Jeffrey Neely, the senior executive whose appearance in a video drinking wine in a hot tub at a Las Vegas hotel became the public face of a conference where hundreds of federal employees partied at taxpayer expense, was sentenced Tuesday to three months in prison.
The former regional commissioner for the General Services Administration’s Pacific Rim real estate portfolio also will serve three months’ home detention and pay $10,000 in restitution and fines. In April, he pleaded guilty to one count of fraud against the government, admitting that he had billed GSA for a night’s stay at the M Resort Spa Casino in Las Vegas, even though he was not on business for the agency’s Public Buildings Service.
Neely also admitted to prosecutors that he got GSA to pay additional false claims during his tenure, improperly failed to claim annual leave on certain dates and illegally charged the government more than $5,000. And he acknowledged that he had both abused his position as a top government official and lied to the GSA inspector general’s office, which released an explosive report in 2012 documenting abuses at the Western Regions Conference.
Neely’s sentencing in Nevada caps a scandal that changed the way the government does business. It cost the GSA administrator and her top deputies their jobs, led to multiple congressional hearings and shined a light on extravagant conferences held by the Department of Veterans Affairs and the Internal Revenue Service. GSA, a relatively small agency that oversees federal real estate and purchasing, became the butt of late-night TV jokes.
“It’s unusual for someone with no criminal history to get federal confinement even for three months for this kind of crime,” said Brian Miller, the former GSA inspector general who cracked open the story of his agency’s extravagances, which featured a mind-reader and after-hours parties in loft suites. “This is a message to current officials [in government]: Don’t abuse the public trust! Neely will forever be the face of what’s wrong with government,” said Miller, who left the GSA last year and now works at the Navigant business consulting firm.
Neely, the mastermind behind the conference, told his colleagues he wanted the event to go “over the top.” There were after-hours parties, a $7,000 sushi reception, $44-per-head-breakfasts, a $3,200 mind reader and $130,000 spent on pre-conference scouting trips. Senior officials, including then including then-buildings chief Robert Peck — stayed in two-story, 2,400-square-foot loft suites with wet bars and multiple HD televisions.
Neely’s wife, Deborah, accompanied him on some planning trips on taxpayers’ dime, handled party arrangements, directed event planners to spend government money and arranged lodging for relatives. It was a devil-may-care culture that made a mockery of the Obama administration’s pledge to run a more efficient civil service.
Neely said in an e-mail, “There will be a time and a place for me to talk to the press about this. That time is not now. And that place will be determined.”
The uproar over the $823,000 junket for 300 employees held off the Las Vegas strip in 2010 — at a time when the recession prompted calls by both political parties for smaller, more efficient government — led to stricter travel and training policies that are still rippling through every federal agency.
All told, 11 managers involved in the Western Regions conference were fired, eight employees suspended and eight others admonished, reprimanded or warned. A new GSA chief appointed by President Obama moved quickly to rein in travel and conference budgets that had spiraled out of control: In four months, 50 conferences were canceled.
The rest of the government soon followed with strict limits on conference spending. Daily reimbursement rates for federal travel were frozen rather than increased, as is customary. Bonuses for top executives were cut, and a hiring freeze was put in place for all but essential hires.
But three years after the clampdown, the restrictions are still taking an unanticipated toll, with employees at a wide range of agencies saying they’ve gummed up the machinery of government. Attendance at official gatherings outside the office, even just down the street, can require extensive paperwork and multiple levels of approval. And scientists in particular say they can’t share their research with colleagues, in some cases stalling their careers.
Prosecutors had sought six months in prison for Neely, 60, who was allowed to retire and moved to Gardnerville, Nev. They had charged him with submitting fraudulent travel and personal expenses for trips to three other locations. When federal investigators questioned him about the expenses, he lied and said they were for business purposes, prosecutors said.
He had refused to testify before Congress, pleading his Fifth Amendment right against self-incrimination.
The scandal had other casualties that showed the Obama administration may have gone too far in trying to clean house. Two of Neely’s colleagues, senior executive who also were forced out, won their jobs back last year through an appeals process for personnel disputes for civil servants. James Weller and Paul Prouty made the case that they did not know about Neely’s plans for the conference and should not have been disciplined for failing to stop him.
Alan Lescht, the attorney for Weller, said his client is “happy to be back at work” as the regional commissioner for GSA for the Southwest.