GSA "would offer to pay a car or mortgage said. "They would say othe (GSA) stores are doing it . . . They would then show you the whole program" of ways to steal.
The higher-ups had to get theirs and had to keep it loose," he added, referring to the lax controls on spending at GSA that federal investigators have said encouraged corruption. "If you complained (about stealing), your job description read something different."
He has maintained to the end that this latest GSA scandal might be swept under the rug like so many others before it. Corruption, he said, has been commonplace and entranced at GSA, which spends $5 billion each year on office space and supplies for the federal work force.
But the present GSA scandal has grown into the largest involving money in U.S. government history, accordingly to GSA special counsel Vincent R. Alto. He was brought into the agency by GSA Administrator Jay Solomon a few months ago to supervise internal investigations of the corruption.
Federal grand juries in Washington and Baltimore are expected soon to indict at least 50 GSA employes and contractors and suppliers for bribary and fraud. Solomon has said. Those grand juries and others in cities across the country are likely to produce more indictments in the future, according to investigative sources. GSA itself plans to discipline possibly hundreds of other employes who will not be prosecuted for lesser offenses, according to the sources.
These investigations, a number of federal audits and a parallel investigation by The Washington Post have uncovered evidence of almost every imaginable kind of waste and corruption at GSA:
The managers of 27 of the 30 GSA office supply stores in the Washington region have accepted cash and gifts from supply firms in return for allowing the firms to be paid by GSA for supplies that never were received, according to federal investigators. One investigator estimated that as much as one-forth of the $37.4 million in supplies these stores handle each year has been lost this way.
GSA managers of federal buildings here have accepted bribes from contractors in return for allowing them to be paid by GSA for repair and maintenance work that was never done, according to investigators. Sources said investigators have found that $3 million of $7 million in repair and maintanece contracts for one group of federal buildings here was kicked-back to the building managers, who allegedly hid the money in Swiss and other foreign bank accounts.
Even after these investigations became public. GSA auditors found that building managers in Washington, New York, Boston, Chicago, Houston, Denver, San Francisco, Seattle and other cities were continuing to pay for repair and maintenance work that was not done.
GSA and other government drivers have pocketed as much as 10 percent of the $200 million they charde each year on GSA-issued credit cards for gasoline, oil, auto parts and repairs, according to an internal GSA estimate.
GSA pays more for typewriters, calculators and other office machines and equipment than customers of retail discount stores or state governments pay for the same items, according to a Washington Post study confirmed by GSA officials. Unlike the state governments, GSA has not used sealed competive bids to obtain the lowest possible prices for the $1.5 billion worth of such equipment it buys each year.
GSA ordered its building managers last year to spend as much money as they could in the remaining weeks of the fiscal year so that Congress would not lower its appropriation, according to government auditors. The building managers spent the money, among other ways, by paying some bills twice, hiring workers on overtime to clean building and awarding contracts with specifying their purpose or price.
GSA has not been forcing owners of office buildings it leases for government agencies to clean and make alterations in the buildings as their leases require. Instead, GSA has been doing the cleaning and alteration work itself or paying the landlords extra for it as two or three times the actual cost of the work, according to an internal GSA investigation. GSA also has made costly agreements to pay the landlords' utility bills in many buildings, according to government audits.
GSA has spent hundreds of millions of dollars buying metal desks and filing cabinets from Art Metal Inc., a Newark, N.J., firm representedly a close friend and, recently, a business partner of former GSA administrator Atrhur F. Sampson, even though the finishes peel and rust and the locks and drawers fail to work. After The Washington Post reported this, GSA canceled its latest Art Metal contract.
Until it was stopped by Jay Solomon, the current administrator, GSA was selling surplus minerals and chemicals the government had in stock at less than half market prices to certain firms without competitive bidding, which was costing the government $100 million in lost revenue.
"How in the world did it get this big and go on this long?" Sen. Lawton Chiles (D-Fla.), chairman of the Senate Governmental Affairs federal spending subcommittee, asked last week about the GSA scandals. "Why didn't the existing checking systems catch it?"
When GSA was established in 1949 on the recommendation of the Commission on Organization of the Executive Branch, headed by former president Herbert Hoover, it was supposed to consolidate overlapping functions of various agencies and bring "efficient, businesslike" methods to the operation of the federal government.
Today, GSA is much like a giant conglomerate that has just one customer - the federal government. It is the government's landlord, architect, purchasing agent, office manager, real estate broker and construction manager. Its annual spending is comparable to the sales volume of Boeing Co., the 46th largest industrial firm in the country. Its 34,000 employes are equal to the work force to Shell Oil Co., the 14th largest industrial firm.
Through its public buildings service, GSA owns 2,500 government buildings and leases space in another 7,500 owned by private developers. Through its federal supply service, GSA buys 6 million different goods and services and maintains a 78,000 car motor pool for the use of other agencies.
GSA also stores 14 million cubic feet of records in its national archives and records service and provides federal agencies with computers costing as much as $100 million each.
Not many years after GSA was established that the agency was losing tens of millions of dollars by selling materials from the agency's strategic stockpiles at unnecessarily low prices, or by buying at excessively high prices.
Eleven years ago, Rep. Jack Brooks (D-Tex.), chairman of a House government operations subcommittee, held hearings on GSA's practice of paying for two coats of paint when only one was being applied in federal buildings, something federal investigators have found continuing today.
During the Nixon administration, it was discovered that politically well-connected developers and landlords, especially those who contributed large amounts to winning candidates' campaigns, were being awarded large contracts for design and construction of federal projects and GSA leases of buildings for use by the government.
Some government employes and business people who deal with the government have responded to recent reports of GSA corruption by calling The Washington Post to tell of their experience with the agency.
"It was ridiculous," Richard G. Batson, owner of a printing design firm in Washington, said of what happened when he tired to return a GSA service station credit card he had found on 15th Street NW. "They (GSA) didn't seem to care about it," said Batson, who finally gave up trying to find someone in the agency who would take it back.
Marie D. Eldridge, a government statistician, told of being shocked by government workers who bring their children to stock up on school supplies at a GSA supply store in the Department of Transportation's Nassif Building.
"The parents would ask the children what they needed and put the items in the shopping carts," she said. "The (GSA) store managers didn't care."
"The incentives and disincentives of the government just don't work very well to make it very efficient or honest," said a prosecutor familiar with the current GSA investigations. "People aren't rewarded on the basis of how effectively they do the work, and there's no measure of how satisfactory the service is. The absence of a profit motive is one reason.
"The way the budget appropriations work, the money you save at the end of the year in a private company is called profit, but in the government it's something you have to spend because Congress will take it away and reduce your next year's budget if you don't."
GSA's primary function is awarding contracts to private firms who deal with the government. "The administrator of GSA can make someone rich with the stroke of a pen," said one GSA official. Former GSA administrator Sampson has referred to "enormous" political pressures he was under. He has conceded that he would give preference in awarding a contract to a friend of a political, all other things being equal.
For year, GSA also was known as being second only to the U.S. Postal Service as a dumping ground for less competent friends of members of Congress or administration officials who wanted their supporters rewarded with government jobs.
GSA procedures also insulate employes from being held accountable for their decisions. When GSA recently awarded a $9 million contract, later cancelled by Administrator Solomon, to Art Metal for more metal office furniture, the document certifying that everything was in order was signed by Leigh W. Willoughby, who is in charge of office furniture buying.
But Willoughly said recently he merely accepted the recommendations of a subordinate, Woody I. Landers, whose name appears nowhere on the award document.
"You're saying that," Landers said when asked why he did not declare Art Metal's plant incapable of performing for GSA in view of complaints about its products.
GSA's penchant for secrecy magnifies the problem. Despite GSA Administrator Solomon's declared policy of openness, a Post reporter who called employes of GSA's federal supply service at home to discuss prices paid for typewriters and calculators was told they had been instructed last month not to talk to The Post without "clearing" it with the public information office.
"Part of the problem," said Sen Chiles, "is lack of proper oversight by Congress. Congress has not paid attention to the role of oversight, and its time is consumed in other areas. Even when the checking agencies were there - the FBI, the GAO - it never got uncovered. That's the amazing thing to me."
In 1975 and 1976, Robert Lowry, a Hyattsville painting contractor, complained to both the FBI and GSA that contracts for painting government buildings were being rigged and the GSA building managers were being paid off. Rather than looking into the allegations, GSA officials in charge of public buildings referred them to the agency's internal investigators, who were known to be ineffective.
"You could investigate a janitor or a mental retardate of grade 9 or below, but anything higher and you'd run into opposition from above," a former GSA investigator said.
The FBI is known to have felt hampered by what was thought a lack of interest by GSA and the prosecution then in charge of the case.
It took an accidental finding by Lillian Gieseking, a supervisor in GSA's accounts payable section to start the current investigations a year ago. She looked over the shoulder of a clerk and noticed the clerk approving contractors' bills for payment even though that was not part of the clerk's job.Subsequent investigation revealed most of the firms receiving the GSA payments the clerk approved did not exist.
Whether the new investigations, the expectation of indictments and the accompanying publicity will stop the corruption is uncertain. Solomon has moved to establish more checking systems and has replaced GSA officials who had responsibility over areas most affected by corruption. But both Lowry and the store manager who is about to be indicted claim the corruption continues at a slower pace.