More than $1 million worth of merchandise each year is being stolen by General Services Administration employes from warehouses that stock office equipment and furniture for the agency, according to a consultant's study.
The study of theft at GSA's 20 warehouses across the country was made by Philip C. Baridon of Public Management Services Inc. in McLean for GSA's Federal Protective Service, which guards federal buildings. Baridon said he was told by GSA employes he interviewed that GSA officials were aware of the theft problem.
"I think they feel powerless to do anything about it," Baridon said, "partly because of a lack of resources and partly because they had an idea it was protected by officials of GSA."
GSA sources said the agency has been aware of the theft problem at the warehouses and has asked the FBI at various times to investigate. GSA now has an ex-convict working as an undercover agent in one warehouse where thousands of dollars worth of merchandise has been carted off in trucks each week, according to a source.
"They've been stealing for years." the source said. "They use legitimate trucking firms and put the contraband on the trucks along with legitimate merchandize. They take something they want and drop it from the inventory. It's checked out by people involved, and they have people on the loading docks."
William B. Foote, assistant GSA commissioner in charge of the warehouses, said his figures show only a $146,000-a-year shortage from thefts or errors in inventory records on the $800 million in merchandise that passes through the warehouses each year.
Baridon's study team compared records of shipments into the warehouses with records of shipments out and estimated the total annual losses at $1.3 million. They concluded that GSA's own estimates of losses were inadequate.
"We were told it takes God himself declare a shortage a theft so they dump it (the shortages) in other categories in their records," Baridon said. At some warehouses, he said, GSA's records showed profits, which he said was "impossible."
Barison said that when he presented his findings on the warehouses theft problem in 1976 to Jack M. Eckerd, who then was GSA's administrator, Eckerd seemed disinterested and took no action.
Walter J. Burns, who requested the study as head of operations of GSA's Federal Protective Services, said Eckerd appeared to accept contentions of those who run the warehouses that the study was not thorough enough and might suffer from errors.
"He said he was concerned about theft but didn't think it was that big a probelm," said Burns, who retired from GSA earlier this year. "We felt it justified pursuing the matter more intensely, but he didn't."
Burns said Eckerd, who had become GSA administrator several months before the briefing, told him to "work out something" but did not take any specific action or ask for more study.
Eckerd was appointed GSA administrator by President Ford in 1976. He left GSA in January 1977 rather than accede to a request by President Carter that he name as his deputy Robert T. Griffin, a close friend of House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.)
Eckerd, who owns a kmajor drug store chain in the South, currently is one of two Republican candidates for governor of FLorida in a primary election Sept. 12.
Eckerd said recently he did not recall the theft report or the meeting about it. He also said he did not think an annual $1 million loss was high when compared to the hundreds of millions of dollars in merchandise that pass through the warehouses.
"That (estimate) would be fantastically low for that volume," he said, adding that his drug store chain accepts a 4 percent to 5 percent rate of internal and external stealing. Eckerd said he wanted to hire more guards to protect federal buildings but met with opposition from the Office of Management and Budget.
During his administration of GSA, Eckerd concentrated most of his attention on the agency's federal supply service and the GSA supply stores that dispense office supplies to U.S. workers. Eckerd was concerned that the stores were not adequately stocked with items needed by government workers and did not display them attractively.
However the General Accounting Office, the audit arm of Congress, told Eckerd in August 1976 that the stores were managed in a way that could result in thefts and shortages. Specifically, the GAO said the stores were being audited only every three or four years, records of inventories were not accurate and could conceal shortages, and controls over improper purchases by government employes of items for their own use were weak.
The GAO also said that stores should stock more items so that federal agencies do not have to buy them on their own at higher, commercial prices.
Eckerd, in a reply to the GAO, said he agreed with most of the recommendations but cited as examples of the steps he is taking only those that dealt with stocking more items. Eckerd said recently he asked for 20 more auditors but was turned down by the Office of Management and Budget. "They wouldn't give me even five auditors," he said.
Justice Department and GSA internal investigators have now established that 27 of the 30 GSA supply stores in the Washington area have been paying for goods never delivered in return for cash and gifts from the supply firms to the GSA store managers.
The present GSA administrator, Jay Solomon, has said that at least 50 GSA employes and suppliers who do business with GSA soon will be indicted in federal investigations of corruption in the supply stores and GSA's contracting for maintenance and relairs of U.S. buildings.