The senior official at the center of the General Services Administration’s Las Vegas spending scandal is now facing a possible Justice Department criminal investigation into theft, contracting improprieties and other violations.
GSA Inspector General Brian Miller, who documented excessive spending on entertainment, food and travel to the $823,000 training conference, this week asked the Department of Justice to consider criminal charges against organizer Jeffrey E. Neely, congressional sources and other government officials familiar with the referral said.
The officials, who spoke on condition of anonymity because the referral is not public, said the inspector general has turned over to prosecutors what he says is evidence that Neely, 57, a career senior executive with the Public Buildings Service, took various electronic items for his personal use from a GSA storeroom in the San Francisco-based headquarters for the agency’s Pacific Rim.
Neely’s attorney, Robert DePriest, did not return several calls for comment. Department of Justice spokeswoman Laura Sweeney declined to comment. The inspector general’s office could not be immediately reached.
It is unclear if the referral will result in an investigation.
The items allegedly included an iPod and speakers, GPS tracking system, camera and Sony e-Reader, according to government sources. The storeroom held gifts for an employee awards program Neely founded for the staff of the four-state Pacific Rim region.
The referral comes as Neely and other GSA officials have been asked to testify at four congressional hearings scheduled for next week on the four-day, 2010 conference. It is unclear whether Neely plans to appear.
“Witnesses were invited with the expectation that they will deliver testimony at Monday’s hearing,” said Frederick Hill, communications director for Rep. Darrell Issa, whose Committee on Oversight and Government Reform has scheduled the first hearing on Monday.
The scandal prompted Administrator Martha Johnson to resign, two of her top deputies to be fired and five regional commissioners, including Neely, to be placed on administrative leave spending further disciplinary action.
The congressional sources said the inspector general’s staff met with Justice Department officials several times this week to discuss the evidence, which includes numerous alleged contracting improprieties cited in a report released by Miller’s office last week.
During 19 months of planning the biennial “Western Regions” conference, Neely and his staff hired numerous vendors to provide entertainment and other services for the four-day conference the four-star M Resort Spa Casino. The contracts were not competitively bid, as federal rules require.
They include $75,000 to a company that ran a bike-building exercise for conference attendees; 25 bikes were donated to a local Boys and Girls Club in violation of federal rules. A $58,000 contract for audio-visual services also was not competitively bid.
The employee recognition or “Hats Off” program was the subject of a separate investigation last year by the inspector general’s office, which found rampant abuse of the program. Investigators found an inadequate inventory system, poor security, theft and misuse of government purchasing cards used to buy the gifts. The awards also exceeded GSA’s $99-per-item limit on gifts.
The budget for the program had risen dramatically in recent years. In 2008, employees at the Pacific Rim region, which oversees federal property in California, Arizona, Nevada and the Pacific Islands, received $47,012 in gifts. The next year that number increased to $211,842, then dropped to $134,596 by 2010. In 2011, the program issued $844 worth of awards.
The report found that in fiscal year 2009, Pacific Rim employees received $256 in awards and Public Buildings Service employees in the region averaged $328.
The criminal referral comes as an internal memo released by Issa’s committee on Friday showed that GSA officials knew about the misspending long before the conference became public last week.
The former public buildings commissioner, Robert Peck, gave Neely a light reprimand last summer after Peck was briefed on details of the conference. He called the mistakes a “managerial lapse.”
Robert Peck, in a memo to Neely last summer, said he found the four-day training conference’s general sessions “to be creative and professional presentations on important issues that we deal with in the Public Buildings Service.” He added that the event “appears to have been an effective means of informing the attendees about [Public Buildings Service] programs and policies and of facilitating an exchange of best business practices.”
Peck then referred to an interim briefing by the inspector general last May.
“Given that you had executive oversight of this [conference’s] planning and execution, you could and should have exercised better judgement concerning these expenditures,” Peck told Neely. “You have served GSA as a senior manager long and well. This instance appears to reflect a managerial lapse which I expect will not be repeated.”