GSA scandal: Heavy fallout expected

Federal employees are bracing for heavy fallout from Congress over the recent scandal at the General Services Administration.

The GSA inspector general’s office has asked the Justice Department to review wasteful spending by the agency for possible criminal charges, according to a congressional source familiar with the investigation.

The U.S. attorney’s office for the District of Columbia would neither confirm nor deny the existence of an investigation. The Justice Department and the GSA IG office declined to comment.

And on Capitol Hill, four committees have hastily scheduled hearings on the scandal this week.

Many feds — who say they are as shocked as anyone over the details that have emerged — aren’t hopeful measured responses will prevail.

As scandals go, this one was a doozy. The details of the $822,000 Las Vegas conference — featuring mind readers, lavish parties and embarrassing parodies — were released April 2 in an inspector general’s report and widely covered. More than a half-dozen top leaders at GSA were immediately fired, put on leave or forced to resign. And stern rebukes came from the White House.

The IG also found that GSA mismanaged an employee awards program called “Hats Off,” in which the agency spent $440,000 on gifts such as iPods, digital cameras and gift cards. The IG said 115 iPods valued at $20,000 could not be accounted for, while another 40 iPods were stolen. And GSA employees administering the program received the most awards, the IG found. GSA suspended the program last week.

“Holy cow — what were they thinking?” said one Army logistics supervisor who asked not to be named because he was not authorized to talk to the media. “Everybody [in my office] is gobsmacked. I’m horrified at what’s apparently happened out there.”

But he and others say the government’s responses to such incidents often go too far, creating more problems than they fix.

“Across the federal civil service — DoD, everybody — there’s going to be additional scrutiny,” the Army supervisor said. “Some of that is going to be on point, some of it is going to be an unfortunate hindrance to legitimate business.”

Many federal employees interviewed by Federal Times — most on the condition they remain anonymous — said they expect lawmakers to cut deeply into federal travel, conference and training budgets in the aftermath of the scandal. And they expect that getting approvals for legitimate business trips will almost certainly get harder and more time-consuming.

And they may be right.

Rep. Jo Anne Emerson, R-Mo., chairwoman of the House appropriations panel that oversees GSA, said she intends to cut GSA’s budget next year. The scandal isn’t the only reason, but it demonstrates the agency has more money than it needs, she said.

“We are going to be scrubbing the budget even more than we were otherwise going to be doing because of the conference,” Emerson said in an April 10 interview.

Emerson said she is planning cuts to GSA’s Public Buildings Service $8 billion budget, including cuts to travel and conference spending for next year.

Brian Turmail, spokesman for Associated General Contractors of America, said contractors are worried the scandal will result in cuts to GSA’s construction and renovation budgets.

“Given the extreme lengths our members go through to make sure tax dollars are invested wisely and well, it would be a shame if their workers are punished for the poor choices made by some of the staff over there,” Turmail said.

Rep. Elijah Cummings, D-Md., the ranking member of the House Oversight and Government Reform Committee, said Congress needs to examine how GSA made such poor decisions and make sure it does not happen again.

“GSA is an agency that has had problems for many years, and it has a lot of work to do to re-establish trust with other agencies and with the American taxpayers,” Cummings said.

Rep. Jeff Denham, R-Calif., chairman of the House subcommittee that oversees public buildings, said Congress should place tighter restrictions on how GSA spends its funds.

“There’s clear indication GSA, and the Western Region especially, have been abusing taxpayer dollars for years,” Denham said.

Lawmakers likely will propose other measures during three planned hearings this week to examine the scandal. Those hearings will be before the House Oversight and Government Reform, House Transportation and Infrastructure, Senate Environment and Public Works committee and Senate Appropriations financial services subcommittee.

“Even before the scandal, we were concerned about cutbacks,” said an employee from the Agriculture Department, who asked not to be identified. “Now, people will say, ‘Oh, it’s federal employees getting together, and they’re going to do mind reading or something.’ “

The Army supervisor thinks the scandal will prompt agencies to rely more on teleconferences, online seminars and other virtual meeting technologies. That may not be that bad, he said, since it will be cheaper than flying feds around the country.

The Agriculture employee fears webinars won’t provide the same benefits as in-person meetings. She’s worried that a regional conference this fall — at which Agriculture employees will attend workshops to learn how to implement new hiring, travel and other personnel policies — will be canceled due to budget concerns, forcing the discussions online.

“Webinars have connection problems, and who wants to read pages and pages of new policies?” she said. “Who will answer our questions? Who will provide motivation? I don’t think you can get a lot of information and networking done that way.”

Worse still, some say, is that the scandal reinforces negative stereotypes many Americans hold of federal employees as overpaid, underworked spendthrifts and poor stewards of taxpayer dollars.

“They’re going to paint us all with the same brush” as GSA, the Army supervisor said.

A quality assurance specialist at the Veterans Affairs Department said he worries the scandal will give lawmakers an excuse to extend the current two-year pay freeze.

The Army supervisor, who oversees employees who authenticate travel orders for his organization, said some of the GSA travel requests should have raised red flags. For example, he said, some employees stayed in Las Vegas a few days before or a few days after the conference. If an employee had brought that travel request to him, he said he would have reported it.

“The JFTR [Joint Federal Travel Regulations] is very specific on some stuff that they blew right past,” he said.

He said the GSA scandal exposed fatal flaws in the agency’s management.

“The fish stinks from the head down,” he said. “Somewhere, the management culture was such that it evidently caused these people to think it was OK to do what they did.”

The Army supervisor said the GSA revelations — and the fact that few people involved with the conference seemed to think anything was wrong at the time — reminded him of another infamous Las Vegas conference scandal from two decades before: Tailhook.

“There were people out there who know better, and who just seemingly lose their minds,” he said. “There’s no sense of accountability. It’s not our money — it’s the people’s money.”

The scandal forced the resignation April 2 of GSA Administrator Martha Johnson and the firing of Public Buildings Service Commissioner Bob Peck and Johnson’s chief of staff Stephen Leeds. In addition, Deputy Public Buildings Commissioner David Foley, Region 9 Commissioner Jeff Neely — who organized the Las Vegas conference and directed that it be “over the top” — and three other regional commissioners were placed on administrative leave.

Lax initial response by GSA

Among the criticisms of GSA is that top officials reacted weakly at first to revelations of wasteful spending on the Las Vegas conference. When confronted with early findings by the IG, Peck handed Neely a weakly worded letter of reprimand.

But GSA’s No. 2 official, deputy administrator Susan Brita, complained to Peck and Leeds in a July email that the reprimand of Neely was “not even a slap on the wrist.”

“Jeff is a seasoned SES [Senior Executive Service member] who is expected to display the highest standards of common sense, and prudent financial management. He did neither,” Brita wrote in the email to Peck and Leeds.

In the letter of reprimand, Peck said to Neely that the inspector general report did not refer to the benefits of the conference and said some of the costs were of “questionable value.”

“This instance appears to reflect a managerial lapse which I expect will not be repeated,” Peck said.

After that email, Neely received a $9,000 bonus toward the end of 2011.

Not until right before the April 2 release of an inspector general’s report detailing the conference waste did GSA place Neely on administrative leave.

Brita’s email said the inspector general had not found any conference agenda that supported “important issues.”

“Furthermore, expenses for a clown suit, bikes, tuxedos, and mind reader don’t really lend themselves to a claim of a substantive conference,” Brita wrote.

GSA takes step to fix problems

Even as feds brace for the aftermath of the conference scandal, GSA is already taking steps to rein in wasteful spending. Acting administrator Dan Tangherlini and GSA’s inspector General Brian Miller sent a letter to GSA employees last week urging them to report waste or abuse. Other steps:

• Require mandatory annual training for all employees regarding conference planning and attendance.

• Strengthen contracting oversight for all conference-related activities.

• Reduce all 2013 travel budgets for GSA Public Buildings Service regional offices 7, 8, 9 and 10, and shift oversight of those regions’ budgets to PBS headquarters in Washington.

STEPHEN LOSEY also reported for this story.

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