GSA chief gone, but fallout continues in wake of lavish convention expense

A day after the head of the General Services Administration resigned because of a procurement scandal at the federal agency, officials vowed Tuesday to implement spending reforms and disciplinary action she announced on the way out the door.

A letter Monday from now-former GSA Administrator Martha Johnson agreed with the recommendations of the GSA inspector general in a report that documented massive overspending, questionable expenditures and a cavalier attitude toward procurement rules surrounding a regional training conference held in Las Vegas in 2010.

The inspector general’s report on the GSA “Western Regions” training conference showed the government spent more than $822,000 for the 300 attendees, including $75,000 on team-building exercises, $6,000 on commemorative coins and $6,000 on canteens, keychains and T-shirts.

Johnson said the details in the report are “egregious,” and “absolutely unacceptable,” and she announced measures that include “disciplinary action against several senior management officials.” Johnson’s letter to the inspector general did not name names, but a congressional panel late Tuesday said the agency’s Public Buildings Service Commissioner Robert Peck was fired.

Before she resigned Monday, Johnson canceled certain GSA regional training conferences in the future, put others under the oversight of different agency officials and announced tighter controls and review over GSA’s procurement and contract spending.

U.S. House lawmakers now plan a hearing to review the findings and potentially call for additional steps. Florida Republican Rep. John Mica issued a statement saying “the tab even included a clown for entertainment. This is just the tip of the iceberg.” Mica is chairman of the House Transportation and Infrastructure Committee, the panel that will hold a hearing on the matter within weeks.

The misconduct allegedly started during planning for the Las Vegas event about two years ago. After Johnson’s resignation Monday, the administration named as acting administrator Dan Tangherlini, who was brought over from the U.S. Treasury Department.

Tangherlini said in a letter of introduction to GSA employees that the agency was taking some immediate action “to ensure that our customers maintain their faith in our services.” Those measure include a review of planned conferences and meetings that involve travel or substantial expenditures of public funds and the cancellation of a number of conferences that only or primarily involved staff, he said in the letter.

Tangherlini also the agency would evaluate its conference and travel policy and business justification.

Among the items cited in the inspector general’s report was a $12,000 finder’s fee paid to an outside company to book the “M Resort” complex and hotel for the convention, despite the fact the GSA has event planners on staff who are supposed to do that on the agency’s behalf.

Then there was the food bill. The inspector general’s report hit GSA for catering events portrayed as “awards” ceremonies, apparently as a pretext to having the expense covered. The “awards” were for entertainment, in what the investigation said was a talent show among participants.

In its findings, the report said: “The proper purpose of an awards ceremony is to give out awards recognizing significant contributions to the efficiency and effectiveness of government operations, rather than holding an event and giving out awards as an ancillary purpose to justify food.”

The investigation was prompted by a GSA deputy administrator, according to the report, who asked for a probe of “employee misconduct” and questionable spending on activity surrounding the Western Regions conference held at a resort hotel in October, 2010.

GSA employs nearly 13,000 people across the country, and is the federal agency that buys and manages goods and services for the government ranging from envelopes to real estate and office buildings. As staffers got word of the 16-page report, reaction Tuesday was described as grim. GSA press secretary Gregory Mecher told CNN, “I think there’s a general feeling of being disturbed, and that people are appalled by the report.”

Also Tuesday, the watchdog group Common Cause called the report “mind-boggling,” and praised the GSA official who came forward to make the allegations. In a statement obtained by CNN, Common Cause president Bob Edgar said, “Every federal employee should be looking at every expenditure with a critical eye and asking: ‘Is this necessary? Does it serve the public interest?’”

Another group, Public Notice, which urges a policy of fiscal restraint, issued a statement Tuesday that said “GSA’s boondoggle is a small symptom of a much larger problem” of government overspending. Executive Director Gretchen Hamel called on congressional lawmakers to cross party lines, negotiate and craft a sustainable federal budget.