The Washington Post

Criminal probe sought in GSA case

The inspector general for the General Services Administration this week asked the Justice Department to conduct a criminal investigation into the activities of the senior official at the center of the Las Vegas spending scandal, officials said.

Jeffrey E. Neely, a career senior executive who hosted a four-day training conference for 300 managers and staff members that cost $823,000, took various electronic items for his personal use from a GSA storeroom, congressional and other officials familiar with the referral said.

Inspector General Brian D. Miller also has asked prosecutors to review possible contracting improprieties and other violations in connection with the conference, said the officials, who spoke on the condition of anonymity because the referral is not public.

Neely allegedly took gifts purchased for an employee rewards program in the San Francisco-based Pacific Rim region, where he has been placed on administrative leave from his role as acting regional commissioner. The gifts included an iPod and speakers, a Global Positioning System, camera and Sony eReader, according to government sources.

Miller has turned over to prosecutors what he says is evidence that Neely, 57, and his staff approved numerous contracts that were not competitively bid, as federal rules require, officials said. The sole-source deals were services that included, according to a recent inspector general’s report, $59,000 to an audio-visual firm, a $12,500 commission to an outside event planner and $75,000 to a company that led GSA staff members in a bike-building event.

The inspector general’s staff met with Justice Department officials several times this week to discuss the evidence, according to government sources.

Department of Justice spokeswoman Laura Sweeney declined to comment on the referral. The inspector general’s office could not be reached.

Neely’s attorney, Preston Burton, called him “a good man who has been a dedicated government employee for over three decades.”

In the 11 days since Miller documented how a tradition in GSA’s Public Buildings Service, the so-called the Western Regions conference, apparently spun out of control with little oversight from Washington, the scandal has become an election-year lightning rod on the issue of government spending.

The criminal referral comes as documents the inspector general provided to Congress show that GSA officials knew about the conference spending at the four-star M Resort and Casino months before the final details became public. Former administrator Martha Johnson and her staff members received a briefing from Miller’s staff in May that laid out most of what appeared in the final report, according to a 15-page presentation titled an “Interim Alert Report.” The Washington Post has obtained a copy of the report.

Former Public Buildings Service commissioner Robert Peck gave Neely a reprimand last summer, calling the mistakes a “managerial lapse.”

A deputy administrator at GSA later questioned the level of discipline, writing in an e-mail to Peck: “Sorry, but your letter is not even a slap on the wrist.”

One of the concerns raised by deputy administrator Susan Brita in her e-mail was how the situation would look in the media.

Peck and a top adviser to Johnson were fired hours before the inspector general’s report was released; Johnson resigned.

Peck, Brita and Johnson are among those called to testify before Congress next week, when four back-to-back hearings have been scheduled by lawmakers in both parties.

Neely, one of four regional commissioners placed on administrative leave, has been subpoenaed by at least one congressional committee and plans to invoke his Fifth Amendment right not to incriminate himself, his lawyer told Rep. Darrell Issa (R-Calif.), chairman of the Committee on Oversight and Government Reform, in a letter Friday.

“Witnesses were invited with the expectation that they will deliver testimony at Monday’s hearing,” said Frederick Hill, communications director for the committee, which has scheduled a hearing Monday.

The employee recognition, or “Hats Off,” program was the subject of a separate investigation last year by Miller’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.

Lisa Rein covers the federal workforce and issues that concern the management of government.

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