Congress may restructure the Public Buildings Service following the scandal over spending on conferences that brought down the agency’s commissioner, Robert A. Peck, and General Services Administration chief Martha N. Johnson.
Some House Republicans, including Rep. Jeff Denham (R-Calif.), said they may consider trying to do away with GSA altogether. District Del. Eleanor Holmes Norton (D) hasn’t gone that far, but she said the GSA’s dual missions of signing real estate deals and managing contracts are largely unrelated and might require separating.
The scandal, Norton said, also exposed how little accountability and oversight was centered at the top of the GSA, giving too much leeway to managers around the country. “I think there are huge structural problems in the way this agency is structured,” she said.
The public buildings unit, manager of 9,600 federal properties nationwide, has an out-size effect on Washington area real estate because the government occupies roughly one-quarter of the region’s commercial office space, far more than any other single employer. When it pulled back on leasing recently, the entire Washington market followed, leading to a major drop in first quarter leasing.
Under Johnson and Peck, the buildings service began to focus more heavily on leasing and energy metrics aimed at reducing the costs in the federal real estate inventory. Both officials pushed for federal agencies to use fewer square feet per employee through tele-working, desk-sharing and other measures.
According to Peck, the GSA’s ninth region (California, Arizona, Nevada, Hawaii, Guam, American Samoa) had been performing admirably on real estate metrics when he recommended its commissioner and acting administrator for a raise and a nearly $9,000 bonus.
That administrator was Jeffrey Neely, the central target in the scandal. Peck recommended Neely for a raise even though the GSA’s inspector general had earlier shared with him and other administrators draft findings that questioned Neely’s role overseeing a 2010 Western Regions conference.
Neely has been accused of using taxpayer dollars to fly his wife on agency trips, and to pay for hotel rooms, travel, parties and food outside of government regulations and contracting standards.
Called to appear before a congressional subcommittee last week, Neely invoked his Fifth Amendment right against self-incrimination and declined to respond to questions.
Denham asked at a hearing of the Transportation and Infrastructure subcommittee last week how Peck justified recommending a raise for Neely given the findings about the spending practices, and over the objections of Susan Brita, the GSA staffer who first requested the investigation.
Peck responded that the region’s real estate performance was so strong that Neely in fact had qualified for an even higher increase had it not been for his misconduct. “I was looking at the performance of the the region in respect to his main real estate responsibilities as well as Mr. Neely’s problems with the conference,” Peck said.
In an interview after the hearing, Peck said that as commissioner of public buildings he was focused on trying to ensure that every region was leasing space “at market rate or below market rate.” The agency signs around 1,000 leases a year using a budget of about $5 billion. “I thought if I could just shave off one percent of that,” that it would save millions of dollars, he said.
He said that at the time, he trusted that senior administrators did not need their travel plans approved from Washington. “You just hope to God that a Jeff Neely doesn’t come along,” he said.
Neely has declined through his attorney to comment on the accusations.
Norton said the conflicting performance measures showed a larger conflict at GSA. “The bonus issue is a really big issue here, because the central figure in this drama is Commissioner Neely, and Commissioner Neely was of course someone who … should not receive a bonus,” she said.