Hearing Highlights GSA Scandals, Waste & Mismanagement

Aug 1, 2012 Issues: Government Waste

WASHINGTON, DC — The growing list of General Services Administration (GSA) abuses of the taxpayers – including the November 2010 one-day awards ceremony in the nation’s capital that cost more than a quarter of a million dollars, new information about GSA bonuses, and the agency’s recent decision to sign a lease for hundreds of millions of dollars without the required congressional approval -- was the focus of a Transportation and Infrastructure Committee hearing today.

The following are the statements of Economic Development, Public Buildings and Emergency Management Subcommittee Chairman Jeff Denham (R-CA) and Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) from today’s hearings:

Chairman Denham’s Statement

Thank you Chairman Mica for your leadership on these issues.  I want to thank Mr. Miller for informing this Committee of the FAS conference and for his ongoing investigations. 

It is critical that when waste of taxpayer dollars is found, it is appropriately reported.

And, while I appreciate Ms. Metzler for appearing here today, I would have expected the Acting Administrator, the Deputy Administrator or even the General Counsel to appear, someone who can accurately and adequately answer for the serious matters of waste and abuse that we convened this hearing to resolve.

This hearing is not just about conferences and out of control spending on bonuses – with 77 conferences in just 18 months and bonuses that exceed most salaries – those are bad enough.

This hearing is also about the billions wasted on vacant federal buildings, and GSA’s wasteful management of properties.  For example, the GSA continues to push forward on a project that is unreasonable and unnecessary in today’s economy and our $15 trillion national debt: the Los Angeles courthouse project.  When GSA is not busy taking vacations in Las Vegas, they continue to build bigger courthouses than Congress authorizes, to the tune of $400 million.

This hearing is about an agency that, frankly, seems out of control and refuses to respond to basic questions of this and other committees.

Just last month, GSA decided to flagrantly disregard 40 years of legal precedent and enter into a lease binding the taxpayer to hundreds of millions of dollars of lease payments without authorization to do so. 

GSA submitted an incomplete prospectus within hours of our June markup and then subsequently failed to provide this committee with basic information about the lease.  Yet, ignoring this, GSA decided to enter into a lease, without authorization, costing the taxpayer more than $350 million.

To make matters worse, in response to a letter sent by myself, Chairman Mica and Chairman Emerson of the appropriations subcommittee requesting that GSA explain on what basis it proceeded with signing the lease, we get an email from GSA staff that failed to respond to the official request.

Either GSA had a basis on which it ignored 40 years of precedent or it didn’t. 

Even after explicitly asking for this information, we still do not know. I am hopeful that GSA will provide us with the answers we need to impart adequate oversight and take steps to ensure this does not happen in the future.

It is inconceivable to think that an agency that wastes taxpayer dollars on lavish conferences and exorbitant bonuses would be able to commit the taxpayer to billion-dollar leases without any oversight.

Today, we are here to review the mismanagement and wasteful spending of GSA, but we must and we will go further and enact real reform with this agency.

We don’t want explanations from GSA, excuses or justifications. We want change and thorough reform at the GSA, not some negligible change, but thorough inside-out reform that considers the value of each and every hard earned taxpayer dollar spent on leases, programs, bonuses, and conferences.

I will continue to work with my colleagues on both sides of the aisle who are equally troubled by past and present GSA actions as well as my colleagues from other committees who have also requested reviews and information from GSA and the Inspector General regarding waste and abuse allegations.

I will not be satisfied until I see real transparency and reform, and I will continue to work with the Committee and with other Members of Congress to take money and resources away from GSA so they are not able to repeat their mistakes. I anticipate these measures will be taken before the year’s end.

 

Chairman Mica’s Statement

We are holding today’s hearing because the latest round of GSA spending abuses has called into question GSA’s ability to safeguard taxpayer money. 

After the Inspector General revealed the $800,000 dollar Vegas vacation – complete with clowns and mind-readers – GSA tried hard to claim the problem was limited to one regional office and the guy in the hot tub.  Given the Committee’s work on GSA’s empty buildings and growing administrative costs, we suspected the Vegas conference was just the tip of the iceberg.

Thanks to the Inspector General and several Freedom of Information Act requests by the media we know the problems are agency wide.  In the last two weeks we’ve learned about 77 conferences and award ceremonies under IG review, $44 million in out of control bonuses, and GSA’s decision it can spend billions of taxpayer dollars on leases without Congress’ approval. 

Most recently we learned the Federal Acquisition Service spent $270,000 on a one day awards ceremony.  GSA spent $20,000 for drum sticks, $35,000 for picture frames and more than $104,000 for an outside consultant.  And to make matters worse, we understand 3 out of 4 of GSA’s top officials were there – the Federal Acquisition Service Commissioner, the current Public Buildings Commissioner, and the Deputy Administrator.  And because of a Fox News FOIA request, we know GSA handed out over $3 million dollars in bonuses at this ceremony.

But this time nobody blew the whistle.  Why did it take a year and a half and a FOIA request by the Washington Times before this saw the light of day?

And why did it take a WUSA Channel 9 reporter’s FOIA request to find out about $44 million in unreported bonuses in 2011?  The Committee was told Hot Tub Neely received a $9,000 bonus in 2011, but according to this Freedom of Information Act request his bonus was $16,000.  And the list goes on: a $50,000 bonus for a Regional Commissioner under investigation for the Vegas conference with a total compensation of $240,000; an employee with a base salary of $84,000 earned $115,000 in over-time; a $79,000 bonus for one employee with a total compensation of nearly $260,000; and multiple $50,000+ bonuses.

This despite the Administration’s own guidance in 2011 that directed agencies to manage their awards ‘In a manner that is cost-effective for agencies and successfully motivates strong employee performance.’

According to another Channel 9 FOIA request the federal government paid $439 million dollars in bonuses to 1.3 million federal employees last year.  Now GSA is supposed to be the experts, the watchdogs of taxpayer money.  Yet GSA – which has 1% of the federal employees – took home 10% of the bonuses.

This is outrageous.  Here you have an entire agency of procurement experts working the system to take home 10 times more in bonuses than the rest of the government.  If you look at this list, it appears most senior managers are involved.  This is not isolated to Region 9 and Jeff Neely.

Maybe GSA’s internal waste explains the billions of dollars it wastes mismanaging vacant and under-utilized federal properties across this country.  This committee will hold its next hearing highlighting the millions GSA wastes by sitting on empty buildings, in an empty courthouse in Miami on Monday, August 6th.

And, now, it appears GSA believes it can ignore 40 years of legal precedent and sign a lease binding the taxpayer to $350 million without authorization.

If GSA cannot even stop wasteful spending on drum sticks or trips to the South Pacific, the idea of entrusting GSA to bind the taxpayer to billion dollar leases – without authorization from anybody – is completely unacceptable.

And, on top of this, private sector witnesses are afraid to testify – afraid that GSA will penalize them and their companies for working with the Committee on identifying waste.

This agency is simply out of control and we need to fix it. 

For more information from today’s hearing, including video and witness testimony, click here.

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