House panel to probe GSA spending scandal

April 4, 2012 at 3:30 AM
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WASHINGTON, April 4 (UPI) -- A congressional panel will investigate the U.S. General Services Administration's misuse of federal money, a House committee chairman said.

"This Las Vegas fiasco is just the tip of the iceberg," House Transportation and Infrastructure Committee Chairman John Mica, R-Fla., said at a news conference. "This is a horrible example of wasteful conduct by public officials and federal officials."

Mica promised that after Congress returns from recess April 16 a subcommittee of his panel would conduct "a full hearing on this and other matters, trying to hold GSA accountable for taxpayer waste and inefficiency."

GSA's inspector general issued a scathing report Monday detailing misuse of funds and federal contracting violations over an $823,000 employee training conference GSA held at the M Resort Spa Casino near Las Vegas in October 2010.

The report detailed $58,808 for "audio visual services," a "networking reception" where the fare included "Petit Beef Wellington" and 1,000 sushi rolls at $7 apiece, $147,000 for airfare and lodging and a $75,000 "bicycle building project" designed as a "team-building exercise."

In addition, $6,000 was spent on commemorative coins, $6,000 on canteens, key chains and T-shirts -- and a $12,000 finder's fee paid to an outside company to book the boutique hotel and casino in Henderson, Nev., even though the GSA has staff event planners who are supposed to do that on the agency's behalf.

The GSA, which employs nearly 13,000 people across the country, supplies products and communications for U.S. government offices, provides transportation and office space to federal employees.

Its mission includes developing government-wide cost-minimizing policies, among management tasks.

Shortly before the report was released Monday, the agency's top official, Martha Johnson, fired her top two deputies and then resigned.

She was temporarily replaced by Assistant Secretary of the Treasury for Management Dan Tangherlini, who said in a letter to employees the agency was taking immediate steps "to ensure that our customers maintain their faith in our services," CNN reported.

Those steps include reviewing planned conferences and meetings that involve travel or substantial expenditures of taxpayer money and canceling conferences that only or primarily involve staff, his letter said.

The Obama administration directed all agencies to review conference expenditures.

Sen. Claire McCaskill, D-Mo., chairwoman of the Homeland Security committee's subcommittee on contracting oversight, complained to The New York Times Johnson ducked a meeting with her two weeks ago, evidently aware the damaging report was about to be released.

"As a government auditor, I have found that there are two possible responses from an agency when they get a critical audit," said McCaskill, a former state auditor in Missouri. "One is to say, 'You know what, you're right, we need to do better and we're going to fix it.' The other is to circle the wagons, rationalize and obfuscate. GSA had the latter down to an art form."

A predecessor of Johnson, Lurita Doan -- who served under former President George W. Bush -- resigned as GSA head in May 2008 at the request of the White House following accusations she tried to steer a contract to a friend and used GSA resources for partisan political ends in violation of the Hatch Act, aimed at corrupt political practices.

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