Jay Solomon, administrator of the General Services Administration, told a Senate subcommittee yesterday that the fraud uncovered at that agency recently is "only the beginning" and that "the ugly and disgusting saga will further unfold during the days ahead at GSA."
Later, other GSA officials filed in the specifies about the kind of practices that have been uncovered: they testified that GSA spent $1.5 million for 33,000 Art Metal storage cabinets that arrived in such bad shape or given away, then subsequently spent $15.5 million for 120,000 more cabinets.
The subcommittee was also told that suspended sentences have been given to employes convicted of stealing hundreds of thousands of dollars from the agency, while employes who tried to expose wrongdoing have been fired.
The Art Metal firm has figured prominently in stories about detective office furniture, and Art Metal president Philip J. Kurens appeared voluntarily to defend his firm, which obtains 86 per cent of its sales from the government.
Kurens told the Senate Government Affairs subcommittee on federal spending practices, headed by Sen. Lawton Chiles (D-Fla.), that his firm has been falsely maligned through "innuendoes, rumors and half-truths" and the GSA has, in the past, repeatedly certified that his company's products are acceptable.
The testimony occured on the second day of the subcommittee's hearings into problems at GSA, and a principal witness was administrator Solomon. "The fraud, the corruption, the thievery, the mismanagement and downright abuse of the public trust that have been exposed to this date are only the beginning," said Solomon.
"And the actions I've taken to date to deal with these problems, likewise, are only a beginning," he added.
Other GSA officials told the subcommittee that the agency has spent $360 million over the past 10 years to buy furniture from Art Metal and that some of the metal desks, chairs and file cabinets arrived with rusty finishes, legs that do not fit, sharp edges, or parts that fail to meet GSA specifications.
Kurens, however, testified that Art Metal chairs "exceed" GSA specifications, and complaints about the one million pieces of furniture supplied by Art Metal to GSA in the past 10 years have amounted, by GSA's account, to a fraction of 1 percent.
"We are proud that, when there is a manufacturing deficiency, we repair it at no cost to the government," he said.
A July 3 Washington Post story reported that Art Metal frequently declines to make such adjustments on the grounds that the furniture was damaged during shipping.
GSA determined last October, for example, that an Art Metal desk that arrived at a Naval installation with glue spots and damaged drawers and panels had not been damaged during shipping. But Art Metal claimed it had been damaged in shipping, and that the carton appeared to be intact only because "air pressure" had restored the carton to its original shape.
Speaking of penalties for abuses, William A. Clinkscales Jr., chief of GSA's investigative staff, told the subcommittee that a Health, Education, and Welfare Department employe who gave away a GSA credit card in return for a parking space received a suspended sentence and a promotion in her job, even though $80,000 had been illegally charged to the card.
GSA employe who pleaded guilty in 1976 to stealing $300,000 from GSA by submitting false bills payable to a post office address he had set up also received no jail term, the senators heard.
In addition, GSA staff chief Howard R. Davia testified a State Department employe who charged $360,000 in Polaroid film to a GSA credit card received a suspended sentence.
In contrast, Vincent R. Alto, GSA's chief counsel, cited the case of Wilton F. Shearin, a GSA employe who was demoted because he disputed a contractor's claim that he was owed millions of dollars extra on the construction of a Honolulu courthouse "whose basement is a salt water pool" from leaks.
"Doesn't it seem that the only ones who get punished are the whistleblowers?" asked Sen. Sam Nunn(D-Ga.), a member of the subcommittee.
"Yes, sir, I believe so," Clinkscales said.
In an effort to curb the abuses, Solomon said, he has had 80 employes reassigned in the past several weeks in the Washington area alone. So that other GSA employes may feel free to report instances of wrongdoing without fear of retribution, Solomon said, he has reinstated whistle-blowers.
A program has been started to train contracting officers in procurement methods, and an office has been set up to coordinate procurement policy throughout GSA, Solomon testified.
He said GSA's budgeting has been centralized, and limits have been established so that employes must now seek higher approval before they award large contracts.
Solomon said he has dusted off old studies recommending needed changes at GSA and expects to put many of the proposals into effects.
"I cannot promise you miraculous solutions with the stroke of a pen," he said, "but I can promise you hard work, and backbreaking effort to bring to this agency the realization of President Carter's highest aspiration for an honest, decent, and efficient government."