[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                     GSA'S SQUANDERING OF TAXPAYER
                         DOLLARS: A PATTERN OF
                    MISMANAGEMENT, EXCESS, AND WASTE
=======================================================================

                                (112-81)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 17, 2012

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey            Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana         DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
    Tennessee
                                ------                                7

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                   JEFF DENHAM, California, Chairman
TIMOTHY V. JOHNSON, Illinois         ELEANOR HOLMES NORTON, District of 
ERIC A. ``RICK'' CRAWFORD,               Columbia
    Arkansas,                        HEATH SHULER, North Carolina
  Vice Chair                         MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois             RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      DONNA F. EDWARDS, Maryland
PATRICK MEEHAN, Pennsylvania         BOB FILNER, California
RICHARD L. HANNA, New York           NICK J. RAHALL II, West Virginia
CHARLES J. ``CHUCK'' FLEISCHMANN,      (Ex Officio)
    Tennessee
JOHN L. MICA, Florida (Ex Officio)
                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                               Panel One

Hon. Brian D. Miller, Inspector General, U.S. General Services 
  Administration.................................................     9
Susan Brita, Deputy Administrator, U.S. General Services 
  Administration.................................................     9
Alison L. Doone, Chief Financial Officer, U.S. General Services 
  Administration.................................................     9
Robert A. Peck, Former Public Buildings Service (PBS) 
  Commissioner, U.S. General Services Administration.............     9
Lisa Daniels, Event Planner, Public Buildings Service, U.S. 
  General Services Administration................................     9

                               Panel Two

Hon. Brian D. Miller, Inspector General, U.S. General Services 
  Administration.................................................    82
Hon. Daniel Tangherlini, Acting Administrator, U.S. General 
  Services Administration........................................    82
Martha N. Johnson, Former Administrator, U.S. General Services 
  Administration.................................................    82
David Foley, Public Buildings Service Deputy Commissioner, U.S. 
  General Services Administration................................    82

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon Elijah E. Cummings, of Maryland..............................   117

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Brian D. Miller.............................................   119
Susan Brita......................................................   123
Alison L. Doone..................................................   125
Robert A. Peck...................................................   127
Lisa Daniels \1\.................................................
Hon. Daniel Tangherlini..........................................   132
Martha N. Johnson................................................   141
David Foley \1\..................................................

                       SUBMISSIONS FOR THE RECORD

Hon. John L. Mica, a Representative in Congress from the State of 
  Florida, request to submit list entitled, ``Timeline of 
  Investigation and Ongoing Travel Abuses''......................     6
Hon. Brian D. Miller, Inspector General, U.S. General Services 
  Administration, request to submit report entitled, ``Management 
  Deficiency Report: General Services Administration Public 
  Buildings Service 2010 Western Regions Conference,'' Office of 
  Investigations, Office of Inspector General, U.S. General 
  Services Administration, April 2, 2012.........................    10
Hon. Daniel Tangherlini, Acting Administrator, U.S. General 
  Services Administration, responses to questions from Hon. 
  Patrick Meehan, a Representative in Congress from the State of 
  Pennsylvania...................................................   137

----------
\1\ Lisa Daniels and David Foley did not submit written 
  statements.
  [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
  

                     GSA'S SQUANDERING OF TAXPAYER



                         DOLLARS: A PATTERN OF



                    MISMANAGEMENT, EXCESS, AND WASTE

                              ----------                              


                        TUESDAY, APRIL 17, 2012

                  House of Representatives,
              Subcommittee on Economic Development,
        Public Buildings, and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 8:35 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. The subcommittee will come to order. At the 
request of the Administration, we are going to change things up 
a little bit this morning. We are going to have two panels 
today. The first will include the Honorable Brian Miller, GSA 
inspector general; Ms. Alison Doone, GSA chief financial 
officer.
    At this time, we are going to clear the panel during 
opening statements. Also, at this time, I ask unanimous consent 
that members of the Committee on Transportation and 
Infrastructure who are not on the Subcommittee on Economic 
Development, Public Buildings, and Emergency Management be 
permitted to sit with the subcommittee at today's hearing, 
offer testimony, and ask questions. Without objection, so 
ordered.
    If you will just grab your name tags and sit in the 
audience for now, we are going to go through opening 
testimonies and then we are going to swear everybody in in a 
different fashion this morning, and then bring you up to 
testify yourselves.
    Two weeks ago the inspector general released a scathing 
report on a GSA conference that cost taxpayers nearly a million 
dollars. We have seen a lot of reports about the Las Vegas 
lavish vacation, the spending, and I appreciate Mr. Cummings, 
Ranking Member Cummings on the Government Oversight Committee, 
as well as Chairman Issa for discussing in great detail those 
lavish expenditures and the wrongdoing that happened with the 
Las Vegas vacation.
    The purpose of this committee is to talk about the systemic 
problem, how deep it goes; the corruption, the fraud, the 
waste. It is not just within the Western Region, but within GSA 
as a whole, and possibly within other agencies.
    This committee is going to lay out a timeline of how many 
trips, how many people, how much money. We are going to talk 
about how big of a problem this is and how deep within the 
Administration it goes. Now, you heard yesterday the testimony 
of Mr. Robertson, the Chief of Staff, who is also the White 
House liaison, and was on Senator Obama's personal staff.
    We are going to hear today from Mr. Peck, who for the last 
year-and-a-half I have asked, I have requested, on a bipartisan 
level, with Ms. Norton, we have sent emails, memos, held 
hearings, and asked for a budget that is outside of Congress' 
purview. We have been held up for far too long. And I am here 
to tell you the buck stops here. We are not going to hold up 
any longer. The American public demands to see the budget on 
the public buildings fund, the Federal buildings fund, and how 
that money has been spent. This slush fund is no longer going 
to be used for personal uses. When Federal buildings, when 
other agencies pay rent into this personnel building fund, it 
is meant to redevelop. It is meant to sell off, which we have 
been attempting to do for the last year-and-a-half, sell off 
the properties that are unused, underutilized and redevelop, 
put people back to work where we can by utilizing these funds.
    The public has a right to know how much money is in this 
fund, where it has been used, a full accountability of the past 
and, most importantly, what is going to happen in the future. 
We are going to hear from the new administrator, Mr. 
Tangherlini, this morning about what has been done to reprimand 
those that have been involved.
    But again, this goes much deeper than what has already 
happened; those that have been fired, those that have been put 
on administrative leave, those that have resigned. The American 
public deserves to have money paid back. And where crimes have 
been committed, people will go to jail. And if we have to have 
future hearings on this topic, you bet we will. This is about 
the distrust of the American public in its Government. This is 
about the waste of taxpayer dollars. And if you can sense my 
anger and frustration, you should see it at home, where we have 
got double-digit unemployment, the highest foreclosure rate in 
the Nation, people out of work, twice the national average. And 
to see these types of expenditures, to see the stonewalling by 
this agency for the last year-and-a-half hiding from the public 
the expenditures that have been made, and what has happened 
with this public buildings fund.
    You bet it is an outrage. And I am looking forward to full 
testimony this morning to get to the bottom of it.
    I am angered not only at the waste of money, but the fact 
that there would be people that the systemic issue here is that 
you would actually go out and brag about it; that you would 
insult the ranking member and former chair of this committee, 
who chaired the committee while you will were having this 
vacation; that you would laugh about our Commander in Chief and 
laugh about how you would spend this money. This goes down from 
the interns to those at the top, and it is a culture that we 
are going to get to the bottom of, and let me just issue a 
warning. If this continues to go on, if we continue to not only 
see this type of spending, we will continue to audit. If we 
continue to see that you are not giving us the information on a 
bipartisan level to show us how these expenditures are 
happening, I am prepared to systematically pull apart GSA to 
the point where we will make it a question to the American 
public on whether GSA is needed at all. But the wasteful 
spending is going to stop, and the transparency is going to 
begin.
    I would now like to recognize the ranking member, Ms. 
Norton, for any opening statements she may have.
    Ms. Norton. Thank you, Mr. Chairman. Our subcommittee has 
just returned from a scheduled recess, but we are obligated to 
turn at once to the General Services Administration inspector 
general and others today for testimony about the 2010 Western 
Regional Conference, a conference run amuck near Las Vegas, 
Nevada.
    The final IG report found that expenditures related to the 
conference were, and here I am quoting, ``excessive, and 
wasteful, and that in many instances GSA followed neither 
Federal procurement laws nor its own policy in conferences.'' 
End quote.
    Some who planned the conference appeared to have 
deliberately set out to have a boondoggle of a conference, and 
explicitly to go ``over the top''; in the words of one 
conference planner, hiring mind readers and clowns and having 
dinner and a talent show in the desert at taxpayers' expense. 
The expensive partying at a four-star casino resort occurred 
before the recovery began to take hold and as millions of 
Americans were living hand to mouth, struggling under debts, 
and the worst recession since the Great Depression.
    The emerging evidence shows that the conference had been 
building in extravagance for years, but in the last 10 years 
had escalated considerably. Only now is the full extent of the 
spending coming to light. Moreover, coupled with the conference 
scandal are reports by the IG of a Federal employee awards 
program in the same region with little or no controls, 
resulting in yet more excessive spending.
    The awards program, apparently helped feed the exorbitant 
conference in Nevada, providing iPods and other desirable 
technology to employees for non-work related matters. I am 
perhaps more shocked and saddened than most because I have sat 
on this subcommittee for more than 20 years and, by and large, 
have found GSA appointed officials and civil servants alike, 
including some of those named in the IG report, to be among the 
most dedicated and professional Federal employees. It is 
particularly disappointing that the actions of a few officials 
have cast a shadow over the hard work and professionalism of 
the great majority of GSA employees.
    I am grateful to the President for asking immediately to 
take out the top officials and bring in Daniel Tangherlini, a 
professional of proven management skill and impeccable ethics.
    Further, it was a political appointee of the administration 
who first alerted the IG when she saw signs of possibly 
excessive expenditures and employee misconduct in connection 
with the 2010 conference. The result was the investigation 
which outlined the wasteful spending that is the subject of 
today's hearing.
    The GSA administrator resigned, two top political 
appointees that were overseeing the Public Buildings Service 
were discharged, and the civil servants who were responsible 
for planning the conference were placed on administrative leave 
pending disciplinary proceedings as required by law.
    The underlying behavior was indefensible, but the system 
that was designed to identify and punish that behavior works. 
Work remains that may involve considerable reform and even 
restructuring of the agency. I look forward to hearing from GSA 
officials about the steps they themselves believe must be 
taken.
    Thank you, Mr. Chairman.
    Mr. Denham. At this time, I would like to recognize the 
chairman of the full committee, Mr. Mica.
    Mr. Mica. Well, first of all, I have to thank you, Mr. 
Denham, for your leadership and for not just on this--not just 
on this issue and the outrageous matter that is before us, but 
from the very beginning when I had to select someone to chair 
this subcommittee that oversees public buildings, I think the 
country was fortunate to have you and your experience and 
leadership, and I think when we met our first assignment was to 
pick up what we had discussed we would do before you got here 
in the minority and we published this report.
    This report basically was October, ironically, of 2010, the 
same time that they were spending money on their GSA lavish 
convention. But this report is entitled ``Federal Government 
Must Stop Sitting on Its Assets.'' It is online, and I hope you 
all get a chance to read it. The first part starts right out 
with GSA and the abuse of not just millions of dollars in a 
convention junket, but billions of dollars in waste.
    This was our primer, and I couldn't have had a better 
partner than Mr. Denham. One of the very first hearings this 
committee did, and I asked him to help lead, was in the vacant 
annex building next to the post office, vacant for almost 15 
years, between that and the Old Post Office, losing $6 million 
a year. Put this in perspective. Here again, I reference this 
document. So this isn't the Johnny-come-lately hearing or 
attempt to get an agency under control.
    We held the first hearing in that empty building. It was 32 
degrees outside, 38 degrees inside. The picture you can see 
here are the GSA bureaucrats with their coats on because we 
brought them down to the empty building to try to get a $6 
million-a-year loss, again two blocks from the White House, a 
Federal building. There is the empty building that we held the 
hearing in, and get it turned around, and make it a productive 
property.
    The Federal General Services Administration is our 
Government's landlord. It is appalling to see the wasteful 
spending, of course, on this conference that Mr. Denham will 
outline, not just this conference. He is going to talk about 
trips to Hawaii, Atlanta, junkets to the South Pacific, 
California, Atlanta, Hawaii, Guam, Saipan, all at taxpayers' 
expense. But that is just the tip of the iceberg. The billions 
that are lost, again, by having the Federal Government's 
primary landlord agency out of control and not operating as it 
should and making these assets perform for the public is what 
is outrageous.
    You know, we smelled a rat, and we asked for data, because 
if you look at the budget, and the expenditures for the public 
buildings commissioner, they went from $2.9 million in 2007 to 
$9 million. That is what, 200- or 300-percent increase? So we 
started asking for data. We got stonewalled time and time 
again. Mr. Denham asked at almost every hearing, you heard him 
say, we requested information and data.
    What we got instead, this is what we got instead, folks, 
just a few pages of the top numbers. Anyone can see now why 
they didn't want to disclose what was going on. Ms. Norton 
said, and I agree, we have thousands of people who work for the 
Federal Government who work day in and day out and do a good 
job. This is not an example of the average performance of our 
Federal employees. We have some incredible men and women.
    We are going to hear from one of them today, Susan Brita. 
She worked on this committee. When you see the timeline of what 
took place, you see a timeline of coverup, a timeline of 
deceit, a timeline of keeping Congress in the dark on what was 
going on, you see one woman who stood up. This conference was 
held in, what, October 10th in Las Vegas. In November she 
requested the IG, the Office of Inspector General, to look into 
this matter. You see yesterday, and our committee has 
legislative oversight responsibility for public hearings, and 
we coordinated this very well with Mr. Issa because he has 
broader jurisdiction over the White House and others that we 
don't have. And you saw yesterday and in the timeline that the 
White House knew about this in June of 2011. That is great for 
the President and others to condemn the action in the last week 
or two. They have known for nearly a year of what was going on. 
And again, our former staffer not only went to the IG on this, 
but other matters, and that is detailed and I will submit this 
list for the record, Mr. Chairman, without objection.
    Mr. Denham. Without objection.
    [The information follows.]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Mica. You know, it is kind of upsetting in a way, and 
it should be upsetting to the American people that this has all 
been revealed, and maybe it wouldn't have been revealed. It 
probably could have all been swept under the table but for one 
person who stood up, and I want to hear from her today. I hope 
they haven't intimidated her. I hope that she feels secure, and 
I hope that she realizes that we recognize her patriotism in 
stepping forward and, again, revealing what was going on. 
Because otherwise, we might not have known. We have would been 
handed one sheet and said don't pay attention.
    When I announced I was going to do hearings on this, I was 
pretty saddened by the comments of the majority leader of the 
U.S. Senate. He said Mica needs to get a life. Well, I want to 
tell him and others that I have a life, and that is dedicated 
to uncovering waste and inefficiency in Federal Government and 
bringing business-type commonsense practices to whether it is 
GSA or other Federal agencies.
    So we were stonewalled. We were delayed. We were not given 
information, but the American people need to know that this is 
just the tip of the iceberg and they will hear much more about 
what is going on and what needs to be done to reform this 
agency, or to replace it. Mr. Denham and I had a discussion 
last night. Maybe it is time to look at a total replacement.
    How many of you out there, how many of you out there, if 
you have property, would turn it over to the Federal Government 
to manage for you? I ask you that question. Not very many of 
you. And as you see the wasteful overhead and cost and what 
takes place when you are on the taxpayers' dime, it is even 
more offensive.
    So with that, again, I thank Ms. Norton for her 
cooperation, Mr. Denham for his leadership, and other Members 
for being with us today.
    Mr. Denham. In deference to the Administration's request, 
we will swear in those that have been fired, put on 
administrative leave, or resigned together at this time. I 
would like to request Ms. Johnson, Mr. Peck, Mr. Foley, and Ms. 
Daniels to please rise. Stand and raise your right hand and be 
sworn in under oath.
    [Witnesses Johnson, Peck, Foley, and Daniels sworn.]
    Mr. Denham. We will have two panels today. The first panel 
includes, and I invite you back to the table, the Honorable 
Brian Miller, GSA inspector general.
    Mr. Mica. Mr. Denham, Chairman Denham, I would just like to 
insert at this point in the record this comment, and note for 
the record, that Mr. Neely is not with us today. We had 
requested that he be with us. And he has, I guess, taken the 
Fifth in another committee and is not appearing today against 
one of the requests that at least I made for him to be with us. 
I guess the only way we will get to see him is on a video in 
the hot tub, so, but I want to make certain that it is noted in 
the record that he did not appear.
    Mr. Denham. Mr. Miller; Ms. Susan Brita, GSA deputy 
administrator; Ms. Alison Doone, GSA chief financial officer; 
Mr. Robert Peck, former Public Buildings Services commissioner; 
Mr. Neely is--Chairman Mica has already said Mr. Neely, through 
his attorney, has refused to appear this morning; and Ms. Lisa 
Daniels, the event planner for Public Buildings Service.
    Would you join us at the table up front. I ask unanimous 
consent that our witnesses' full statements be included in the 
record. Without objection, so ordered. Since your written 
testimony has been made part of the record, the subcommittee 
would request that you limit your oral testimony to 5 minutes. 
And as far as this committee today, we will be going by the 
strict 5-minute rule. We have a lot of questions.This is going 
to be a very long hearing. We want to make sure that we have as 
many opportunities to go through Members' requests as possible.
    Mr. Miller, you may proceed.

TESTIMONY OF THE HONORABLE BRIAN D. MILLER, INSPECTOR GENERAL, 
   U.S. GENERAL SERVICES ADMINISTRATION; SUSAN BRITA, DEPUTY 
ADMINISTRATOR, U.S. GENERAL SERVICES ADMINISTRATION; ALISON L. 
     DOONE, CHIEF FINANCIAL OFFICER, U.S. GENERAL SERVICES 
ADMINISTRATION; ROBERT A. PECK, FORMER PUBLIC BUILDINGS SERVICE 
 (PBS) COMMISSIONER, U.S. GENERAL SERVICES ADMINISTRATION; AND 
  LISA DANIELS, EVENT PLANNER, PUBLIC BUILDINGS SERVICE, U.S. 
                GENERAL SERVICES ADMINISTRATION

    Mr. Miller. Good morning, Chairman Denham, Chairman Mica, 
Ranking Member Norton. Thank you for inviting me here this 
morning to testify about our report. I think everyone is 
familiar with the facts of our report. OK, and so I would 
simply ask that my written statement and the report itself be 
included in the record. I would be happy to answer any 
questions. Thank you.
    [The report follows. Please see the table of contents for 
the section entitled, ``Prepared Statements Submitted by 
Witnesses'' for Mr. Miller's statement.]
[GRAPHICS NOT AVAILABLE TIFF FORMAT]

    Mr. Denham. Without objection, so ordered. Ms. Brita, you 
may proceed.
    Ms. Brita. Good morning, Chairman Mica, Chairman Denham, 
Ranking Member Norton, thank you for inviting me to testify 
here this morning.
    Mr. Denham. Pull the microphone up.
    Ms. Brita. Can you hear me now? How about this? Better? It 
is hard being on this side of the dais. As you all know, I 
spent 18 years on this committee working with all of you in a 
bipartisan manner to conduct oversight on a variety of general 
Government management issues, but with an emphasis on the 
operations of the General Services Administration.
    On February 2nd, 2010, I had the honor of being appointed 
by President Obama to the position of deputy administrator at 
the General Services Administration. During my 18 years with 
this committee there were many serious issues that this 
committee addressed, but none rises to the level of the 
wasteful spending and lack of management associated with the 
Western Regions Conference. As deputy administrator, as a civil 
servant, and as a taxpayer, I share your anger and 
disappointment in GSA's conduct. When I first became aware of 
the excessive spending related to the Western Regions 
Conference, I requested that the GSA's Office of Inspector 
General conduct a review of these allegations. I am grateful to 
Mr. Miller and his office for the work that they did in 
uncovering and reporting these abuses. I believe the inspector 
general's report warranted immediate corrective action within 
GSA, and I advocated for such action. I am committed to working 
with acting administrator, Mr. Tangherlini, to restore faith in 
the agency, not only to members of this committee, but also to 
colleagues and other Government agencies and more importantly 
to the American taxpayer.
    I look forward to answering any questions you may have.
    Ms. Doone. Good morning, Chairman Denham, Chairman Mica, 
Ranking Member Norton, and members of the subcommittee. My name 
is Alison Doone, and I am the chief financial officer of the 
General Services Administration. I appreciate the opportunity 
to come before the committee today.
    I have served as the GSA's CFO since September 27th, 2010. 
Before arriving at GSA, I served at the Internal Revenue 
Service for 5 years as a CFO and deputy CFO where I oversaw the 
financial management and accounting operations for a $12 
billion budget and $2.3 trillion in tax revenue. I also have 
held executive positions as deputy staff director and CFO of 
the Federal Election Commission and deputy assistant 
administrator at the Office of Finance at the Drug Enforcement 
Administration.
    Until the acting administrator's recent action to 
centralize oversight financial management, GSA's financial 
management operations were decentralized and were managed by 
autonomous regional CFOs with no oversight or control by my 
office. The budget and all costs for the Western Regions 
Conference were approved by employees in the Pacific Rim 
Region, including those in the regional budget and financial 
management division, commonly referred to as the region's 
``CFO,'' and not by anyone in the GSA office of the CFO. This 
decentralized organizational structure of GSA financial 
operations increased the risk of these types of abuses at the 
regional conference and in the Hats Off Program.
    In my experience at IRS, and other Federal agencies, the 
agency CFO had far more oversight and control. To correct these 
issues, the acting administrator has already taken strong 
action by realigning all Public Buildings Service regional 
budget and financial management operations under the direct 
authority of GSA's CFO. In addition to this strengthening of 
the internal control environment, the acting administrator is 
reviewing employee relocations, will require all future 
relocations to be approved by both the chief people officer and 
the CFO, and has closed the Pacific Region Rim Hats Off Store, 
as well as all similar programs.
    In addition to the actions taken by the acting 
administrator, I added two controls to CFO processes. First, 
CFO is now performing an additional review of selected approved 
invoices before payment to verify appropriateness of the 
expenditures. The second control is the addition of a monthly 
review of obligated amounts compared to budgeted amounts to 
ensure expenditures are within budget. These additional 
controls, together with centralization of budget and financial 
management operations, will greatly improve our ability to 
prevent the abuses described in the IG report. I welcome the 
opportunity to answer questions.
    Thank you.
    Mr. Denham. Thank you. Mr. Peck.
    Mr. Peck. Good morning, Chairman Denham, Chairman Mica, 
Ranking Member Norton, and members of the subcommittee. My name 
is Robert A. Peck. Until earlier this month, I served as the 
national commissioner of the Public Buildings Service of the 
GSA, having served in that role previously from 1995 to 2001.
    I am deeply troubled and disappointed about what I have 
learned about the costs associated with the GSA Western Regions 
Conference held in October of 2010. There were excessive and 
inappropriate costs that should never have been incurred. Those 
planning it made fundamental errors of judgment. It is also 
troubling that procurement policies, travel policies, and other 
agency procedures appear not to have been followed.
    While I was not personally involved in planning, 
conducting, or approving the conference, and the unacceptable 
conference expenditures described in the IG report, they took 
place within the PBS on my watch. I am not here to shirk that 
responsibility.
    I am deeply disappointed by what the IG reported. I have 
been removed from the job I loved, and I offer my personal 
apology that some people within the GSA acted as they did. The 
taxpayers deserve better than this. The actions of those 
responsible for the expenditures outlined in the IG report 
failed to meet the obligation we all owe the American people. 
Those actions failed to meet the standards I expected from 
those employed in PBS headquarters and throughout the regions, 
and those actions dishonored the thousands of hard working and 
dedicated Federal employees I have worked with over the years.
    At the GSA, and at other agencies, the Federal employees 
and managers with whom I have worked in my times both inside 
and outside the Government, have overwhelmingly been concerned 
with carrying out their missions within the Government's rules 
at the lowest costs possible.
    As PBS commissioner, I was not involved in planning 
conferences. As a political appointee I had a policy to not be 
involved in the selection of contractors or vendors. In the 
case of 2010 Western Regions Conference, it was a regionally 
organized event, and while I was invited to address the 
conference, I had nothing to do with its planning, nor was I 
involved in approving any part of its spending or program in 
advance. I was present for only a portion of the conference 
before returning to DC.
    As is the case with most large Federal agencies, the GSA 
holds training conferences for its employees. In my many years 
at the GSA, I attended a number of conferences. From what I 
personally saw, the conferences I attended were not 
extravagant. The 2010 Western Regions Conference described in 
the IG's report was a serious aberration.
    When I arrived the first afternoon of the conference I was 
shown to a very large suite. I questioned the organizers as to 
the cost. They told me that all of the rooms were within the 
Government rate, including this room, and that my suite was 
included at the basic room rate as part of the conference's 
package of rooms.
    My first morning at the conference, I made a PowerPoint 
presentation to the entire group about national PBS goals and 
priorities. I attended presentations from the four western 
regions about their projects and performance and another about 
the GSA's sustainability goals.
    That afternoon, I asked the conference organizers to invite 
a number of employees of their choosing to my room. My 
intention was to have a meet and greet with a group of regional 
employees attending the conference. This pre-dinner reception 
went from about 6:00 p.m. to 7:30 p.m. Since this was my 
initiative, rather than an event on the organizers' agenda, I 
said I would pay personally for beer, wine, and chips. I was 
told that food would be made available without additional cost 
under the conference contract with the hotel. The beer and wine 
were purchased separately and upon returning to DC, I wrote a 
check for that cost. Only within the past few weeks did I learn 
from the GSA inspector general that the food for this reception 
was apparently invoiced at $1,960.
    It is not unusual for an IG to issue a report and Federal 
managers count on that as part of our internal oversight. In 
the normal course of events the IG will issue a draft report, 
then the agency will respond, and ultimately the IG will issue 
a final report with its recommendations. The IG's 
recommendations, including those calling for any disciplinary 
action, are ordinarily implemented following the release of a 
final report. In this case, the IG issued a very preliminary 
report last May, and at that time, I understood that the IG 
cautioned the GSA not to take personnel actions until the final 
report was complete. That final report which contained the IG's 
recommendations was just published 2 weeks ago.
    Until the IG's draft report last year, I was not aware that 
there had been numerous planning trips incurred in connection 
with this conference. Nor was I aware until I was recently 
informed by the IG that there were questions about the 
competitive contracting procedures used to find the conference 
hotel. As I have indicated, it is now clear that much of the 
expense at the hotel was excessive and unacceptable. Therefore, 
even before having the benefit of the final IG report, I took 
measures to try to ensure that something like this would not 
happen again.
    In fiscal 2011, in response to this conference, and as part 
of my focus on overhead expenses, I canceled a number of 
nationally controlled PBS conferences, instituted a review of 
PBS outside conference attendance, and took steps to reduce 
spending on travel.
    Further, when I was first interviewed about the conference 
by the IG last month, I invited the IG to audit other travel 
and conferences that PBS had conducted under my tenure.
    I deeply regret the behavior of the GSA employees involved 
in this incident and the damage that this caused. I look 
forward to answering any questions you may have.
    Mr. Denham. As the chairman mentioned, Mr. Neely is not 
with us today. He has used his Constitutional right to plead 
the Fifth Amendment and has hired a lawyer, nor did he testify 
yesterday.
    Ms. Daniels, you are next to testify. Do you have a lawyer?
    Ms. Daniels. I do not.
    Mr. Denham. Can you pull the microphone, please?
    Ms. Daniels. I do not have a lawyer.
    Mr. Denham. I would just issue you a word of caution. I 
read your testimony, and there is a great deal of troubling 
information on there. I would certainly issue caution today as 
you testify.
    Ms. Daniels, you may proceed.
    Ms. Daniels. Good morning. This is my first time at a 
hearing. I am not--I did not prepare testimony because I was 
placed on administrative leave last Wednesday. All of my files 
were confiscated. I was directed to turn in all of my 
Government equipment and cell phone to the Director of HR in 
Fort Worth on Thursday morning. And on Thursday evening, my 
supervisor called me late in the evening and said that I would 
be receiving a letter from the House of Representatives 
requesting my testimony. As you know, I did not provide 100 
copies by close of business. I received my letter at 10:30 on 
Friday morning, and I am not clear what testimony you are 
referring to unless you are referring to interviews that I held 
with the IG, of which I didn't sign anything, other than the 
Garrity warning, and without my files or anything--and I was 
not even sure since the title of this hearing was: ``A Pattern 
of Mismanagement, Excess, and Waste''--I didn't feel 
comfortable without my computer or files to be able to even 
provide testimony to that subject.
    I will be happy to answer any questions.
    Mr. Denham. Ms. Daniels, if you don't have prepared 
testimony, we will allow up to 5 minutes, but I was referring 
to your transcripts and the investigative report that the IG 
did. That is what we have gone through. We got emails as late 
as last night and certainly there is a great deal of concern 
with your transcripts. So you are not obligated to have an 
opening statement, or obligated to go any further than you 
already have, but we certainly afford you that right to up to 5 
minutes.
    Ms. Daniels. I will decline to provide testimony, but happy 
to answer any questions that I can.
    Mr. Denham. Thank you. I will now recognize each Member for 
an additional 5 minutes. We will start the first round of 
questioning.
    Mr. Miller, I want to first start by better understanding 
how you get around rules; how you get around Executive orders; 
how when the President issues an Executive order, how members 
of an agency may disregard those Executive orders and figure 
out a way to get around it.
    So as my staff has put together an outline here for me, 
basically, if you get a large number of people together, in 
this case, Western Regional Conference, 300 people, it gives 
you a reason to have an offsite meeting. Now, certainly you 
could have a meeting in Des Moines, Iowa, or Modesto, 
California, but the whole purpose of having these lavish 
conferences is to go to places like Hawaii, Las Vegas, Palm 
Springs, Napa, New Orleans. That is going to be a good question 
on why the Western Regional Conference would need to go to New 
Orleans, which is not even a Western Regional Conference.
    So you get a lot of people together. It gives you a reason 
to have a conference, and then you go to a luxury resort. How 
much per diem are you supposed to get on a trip?
    Mr. Miller. Per diem varies from place to place. And it is 
listed on the GSA Web site as to how much per diem per day 
individuals would get. For example, in Las Vegas, the per diem 
for breakfast is $12. And it is stated, there is a chart on per 
diem. If your question is, why did they have the conference, 
they--the Western Regions Conference this year, they said that 
they wanted to showcase GSA talent.
    Mr. Denham. Is the per diem cumulative, meaning if you pay 
your own way for the entire week you get a check at the end of 
the week? And is it you get a lunch, a breakfast, a lunch and a 
dinner per diem?
    Mr. Miller. Well, you have to put a voucher in, and you 
would get repaid the money. It is $71 for the whole day in Las 
Vegas. That is for everything, meals and everything. The hotel 
room was $93. So a traveler would come back and submit a 
voucher, and that would be paid back to the traveler.
    Mr. Denham. So if you got a free room or a comp room, you 
could then apply for that $93 at the end of the day?
    Mr. Miller. If you received a free room, you should not 
submit that in the voucher. If you received a free meal that 
the conference provided, you should not submit that in the 
voucher.
    Mr. Denham. And how about appetizers?
    Mr. Miller. Well, we don't think the appetizers were 
appropriate at all. We think that the appetizers were 
impermissible expenses.
    Mr. Denham. And how do you get around that rule to have 
appetizers?
    Mr. Miller. There is a rule that says that if you have an 
awards ceremony and food is necessary for the performance of 
the awards ceremony, you may have food as part of the awards 
ceremony. That was routinely skirted by Region 9.
    Mr. Denham. How often are awards given at these 
conferences?
    Mr. Miller. I would guess fairly often. They gave out----
    Mr. Denham. Once a conference?
    Mr. Miller. At least.
    Mr. Denham. Every day of a conference?
    Mr. Miller. I am not sure if they received an award every 
day. They had----
    Mr. Denham. What type of awards?
    Mr. Miller. Well, they received a number of things. They 
received souvenir coins. Everyone in the region received----
    Mr. Denham. To write off a meal, to write off, to have the 
expense of appetizers or a full meal, whether it is sushi or a 
long list of different types of appetizers we have here, what 
types of awards would be given?
    Mr. Miller. Well, I am not sure that any of those things 
would be appropriate at an awards ceremony. And the rule is 
these--food has to be necessary for the awards ceremony, not 
the other way around. You don't get the food. You don't give 
out an award in order to get the food. You are giving an award 
and you have a ceremony, and if incidental food is necessary 
for that awards ceremony, then it is permissible under the 
rules. It became kind of a running joke.
    Mr. Denham. That is how they felt it was justified.
    Mr. Miller. Yes.
    Mr. Denham. To get around the Administration's rule of not 
having food, they got around it by having an awards ceremony at 
every conference, or every day of a conference.
    Mr. Miller. Many times, in Region 9, witnesses told us that 
it became a running joke with the Region 9 regional 
commissioner, that even at staff meetings, he would say we are 
going to have a meeting in another location and we are going to 
have food, so we have to do what? Senior staff is said to have 
said, give out awards. And so according to witnesses that we 
have interviewed, it was a running joke in Region 9 that in 
order to get food, you had to give out awards. And many of 
these awards were silly awards. One of our witnesses 
characterized them as I guess fake awards and jackass awards, 
and things of that nature.
    Now, getting back to the Western Regions Conference, they 
gave out awards for theatrical performances. We do not consider 
that a proper award. The award has to be for contributions to 
the work of the agency.
    Mr. Denham. How might they also get around the lodging per 
diem limits? How would you get a 2200-square-foot suite or 
several 2200-square-foot suites? How would you get a suite at 
every conference? How would multiple suites be given when it is 
only $93?
    Mr. Miller. Well, suites are provided by the hotel. 
Sometimes as part of the negotiation a hotel will provide an 
upgraded room or suites as part of the negotiation. They will 
throw in what they call comped rooms, if they have a number of 
rooms paid for by the Government, by the conference.
    Mr. Denham. What type of negotiation? How would you justify 
a 2200-square--how in this case would you justify two 2200-
square-foot luxury suites? It must be some large contract. How 
do you get a contract that large?
    Mr. Miller. Well, GSA apparently had a very large contract 
with the hotel. And the large contract with the hotel would----
    Mr. Denham. I am sorry, Mr. Miller, proceed.
    Mr. Miller. With the large contract with the hotel, the 
hotel would throw in a room. And----
    Mr. Denham. So how do you build up a large contract?
    Mr. Miller. Well, GSA had a number of rooms that they were 
renting from that hotel. And----
    Mr. Denham. Rooms alone would allow you to get those large 
luxury suites.
    Mr. Miller. Well, they had catering as well. They had food.
    Mr. Denham. How much catering?
    Mr. Miller. It is detailed in the report. They had 
receptions. They had light refreshments. By the way, light 
refreshments are allowed in between sessions at a conference 
according to the rules. The report identifies food 
expenditures. On page 9 of the report, we have identified 
$146,527 of expenditures on food and beverage catering.
    Mr. Denham. Let me move on. We are short on time here and 
we are going to try to stick to the 5-minute rule. If you have 
luxury suites, how would you bring your entire family and 
friends? How would you have a 21-year-old birthday party for 
your daughter? How would you have all of these various friends 
and family gatherings, extended stays on these different trips?
    Mr. Miller. Well, they would have to be a gift from the 
hotel. The hotel would provide an upgraded room, or a suite, 
and if you are in the middle of negotiating a contract with the 
hotel, that might be conceived as a gift from the hotel.
    Mr. Denham. So let me ask you. If you set up a contract and 
said our per diem rate is $93, that is how much we can spend on 
lodging. We would like to have 5 days at $93 but we are going 
to spend several hundred thousand dollars on appetizers. We 
would like to extend our stay on the front-end and the back-end 
and create a 9-day trip out of that. And by the way, we would 
like 2200-square-foot rooms so that we can bring our family and 
friends and throw a party there on the weekend. Is that 
possible?
    Mr. Miller. Not under the regulations. Not under the rules.
    Mr. Denham. Is it possible under what you have seen in your 
investigation?
    Mr. Miller. Yes. Yes. In fact, I think that does describe 
what happened. What you are talking about is essentially 
inappropriate relationships with vendors. And an inappropriate 
relationship with the hotel would be to go to the hotel and ask 
for favors that benefit the individuals personally. And all of 
that is improper. It is appropriate to negotiate a good rate 
for the food, appropriate food under the rules, but it is 
inappropriate to negotiate with vendors for personal benefits. 
That would--you are not allowed to use your office for personal 
gain.
    Mr. Denham. Nor can you accept----
    Mr. Miller. Correct.
    Mr. Denham. Many other perks were accepted here. I am out 
of time. I want to definitely go back to this a little bit 
deeper, but at this time I recognize ranking member, Ms. 
Norton, for 5 minutes.
    Ms. Norton. Thank you very much, Mr. Chairman. Mr. Miller, 
what the chairman has just described, if someone in Region 9 
wanted to know whether or not what they were doing was within 
the rules under the present structure, would they turn to--who 
would they turn to in Region 9?
    Mr. Miller. Is that directed towards me?
    Ms. Norton. Yes. Or to you or Ms. Brita. In Region 9, if 
what the chairman described, if someone wanted to know, is this 
within the rules, who would they go to to find out in Region 9?
    Mr. Miller. They have regional counsel in Region 9, and 
regional counsel was consulted at least once about the 
possession of the----
    Ms. Norton. And what did regional counsel say?
    Mr. Miller. I believe that regional counsel provided an 
opinion that the regional commissioner requested was not in 
writing, and if you can hold on a minute--they provided an 
unwritten opinion about bicycles, when the charity----
    Ms. Norton. Because there was an inquiry about the 
bicycles, but not about other things.
    Mr. Miller. Well, the regional commissioner asked about the 
bicycles----
    Ms. Norton. Yes.
    Mr. Miller [continuing]. Because it would involve disposal 
of Federal property.
    Ms. Norton. Yes. Mr. Neely is not here. Did he have the 
final authority on the matters, for example, just described by 
the chairman, or was there someone above him who had some 
authority and to whom he reported on matters of the kind that 
have just been described?
    Mr. Miller. Well, at the time of----
    Mr. Denham. Can I clarify Ms. Norton's point. They asked 
for legal opinion on the bicycles, correct?
    Ms. Norton. Only.
    Mr. Miller. Yes, they did.
    Mr. Denham. And what was the legal opinion?
    Mr. Miller. The legal opinion was that if the charity 
maintained the bicycles it would not be disposal of Federal 
property.
    Mr. Denham. And was that in writing?
    Mr. Miller. No, it was not in writing.
    Mr. Denham. Is it normally in writing?
    Mr. Miller. Yes, it is. The regional commissioner requested 
that it not be in writing to avoid any obligation under FOIA.
    Mr. Denham. Is that in writing?
    Mr. Miller. I believe we have--we have some evidence of 
that. I am not sure if it is a direct writing or not. But we do 
have evidence of that.
    Mr. Denham. Tried to cover it up after they made the 
request?
    Mr. Miller. Well, he requested that it not be in writing.
    Mr. Denham. Thank you. I am sorry.
    Ms. Norton. So the counsel himself didn't want his opinion 
in writing? What I am trying to establish, who was the 
operating officer who was in charge of this conference, and 
whether he, in fact, had to report what happened in the 
conference, or had to ask for any permission, or whether he was 
an island unto himself who had control in Region 9 over the 
matters that we have just heard about?
    Mr. Miller. What we found in our investigation was that the 
regional commissioner essentially controlled everything, and 
that he was the final say-so. He was acting regional 
administrator at the time. There was little oversight or 
supervision by central office and, you know, as a practical 
matter, the regional commissioner decided----
    Ms. Norton. Yes, well, I am going to have--I am going to 
have questions for Mr. Tangherlini and Ms. Johnson about the 
structure of GSA, which is very troubling in this regard. I 
would like to ask Mr. Peck a question.
    Mr. Peck, there are many who have come to your defense. I 
have known you in this administration, or prior administration. 
And so it is unusual for people to publicly speak well of 
someone who has had--has encountered what you have and been 
discharged by the President. Do you understand why the 
President took out the top of the agency and do you believe 
that that was the right thing to do and the fair thing to do?
    Mr. Peck. I understand why he did it. And as I said in my 
testimony, I was--it was on my watch. I was brought up in a 
military family. I was an Army officer and I subscribed to the 
axiom that someone in charge is responsible for everything 
their organization does or fails to do.
    Ms. Norton. I just want that on the record. The way in 
which--normally in this country, it doesn't operate the way it 
does in parliamentary democracies, where the top resigns. 
Somehow in our country, often only people who have hands on but 
not direct authority are the ones held culpable. So I can 
understand the feelings for you, but in light of how structures 
should be structured in this country, I understand your 
response.
    There is a question, Mr. Peck, about the letter of 
reprimand for Mr. Neely. We just heard that Mr. Neely was 
essentially an island unto himself. You didn't know anything 
about him. But when it became known, you believed he deserved 
only a letter of reprimand. I mean, he may be facing 
termination now. He may be facing criminal charges. What made 
you believe that what is one of the lightest forms of penalty, 
given his large responsibility, regional administrator, and 
commissioner, that a letter of reprimand was all that should 
take place here, especially when you say you understand why the 
President would fire you and other top officials because of the 
responsibility that the top must have for what goes on and 
those charged to him?
    Mr. Denham. Mr. Peck, I would allow you to answer, but I 
would ask you to be brief.
    Mr. Peck. Yes, sir. I believed it was the appropriate 
response at that time. The IG investigation was ongoing. It was 
my impression, and I think I have seen documentation since, 
that the IG was asking us not to take disciplinary action 
against anyone involved in this until the IG----
    Ms. Norton. Well, I thought it said do not take any 
personnel action, and that is a personnel action, isn't it?
    Mr. Peck. The letter?
    Ms. Norton. Yeah.
    Mr. Peck. Well, I am not sure the letter was actually sent. 
There was a great deal of conversation about what we could and 
could not do at that time given what we knew about Mr. Neely.
    The other thing I will just note is that a lot more facts 
have come out since about what happened at that conference. But 
we certainly----
    Ms. Norton. So you still believe he deserved only a letter 
of reprimand?
    Mr. Peck. Oh, no. Not based on what I know now, no.
    Ms. Norton. No, at the time, what you knew about the 
conference, you think he deserved no more than a letter of 
reprimand?
    Mr. Peck. No. At the time, we took it into account in--I 
took it into account in his rating. I spoke to him, I spoke to 
the other regional commissioners about conferences, I took 
other actions. At that time, given what we knew about what had 
happened at the conference, particularly with respect to him--
and we didn't know a lot of other things about his travel 
expenditures and other things--we thought that that was an 
appropriate response at that time. It was kind of like a shot 
across the bow rather than a final action.
    Mr. Denham. Thank you, Mr. Peck.
    Chairman Mica?
    And before we do, in consulting with Democrats in a 
bipartisan fashion, we have made a determination that, Ms. 
Daniels, after receiving a transcript over the last 48 hours, 
it is in our judgment on a bipartisan level that we will excuse 
you at this time. I would advise you, as chairman of this 
committee, you ought to seek legal counsel. You are dismissed.
    Chairman Mica?
    Mr. Mica. I thank you.
    First of all, Ms. Doone, an expenditure that rises about 
300 percent for the public buildings commissioner's 
expenditures, from $2.9 million to $9 million, does that raise 
any flags to you, a 300-percent increase? Actually, it is in 
about 2 years because it was about $3.2 million in 2009.
    Ms. Doone. I am not sure what number you are referring to.
    Mr. Mica. The expenditures for the public building 
commissioner's operations, its administrative and personnel 
costs. Does that raise any flags?
    Are you aware of a request that I have had in, our 
committee has had in, we sent it to David Foley on December 
7th, 2011, to give us a breakdown of administrative costs?
    Ms. Doone. I was not aware of that request, and I only 
became aware of it as the Public Buildings Service came close 
to finalizing its response.
    Mr. Mica. We have been trying to get this information since 
last year. So you are the chief financial officer. And, of 
course, in my opening statement, I described what was sent to 
us, and we see why there wasn't much detail sent to us now.
    Mr. Miller--well, first of all, Susan Brita, you asked 
that--this conference took place in October 2010. In November, 
shortly thereafter, you asked for a review, IG review; is that 
correct?
    Ms. Brita. Correct.
    Mr. Mica. And it looks like a preliminary briefing was not 
done until May of 2011.
    All this was not made public until a few weeks ago, Mr. 
Miller. What took so long between briefing Administrator 
Johnson and Ms. Brita in May 2011?
    Mr. Miller. Chairman Mica, we investigated a number of 
individuals. We interviewed individuals. We turned over every 
stone, and every time we turned over a stone we found 50 more, 
with all sorts of things crawling out from under----
    Mr. Mica. But you never published a report.
    But in June, after providing that briefing to Ms. Brita and 
Administrator Johnson, somehow the GSA chief, Michael 
Robertson, yesterday who was before OGR Committee, informed 
Kimberly Harris, a White House counsel, about the investigation 
going on. Were you aware of that?
    Mr. Miller. I was not aware of that.
    Mr. Mica. You were not aware of it.
    It was interesting that, back in May, you advised 
Administrator Johnson to get a handle on the Regional 
Commissioner Neely's--this is May of 2011--on RC's travel, 
Regional Commissioner Neely's travel. Is that correct?
    Mr. Miller. Chairman Mica, I did brief Administrator 
Johnson on the interim report----
    Mr. Mica. But did you tell them to get a handle on his 
travel expenditures?
    Mr. Miller. I told the regional administrator to get a 
handle on his travel in August of 2011.
    Mr. Mica. So you told him?
    Mr. Miller. I told her. It is Ruth Cox.
    Mr. Mica. OK, Ruth Cox. OK. And then we have a trip to 
Hawaii, we have another trip by Neely to Hawaii in October, 
another trip to Atlanta, another--Susan Brita warned, I guess, 
you about an upcoming 17-day South Pacific junket headed by 
Neely?
    Mr. Miller. Well, actually, Chairman Mica, we were so 
concerned about it, we contacted Ms. Brita, the deputy 
administrator----
    Mr. Mica. You contacted her.
    Mr. Miller [continuing]. And said, ``Do you know that this 
travel is going on?''
    Mr. Mica. And, Ms. Brita, you notified the regional 
administrator, Ruth Cox, about the upcoming junket and 
expressed concern, right?
    Ms. Brita. I did.
    Mr. Mica. Yeah. And what happened?
    Ms. Brita. I expressed concern and asked her to review the 
plans and make sure the----
    Mr. Mica. And that called it off, didn't it? No.
    So they went on that junket; then another one to Dana 
Point, California; the Hawaii-Guam-Saipan trip with staff; 
another trip to Atlanta; a 4-day site visit to Hawaii. And then 
I guess one--where is Napa, this offsite trip to Napa? Is that 
California? You have to go to the wine region.
    Well, I see why Mr. Neely is not with us today and the only 
pictures I can get of him are in his hot-tub suite. But I thank 
you, Ms. Brita, for your coming forward and for your trying to 
be a good steward of taxpayer dollars.
    I yield back.
    Mr. Denham. Thank you, Chairman Mica.
    Mr. Michaud?
    Mr. Michaud. Thank you very much, Mr. Chairman and Ranking 
Member, for having this very important hearing today.
    Needless to say, I was appalled when I first heard about 
some of the things that the GSA administration had charged to 
the taxpayers for their conference. This Congress has had its 
share of disagreements over the past on how to reduce the 
Federal spending and how to address the deficit issue; however, 
I think that we all can agree on that there is no place for 
this type of an abuse of taxpayers' funds.
    The employees that put together this conference forgot that 
the Federal Government is supposed to work on behalf of the 
taxpayers. Families and small businesses throughout Maine 
should not have to pay for employees of GSA to take lavish 
vacations in Las Vegas or anywhere else throughout the country. 
And I hope that we can get the information that we need here 
today to make sure that this does not happen again.
    And, additionally, I plan to offer an amendment to the 
financial service and general Government appropriation bill to 
prevent GSA from holding this type of conference in the future. 
But this is just extremely disturbing.
    I do want to commend Ms. Brita for what you have done and 
are going to do, hopefully, with the agency.
    I guess my question is for the inspector general and Ms. 
Brita both. Since this has been brought to light in the 
public's attention, what has been done or will be done in the 
future to make sure that this does not happen again?
    And for the inspector general, Mr. Miller, has the IG 
looked at other agencies that you are aware of for similar type 
of abuse that might have occurred or is occurring?
    Mr. Miller. We are currently looking at all the conferences 
in Region 9. And we are looking at conferences in general.
    Mr. Michaud. Just Region 9?
    Mr. Miller. No. Well, we are focusing on Region 9 right 
now, but we are generally looking at conferences. We are 
receiving a number of hotlines, as you can imagine, about other 
conferences throughout the country.
    Ms. Brita. Mr. Michaud, Acting Administrator Tangherlini 
has committed to do a complete, top-to-bottom review of the 
agency, management structure, reporting lines, centralization 
versus decentralization, and with an eye, of course, to 
improving the management and overall service delivery of the 
agency.
    Mr. Michaud. Is the acting director also looking at making 
sure that the Federal Government is reimbursed?
    Ms. Brita. Yes, sir. He has already taken action in that 
regard. Three letters were sent out, and additional letters 
will be forthcoming. Yes.
    Mr. Michaud. And, Mr. Miller, what do you expect or what 
should Congress do to make sure that this doesn't happen again, 
not only with GSA but other agencies, when you look at these 
type of conferences?
    Mr. Miller. I think supporting IGs is something that helps. 
We have to investigate these frauds and abuses and waste. 
Unfortunately, you cannot legislate good judgment, you can't 
legislate good management. And so I think one of the things you 
can do is strengthen inspectors general in all the agencies.
    Mr. Michaud. OK. Now, as far as GSA, are you understaffed 
in the inspector general's office for GSA? And how many 
vacancies do you currently have?
    Mr. Miller. I will leave that to the judgment of the 
appropriators.
    We currently have 70 special agents. They are the ones that 
actually interview witnesses. And I think you have read some 
transcripts with our special agents. We have forensic auditors 
that are trying to find all of the funds that are charged to 
purchase cards as part of this conference, charged to building 
operations funds, just trying to trace the money. So we do have 
forensic auditors. We have auditors currently who are under our 
FTE level and not hiring due to appropriations problems.
    Mr. Michaud. Could you submit to the committee the number 
of vacancies you currently have?
    Mr. Miller. I would be happy to.
    Mr. Michaud. Thank you.
    I see I have run out of time. Thank you very much, Mr. 
Chairman.
    Mr. Denham. Thank you very much, Mr. Michaud.
    The vice chair of the committee, Mr. Crawford.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. Peck, what were your impressions of the $30,000 pool-
party award ceremony where you were given an award for your 
work on the stimulus program?
    Mr. Peck. Mr. Crawford, there was a reception, I think, the 
afternoon I got there. It was outdoors at the hotel. I wasn't 
aware of what it cost. Until reminded by the investigator, I 
didn't remember what the food was because I don't think I ate 
very much of it. Nor was I aware that there might have been an 
award ceremony there to justify food expenses. That is not 
something I would have thought of, not a rule I believe I was 
familiar with.
    I thought as part of a hotel package I had seen both in 
public and private sectors before that those kinds of 
receptions were provided as part of a hotel package. So I 
thought, at the end of the day, not knowing the expense, I 
didn't think it was out of the ordinary.
    May I say one thing about the awards?
    Mr. Crawford. Sure.
    Mr. Peck. If I have an opportunity, I would like to say 
something about coins.
    When I left the Government in 2001, Federal agencies did 
not give out coins. When I came back in 2009, this fad had 
apparently evolved from the military where civilian agencies 
had coins. Everywhere I went, somebody gave me a coin from 
their agency.
    There had been a coin minted for the commissioner's office 
of the Public Buildings Service. When I was told that they were 
running out and that we needed to order more, I asked how much 
they cost. They told me about $10 apiece. And I said, we don't 
need coins; if I want to give someone an atta-boy, I can give 
them a handshake or a paper certificate.
    So that was my view. I was concerned when I saw the coins, 
I will say that.
    Mr. Crawford. OK. We will get back to that in a minute.
    I am going to ask that they put up a slide of your suite. 
When you arrived at your two-story, 2,400-square-foot suite, 
what was your impression?
    Mr. Peck. That it was ludicrously large and kind of like 
you would see in Las Vegas. And I also, as I noted in my 
testimony, immediately asked what the charge was for this suite 
and whether there was an extra charge for it.
    Mr. Crawford. OK. I have an email here. It is dated October 
28th. It is from you to Jeff Neely. And it states, ``Jeff, that 
conference is unbelievable, awesome, a terrific lesson to all 
our folks about what preparation, professionalism, and a sense 
of perspective and humor can do. I just sent a rave review to 
Martha Johnson. Thanks for inviting me.''
    Do you want to comment on that?
    Mr. Peck. Yes, sir. At that time, I was--remember, I had 
arrived on Monday afternoon or late Monday morning. What I had 
seen were, during the presentations that I saw the 1 day I was 
there, a number of presentations that were all substantive 
about the work of the Public Buildings Service. I thought that 
the presentations prepared by the four regions were good. The 
conversations that I saw during the sessions were about the 
work of PBS and how we could get work done better. I thought 
that was professional, and that is what I was referring to.
    Mr. Crawford. OK. When you decided to throw a party in your 
suite, who ended up paying for the food and alcohol, which was 
about a $2,000 bill for the food? You indicated in your 
testimony, in your written testimony as well as your oral 
testimony, that you actually paid for the alcohol. Is that 
correct?
    Mr. Peck. Yes, sir. Well----
    Mr. Crawford. You had bartenders and staff there for the 
party?
    Mr. Peck. No, sir.
    Mr. Crawford. No?
    Mr. Peck. Not to the best of my recollection, but I don't 
recall the----
    Mr. Crawford. OK, why would it be OK--there were no awards 
at this party. Why would it be OK to bill the taxpayers for 
$2,000 worth of food at your party?
    Mr. Peck. It would not.
    Mr. Crawford. So it is not OK to do that?
    Mr. Peck. No, sir. And, as I said, I specifically said, 
because it was not an award ceremony, it was not part of an 
official function--I had a practice when I went to meetings, 
whether they were in regional office buildings or somewhere 
else, of trying to meet the GSA employees and mostly talk shop. 
This thing was a pre-dinner thing. I thought it was a nice 
thing to do. And I specifically said it was not a part of the 
conference program, I would pay for it myself.
    By the way, I was not prepared to pay for fancy food, and 
that is why I said, let's do beer, wine, and chips. And then 
this other food arrived, and I said, how did that happen, and 
they said, well, it is covered in the existing conference 
contract. And I believe I said something to the effect of, so 
no additional cost? That is what I was told. I did not know 
that it had been charged additionally or separately until I was 
interviewed by an IG agent about, I guess, 4 weeks ago now when 
I asked him when he told me about the money whether that was an 
additional amount or was it covered by the contract.
    In any event, Mr. Crawford, I totally agree with you. I had 
no intention of charging it to the taxpayer, did not believe it 
was a legitimate taxpayer expense. And I yesterday sent a 
letter to the inspector general saying if that, in fact, was an 
additional cost, I am prepared to pay it back.
    Mr. Crawford. OK, I have one quick question for Mr. Miller. 
These OIG reports are a great window into how well or poorly an 
agency is being run. Do you believe the public would be better 
served by having a central location where any citizen could 
access all the OIG reports from across the Government and be 
provided with an opportunity to learn what the OIG does, how to 
read the reports, and why they are important?
    Mr. Miller. I think that would help. We have a Web site 
where you can access our public reports, and every IG does. 
There is also a Web site called IGnet.gov that will give you 
the list of all the IG Web sites.
    Mr. Crawford. All right, thank you.
    I yield back.
    Mr. Denham. Thank you, Mr. Crawford.
    Mr. Walz?
    Mr. Walz. Well, thank you, Chairman Denham and Ranking 
Member Norton.
    I would like to thank the chairman, too, for his unwavering 
commitment to transparency. And I have had the opportunity, 
along with Congressman Michaud, to work with Mr. Denham on the 
VA side.
    And I bring that up for a reason. Every adjective has been 
used on this, from deeply disappointed, furious, and so forth. 
None, to me, get to the heart of the matter, and I think the 
folks sitting here recognize this. It is always healthy in a 
democracy to be skeptical--be skeptical about Government, be 
skeptical about large institutions. But it is this type of 
behavior that moves into cynicism, and cynicism is cancerous.
    The American public is cynical, if you look at some of the 
polling, at rates never before seen. They don't trust large 
financial institutions. They watched Wall Street go broke. They 
watched their taxpayer dollars bail them out. And they watched 
bonuses paid to those very people who caused the problem in the 
first place. And then the very people they expect to oversee 
things being done do this very same thing.
    And I think, as Mr. Denham said, this attack on trust is so 
frustrating at a time when, yes, we are all being asked to 
provide efficiencies and get things out of this. But I think to 
put this into perspective, to understand the choices that were 
made here, for you to understand, the folks who made those 
choices, exactly what this means, I would like to just talk a 
little bit about what it means, the choices we have too.
    We have an unprecedented number of veterans trying to seek 
service. And in my Sunday paper in Minneapolis this weekend, it 
talked about this. One-point-two-five million veterans were 
treated for especially mental health care. And when interviewed 
by this, 70 percent of these providers said that they do not 
have adequate resources or space. We are asking them to do more 
for less on the very basic principle of providing mental health 
care for our warriors when they return. And somebody had the 
audacity to do this.
    It goes beyond public trust. It goes beyond a thought that 
how can we get to a point of that type of selfishness when 
others are being asked to do more with less. And it is so 
frustrating to me that this becomes--and I thank the inspector 
general.
    And I want to be very clear, Mr. Miller, I am an unabashed, 
huge fan of inspector generals. They return $12 for every $1 we 
spend on them. I fought for years to make sure in the VA--one 
of the most important jobs we do sitting up here is to provide 
oversight in the checks and balances.
    And amongst this whole thing, I think you brought up a very 
good point: You can't legislate some of these poor choices that 
were made. But you know what we can do? We can put in 
redundancies and safeguards. That is the way you protect 
against bad judgment. That is the way you protect against a 
rogue employee or whatever it might be.
    I am just baffled here that the redundancies fell through. 
At some point in time, somebody is looking at this--and, Mr. 
Peck, you know this. There is no free lunch. If it is part of 
the contract, the price was jacked up. They don't give you 
something free in Las Vegas. You could have a big suite, they 
know you are going to spend the money elsewhere. That money was 
spent elsewhere. They are not going to give that away.
    And I appreciate your attention to detail in trying to look 
at this. But at some point in time, somebody just had to 
recognize that, that it had to be.
    And your coin issue is exactly right. Members of Congress 
have to use their own money or campaign money, which is private 
money, not taxpayer money, if they are going to use coins. So I 
think you bring up a point on that.
    But how does it just get passed beyond those redundancies? 
So, Mr. Miller, I am going to come back to you for just a 
second. How, when they knew this was being done on, you know--
and I don't--we can pick out the things, sushi or whatever 
makes the highlight tonight or whatever, but 44 bucks for 
breakfast? I am a big man, I can't spend 44 bucks for 
breakfast. Somebody had to say that. Are you kidding me?
    And then what it does is the American public believes every 
single employee and every single agency is corrupt and not 
doing what they are supposed to. And I watch those providers, 
those mental-health providers out at those CBOCs in southern 
Minnesota doing the best they can with a crowded waiting room, 
and it is simply unacceptable.
    So, Mr. Miller, I think what needs to come out of this is, 
yes, somebody needs to be held accountable and, yes, ensuring 
it doesn't happen again and that the safeguards are put into 
place. So how do we do that? How do we strengthen that? What 
are your suggestions going to be, if I can ask?
    Mr. Miller. Sir, I think that we need to have stronger 
central control. I believe the new Acting Administrator 
Tangherlini has already instituted more centralized control of 
the finances so that each budget is not controlled by a 
regional commissioner or a regional administrator. I think he 
is working on having control over their IT systems, as well.
    But, as you said, redundancies, controls, checks and 
balances, those are all things that can help check the 
excesses, the bad judgment, the criminal activities of others. 
And we always rely on people to tell us when they see something 
wrong. And that is why Acting Administrator Tangherlini and I 
reminded all GSA employees recently to call our office if they 
see anything wrong, because we do rely on people telling us 
about this. And I, too, commend Susan Brita for bringing this 
to our attention.
    Mr. Walz. Would you have caught it without her help, if I 
can end on that? Would the IG have been able to figure this 
out, with the things that are in place, without her coming 
forward?
    Mr. Miller. That is a difficult question. We are told by 
witnesses that the culture in Region 9 was a culture that put 
down anyone that complained. Witnesses said that the regional 
commissioner would put people down, and the witness said, ``And 
he knew how to put people down.'' One witness said there was 
somebody who tried to raise an objection and the witness said, 
quote, ``He squashed her like a bug,'' unquote. And with that 
kind of an atmosphere----
    Mr. Walz. That is some of the most disturbing things I have 
heard, because the culture of an organization is where all of 
this starts. And if it is in there, it will continue forward. 
That is the piece that has to be changed.
    Mr. Chairman, thank you for the extra time. I yield back.
    Mr. Denham. Thank you, Mr. Walz.
    Mr. Barletta?
    Mr. Barletta. Thank you.
    I have gone through this report here, and to be honest with 
you, I don't know where to start. I mean, we could probably 
spend weeks talking about all the abuse and the different items 
of abuse. And to be honest with you, it actually makes me sick 
to my stomach. So I don't want to go there, because I think the 
public will eventually see what has happened.
    I think there is a bigger problem here. I think there is a 
much bigger problem here. Because, you see, the people back 
home in my district in Pennsylvania, they may not be able to go 
on one vacation this year, not one, because of the price of 
gas. They are hardworking, blue-collar Americans. And to look 
at reports where the GSA spent $136,000 on a scouting trip 
before the conference is more than upsetting.
    And I am just fortunate that I have the opportunity to be 
here today to get some of this off my chest, but most Americans 
don't have that chance. They won't be able to stand here and 
get it off their chest, what they feel. In my 1 year here, I 
will tell you, I have seen more waste, fraud, and abuse in this 
Government, and it is absolutely frightening. It is 
frightening, the way our Federal Government works and how we 
treat the hardworking taxpayers' dollars and laugh. And those 
videos literally make me sick.
    Mr. Peck, you said that you told someone that the food--
someone told you that the food at your party in your suite was 
covered. Who did you tell?
    Mr. Peck. I don't recall exactly, Mr. Barletta, but I 
asked----
    Mr. Barletta. OK. Well, who told you that it was covered?
    Mr. Peck. One of the conference organizers.
    Mr. Barletta. Who was it?
    Mr. Peck. I don't recall who it was. It may have been----
    Mr. Barletta. You don't recall who it was----
    Mr. Peck. It may have been--excuse me----
    Mr. Barletta [continuing]. You don't recall who you told.
    Mr. Peck [continuing]. It may have been Ms. Daniels.
    Mr. Barletta. OK. Let's move on. Let's move on. Who did you 
ask about the cost of the room?
    Mr. Peck. I asked Mr. Neely. I asked at least one of the 
other people who worked on the conference.
    Mr. Barletta. And they told you that there was nothing 
wrong with it. Who was the other person?
    Mr. Peck. It is either Ms. Daniels or one of the other 
people who had worked on the conference.
    Mr. Barletta. Is this the only time that you have witnessed 
any type of abuse in the GSA? Was this conference, was this the 
only example that we could talk about today? Or were there 
other times other than this?
    Mr. Peck. As I said in my testimony, Mr. Barletta, this is 
the only conference that I am aware of in which this kind of 
expense, including pre-conference planning and all that, was 
out of control. Most of the GSA meetings and conferences I 
attended were focused on the business of the General Services 
Administration and trying to do a better job getting real 
estate for the Government.
    Mr. Barletta. This happened--and this is where I am going, 
about the bigger problem--this happened in 2010, and here we 
are in 2012 talking about it. But it didn't end there. That 
wasn't just a one-time deal here. Just this year, just this 
year, on February 4th, the regional commissioner spent 17 days 
in Guam--17 days, this year. Who does that in the private 
sector? Who does that? Who leaves their job for 17 days? That 
is not the way the private sector works, that is not the way 
real people work, real companies work.
    Oh, it didn't end there either. March 12th, there was a 
meeting in Napa, offsite, $40,000 for that offsite meeting. Why 
do we have to meet in Napa?
    Mr. Peck. Mr. Barletta, that is--I believe you are talking 
about the same regional commissioner. I don't know. I was not 
aware of the meeting.
    I can tell you the senior management meetings that I held 
were mostly in regional cities, many of them held in Federal 
building conference rooms. We brought in boxed lunches. When 
people went to dinner, they paid their own way. Those are the 
kinds of meetings, when necessary, that I believe are the right 
kinds of meetings to have.
    Mr. Barletta. And who reports to who? I mean, we can sit 
here and pound on Mr. Neely, as well he should be pounded on. 
But who reports to who? Who oversees who?
    I ran a company, I ran a business. And I could tell you, 
this would not have been going on. And it wouldn't be 2 years 
later that we would just be sitting here talking about it.
    Who reports to who? Who oversees whom? Who is responsible 
for whom? And who did you report to? At what point do you blow 
the whistle, like Ms. Brita finally did? At what point do other 
employees in the GSA say, ``This is wrong, and something needs 
to be done''? Why are we here now trying to drag information 
out of people when most Americans are barely making it.
    Let me just finish this. Here is the bigger problem, and 
here is a news release. Big Government doesn't work. It just 
doesn't work. This is not the way the private sector works. And 
I think what we need to be talking about is, what do we do 
instead of the GSA? Because there is lots of abuse in the GSA, 
and there is lots of abuse in other Government agencies 
throughout this Government. And I believe the $822,000 spent in 
Las Vegas by the GSA should be a farewell party.
    Thank you.
    Mr. Denham. Thank you, Mr. Barletta.
    Mr. Cummings?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I want to thank you and the ranking member for your 
decision with regard to allowing the witness, Ms. Daniels, to 
be excused. I thought that was the appropriate thing to do. As 
a lawyer practicing for many, many years, I think it was the 
appropriate thing.
    I want to follow up a little bit on some of the questions 
that Mr. Walz was asking. And, Mr. Miller, we have heard 
these--you just restated something that you said yesterday 
before the Oversight and Government Reform Committee about Mr. 
Neely saying to one witness that you interviewed that she would 
be squashed like a bug.
    Let me read her entire--the statement that she made. And I 
quote, ``She has been''--this is a quote. ``She has been trying 
to bring this stuff up at the board of directors meeting, and 
she would promptly get squashed like a bug when she brought up 
any kind of things concerning the conferences and the 
extravagances and the suites and, you know, the hotel suites. 
Because typically at a conference--I mean, the WRC was not a 
one-time thing where certain people got these very extravagant 
accommodations.''
    Does that sound familiar at all?
    Mr. Miller. Yes, sir, it does.
    Mr. Cummings. And the witness also said that, and I quote, 
``The intimidation factor is pretty large,'' end of quote.
    Mr. Peck, let me return to you. Were you aware that Mr. 
Neely intimidated employees who reported to him?
    Mr. Peck. Mr. Cummings, I didn't know that he intimidated 
employees, but I did, in fact, on more than one occasion, tell 
him that I had heard that in his headquarters, as opposed to 
some of his field offices, there were people who might be 
reluctant to give him bad news because he wouldn't take it 
well.
    Mr. Cummings. What did you mean by that?
    Mr. Peck. I meant that I--this was hearsay. It is the kind 
of thing that, as a manager, I think you want to pick up. And I 
reflected it in his performance evaluation that I meant that I 
had heard there were some managers who, when people sit in a 
meeting and say, ``Gee, I don't think that is the way we ought 
to be operating.''
    Now, to be honest, I thought that we were talking about 
policy issues. I didn't know we were talking about issues of 
real Government waste and integrity. But I----
    Mr. Cummings. OK.
    Mr. Peck [continuing]. Had heard this enough to talk about 
it.
    Mr. Cummings. I only have a limited amount of time. I want 
to ask you some other questions.
    Did any GSA employee ever raise with you concern about Mr. 
Neely's conduct in terms of lavish or excessive spending?
    Mr. Peck. Not that I recall, sir, no.
    Mr. Cummings. Did any GSA employee ever raise with you 
concerns about Mr. Neely's retaliatory actions, whether through 
negative performance reviews, threatening to relocate them, or 
other similar actions?
    Mr. Peck. No, sir, not to my recollection. And I am sure if 
I had, I would have taken action on it.
    Mr. Cummings. This GSA employee who was squashed like a bug 
was clearly right about all the lavish spending. What does this 
mean to you if it was not retaliation?
    Mr. Peck. That----
    Mr. Cummings. In other words, somebody who felt that they 
had been squashed like a bug.
    Mr. Peck. Mr. Cummings, I am not going to--I wouldn't split 
hairs over that. That is an intimidating atmosphere.
    Mr. Cummings. And if somebody had said that to you, you 
would have taken some type of action?
    Mr. Peck. Yes, sir.
    Mr. Cummings. According to the inspector general's office, 
Mr. Neely may have spent a quarter of a million dollars on 
travel over 5 years. Mr. Peck, as the head of the Public 
Buildings Service, did you track the travel expenditures of 
regional administrators or commissioners?
    Mr. Peck. Mr. Cummings, thank you for asking that. The way 
we tried to maintain managerial controls was by benchmarking 
the travel, training, information technology expenses, and 
other overhead expenses of one region against the others, 
balancing them for the amount of workload they had, their 
geographic dispersion.
    And that is what at least the PBS assistant commissioner 
for financial management was supposed to be tracking. I am not 
able to access the information anymore; I don't know how it is 
that that kind of travel might have happened without showing up 
in that kind of a review.
    Mr. Cummings. Well, you stated that Mr. Neely did, quote, 
``a great job for GSA over the years,'' end of quote. You 
argued that Mr. Neely should receive a positive performance 
rating, and you basically defended him. So I am having great 
difficulty understanding your position.
    Mr. Peck. OK.
    Mr. Cummings. Let me finish. Maybe you were not aware of 
what Mr. Neely was doing or maybe you did not fully appreciate 
the level of abuse. And I agree with Mr. Walz, this is abusing 
people. We are better than that, we are a better country than 
that, and this is a better agency than that.
    But there is no question that Mr. Neely's actions were 
inappropriate and they should have been halted. And you were 
his supervisor, were you not? Yes or no?
    Mr. Peck. No, sir. But I don't want to--again, the way the 
GSA structure works, the regional commissioners do not report 
directly to the national commissioner. However, there is a very 
strong dotted-line authority to the PBS national commissioner. 
So there is certainly--I could exert control when I felt it 
necessary.
    Mr. Cummings. And you were head of Public Buildings, were 
you not?
    Mr. Peck. Yes, sir. Yes, sir.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Cummings.
    Mr. Hultgren?
    Mr. Hultgren. Thank you, Mr. Chairman.
    Mr. Miller, please tell me what you know about the 2010 
intern conference in Palm Springs. I wonder if you could tell 
me--we have heard about luxury suites and catered award 
ceremonies. I wonder you can tell us a little bit about that.
    Mr. Miller. We are currently investigating that. The intern 
conference occurred between May 10 and May 14, 2010, in Palm 
Springs, California.
    Mr. Hultgren. And what do you know about it so far?
    Mr. Miller. Well, there were 150 attendees, and we are 
currently in the process of investigating it. There appears to 
be food served, as well. Food is also served at that 
conference, and we are looking into the propriety of that as 
well as other allegations.
    Mr. Hultgren. And, Mr. Peck, I wondered, how is it after 
your briefing by the IG in May of last year that you continue 
to allow lavish conferences to continue?
    Mr. Peck. As I testified, in fact, when I came back, after 
that, I cancelled a number of conferences. Before that even, we 
had eliminated funding for the next Western Regions Conference. 
I cancelled a number of other national conferences, which, by 
the way, I do not believe would have been lavish but which we 
still felt, given the budget environment, that there was not 
enough benefit given the expense that they were going to make 
us have.
    Mr. Hultgren. Mr. Miller, I wonder if you could tell us a 
little bit about some of the offsite meetings in Region 9. I 
wonder how often were they having those site meetings, where 
would they go, and how much would they cost.
    Mr. Miller. Well, the offsite meetings appeared to be 
fairly regular. There was an offsite meeting at Napa, I 
believe, at the end of March of 2012--that is March of this 
year--a PBS Region 9 offsite leadership meeting in Napa. Food 
is reported to be about $40,000 for that particular offsite.
    We are also looking into allegations regarding other 
offsites and tours, like a Jeep tour and that sort of thing, 
charged to the Federal Government.
    Mr. Hultgren. Now, that one in Napa, that was just 
recently, wasn't it?
    Mr. Miller. In March, yes, of this year.
    Mr. Hultgren. Thank you.
    Mr. Miller, I wonder also if the investigation that you 
have been overseeing with your Hats Off investigation revealed 
that more than $400,000 was spent in Region 9 alone for that 
awards program. I know you found evidence of employees 
exchanging awards with one another and supervisors getting 
awards from subordinates. What controls, if any, were in place 
to prevent this?
    Mr. Miller. Well, the problem with Hats Off was there were 
very little controls. GSA had a policy about all of these so-
called reward stores, and they were not being followed in 
Region 9.
    We did our report, we gave a draft report in May of 2011, 
along with the interim Western Regions report. Our Hats Off 
report became final. And in terms of providing discipline or 
adverse personnel action, the agency could always have taken 
adverse personnel action against the Region 9 regional 
commissioner based on the Hats Off award and based on other 
issues. And we always said, even with the interim Western 
Regions Conference report, that the agency should take steps to 
prevent further waste. They could restrict his travel, they 
could restrict conferences, but they didn't.
    The only thing we said was, with respect to Western 
Regions, we were still investigating and that a technical 
adverse personnel action that would end up in litigation would 
not be a wise thing. But everything else was permissible, and 
adverse personnel action based on Hats Off was permissible.
    Mr. Hultgren. I know you began your investigation largely 
because of a report of some stolen items. I wonder if you can 
tell us a little bit more. Were you able to locate those? What 
happened to some of those stolen items? Where and how did you 
find them?
    Mr. Miller. Originally, I think around 40 items were 
reported stolen. We began the investigation. We subpoenaed 
Apple. We found that there were about 115 iPods missing. Apple 
provided us with some of the addresses where iTunes were being 
downloaded, and one of the iPods was located in Mr. Neely's 
personal possession. The subpoena from Apple told us that his 
daughter had been downloading iTunes and that sort of thing.
    Ultimately, there were just so few controls and so little 
restrictions preventing people from even going into the store 
and taking things out that we could not tell for sure who stole 
what from that store.
    Mr. Hultgren. My time has expired. I yield back. Thank you, 
Mr. Chairman.
    Mr. Denham. Thank you, Mr. Hultgren.
    Mr. Peck, my anger and frustration have finally gotten to a 
boiling point. February 10th, my first committee hearing. I 
became chair--was sworn into office January 5th of last year, 
had concerns about this agency. Held our first hearing February 
10th, where I first requested information from you. March 10th, 
2011, requested it again at a hearing. May 12th, requested it a 
third time. October 21st, we sent a letter, a bipartisan 
letter, from the committee on behalf of myself and Ranking 
Member Norton. November 4th, we held a hearing on the LA 
courthouse where we again requested the budget. December 7th, 
written request once again on the administrative costs. 
February 9th, we held another hearing and requested the PBS 
administrative cost information once again. March 20th, another 
written followup letter to the December 7th request. March 
20th, again we went over the administrative cost information 
received from the GSA and let you know how lacking that very 
top line one page was. March 22nd, had another hearing where 
again we asked for the administrative costs. And March 30th of 
this year, we had a staff meeting on the administrative costs. 
April 13th, we have now sent a letter to the new GSA director, 
Mr. Tangherlini.
    It has been a year-and-a-half. We have requested, we have 
sent a letter from the committee, we have demanded. Why are you 
hiding the information from this committee and from the 
American public?
    Mr. Peck. Mr. Chairman, I don't----
    Mr. Denham. You are not hiding it? Do you not have the 
information?
    Mr. Peck. Mr. Chairman, I don't have access anymore to 
either your letters demanding information or our response.
    What I recall is that, in December, this past December, the 
committee asked for detailed information about overhead costs 
of the PBS nationally, the PBS headquarters in Washington, and 
the commissioner's office. I believe we responded to that in 
February or March. There were a number of conversations, I 
know, that were had amongst my staff and the committee staff--
--
    Mr. Denham. Were there details of these conferences?
    Mr. Peck. Sir, I don't believe that--you know, again, not 
having access to what you requested, I don't know if that was 
covered. I believe that the requests were for spending on 
things like travel and training----
    Mr. Denham. Did you give us any information on travel and 
training?
    Mr. Peck. As I said, Mr. Chairman, I no longer have access 
to what we gave you or not, but I do----
    Mr. Denham. Look----
    Mr. Peck [continuing]. Believe we gave you an answer to the 
best of our ability on----
    Mr. Denham. I don't have the data in front of me either 
right now, but I can tell you for the last year-and-a-half I 
have been requesting the information. Do you not remember any 
of these requests? I can name them off again. I mean, but it is 
over a dozen times that I have requested and you and I have had 
the conversation.
    You and I had several conversations on cell phone where we 
have discussed this issue. And I have asked you, what is it 
going to take? Do you have to have a letter from the committee? 
Do we have to pass a bill, a legislation, demanding that we 
actually have a budget in place?
    Mr. Peck. Mr. Chairman, I am fairly certain the agency 
provided you with information about the PBS budget we provided 
to the committees as a matter of course. I don't know what 
exact demands for information you are talking about.
    Mr. Denham. We asked for one page. Obviously there was no 
information on there on this Las Vegas scandal or any of the 
other trips that were planned. And we are going to go through 
all of those trips, but several dozen trips across the Nation, 
lavish expenses. This is just the tip of the iceberg, but none 
of that information was in there.
    So the question is, if it wasn't in there, why are you 
hiding it from us?
    Mr. Peck. Mr. Chairman----
    Mr. Denham. Do you not have it? Do you not have that 
information?
    Mr. Peck. Mr. Chairman, I don't have access to any 
information from GSA anymore.
    Mr. Denham. Anymore. Did you have information--you were the 
top guy. Did you have information that would show you the 
budget for Mr. Neely for Region 9, for the Western Regional 
Conference or all of the conferences?
    Mr. Peck. Mr. Chairman, are you referring to a specific 
request that the committee gave for information about 
conferences?
    Mr. Denham. I am trying to figure out, if you are the top 
guy at GSA, how did you not know that this was going on in the 
Western Region or all of the regions?
    Mr. Peck. Mr. Chairman, the allegations that I have heard 
so far today have been limited to Region 9. And we have 
discussed when and how I became aware of the expenses of the 
Western Regions Conference in October of 2010. With respect to 
other----
    Mr. Denham. So you did not know?
    Mr. Peck. With respect to other conference spending and 
travel spending in general, we were always taking a look at 
what expenses were across the various regions. I was working at 
a level where I was looking at large numbers across the Nation, 
not at specific conferences.
    Except to the extent that nationally planned conferences I 
did put under review in my office, partly in response to budget 
restrictions and partly in response to what we learned in May 
of 2011 about the Western Regions Conference.
    Mr. Denham. Well, you have managed to filibuster long 
enough to get through my entire time here. But let me reiterate 
one more time exactly what this committee has requested and 
then demanded.
    First of all, we asked for the number of employees of PBS 
as well as the number of authorized FTEs; the amount of 
administrative costs with a breakdown of how much relates to 
the personnel costs; to the extent additional staff were hired 
for the purposes of the stimulus bill, how many staff were 
hired, and costs associated with additional personnel; a 
breakdown of GSA-occupied space for administrative purposes, 
including square footage and to the extent space is leased and 
the annual lease cost; and an explanation of which account the 
employee and administrative costs are coming from.
    We wanted a detailed budget for the last 5 years, not just 
about the Obama administration but the Bush administration as 
well, 5 years of a budget. How much money has been spent, in 
what areas, in what regions--transparency for the American 
public. This is not a Republican or a Democrat issue; this is 
about an American issue of knowing what their Government is 
doing.
    You have certainly went through my time here, but we have 
plenty of time today.
    Mr. Peck. Mr.----
    Mr. Denham. I hope you had a good breakfast, because we are 
going to have a long time to go through these.
    Mr. Peck. Mr.----
    Mr. Denham. You can take as long as you want on these 
questions, but we are going to continue to go through them.
    Ms. Norton?
    Ms. Norton. Mr. Miller, I think it would be important for 
the committee to know, as far as you know or perhaps Ms. Brita 
or anyone at the table may know, whether or not what we find in 
Region 9 has metastasized to other parts of the agency. I think 
it is fair to say that there was building up over time 
something of an abusive culture or a region apart. But we need 
to know whether this culture has spread to other parts of the 
GSA or whether you believe that it is essentially a Region 9 
issue.
    Ms. Brita. Ms. Norton, that is precisely why the acting 
administrator has decided, and informed this committee, to 
doing a top-to-bottom review, so that we will be able to answer 
that question rather than just intuitively come up with an 
answer or speculate. One of the purposes for doing the top-to-
bottom review will be to answer that question: Is this an 
isolated Region 9 issue or do we have a larger issue 
agencywide? And we believe that the review, where we are 
looking at all facets of GSA, will be able to answer that 
question as we move forward----
    Ms. Norton. Well, Mr. Miller, have you seen any evidence 
outside Region 9? And in light of what you see in Region 9, are 
you looking at other parts of the GSA at this time?
    Mr. Miller. We have continuing investigations into other 
conferences in other districts. We are looking at at least one 
other conference in another district. But Region 9 employees 
say that spending was part of the culture in Region 9. So we do 
have plenty of evidence regarding Region 9.
    Ms. Norton. Are you doing continuing investigations in 
Region 9?
    Mr. Miller. Yes, yes, we are, into many issues in Region 9, 
other conferences. And we are looking at other conferences 
outside of Region 9, as well.
    Ms. Norton. Ms. Doone, now, your title is chief financial 
officer of the General Services Administration. The CFO for 
Region 9 apparently did speak up about the excessive spending. 
Did any of his concerns--I don't know if it is a he or a she--
reach your office?
    Ms. Doone. No, they did not.
    Ms. Norton. Well, how could you be called the CFO for the 
GSA? I don't understand what your function is then.
    Ms. Doone. The regional CFOs in the Public Buildings 
Service report up through the regional commissioners of the 
Service and do not report to the agency chief financial 
officer.
    Ms. Norton. So you never know anything about the financial 
matters in the regions? Who does know then?
    Ms. Doone. The Public Buildings Service has a central 
budget and financial management division in their headquarters 
office. And that is the office that allocates the funds out to 
the various regions.
    Ms. Norton. You can see the difficulty I am having----
    Ms. Doone. Yes.
    Ms. Norton [continuing]. With an agency whose hierarchy, 
whose structure is very difficult to understand. Do you think 
that that is--do you believe that you were the CFO for the 
entire agency? What were you the CFO of?
    Ms. Doone. Well, I believe that I was the CFO of the entire 
agency, but, unfortunately, with a decentralized financial 
management structure in place, it was very difficult to have 
the visibility into the financial operations----
    Ms. Norton. When did that happen? Has that always been the 
case, that----
    Ms. Doone. It has been that way for a number of years. I 
joined GSA in September of 2010, and it is my understanding 
that it has been decentralized for at least a number of years. 
And that is why----
    Ms. Norton. Is there a CFO at the Public Buildings Service 
then?
    Ms. Doone. There was a position in the Public Buildings 
Service that had carried the title of CFO. And I was very 
concerned, actually, about this decentralization because it 
caused a number of issues when one is trying to oversee the 
financial operations of the agency. And this is one of the 
reasons that Acting Administrator Tangherlini has taken the 
step very quickly to recognize----
    Ms. Norton. This issue, Mr. Chairman, of how this agency is 
structured, it seems to me, is a major factor if we are going 
to look at how to prevent this in the future. And I have to 
asked Ms. Brita, who, apparently, the moment she understood--it 
must be the moment, because the conference was held in October 
and in early November Ms. Brita asked for a report.
    Do you think, Ms. Brita, that there would have been any way 
for you to have known or for the agency to have taken 
preventative action? The agency worked well with your IG when 
it came to action to penalize what had taken place, and the 
penalties are still rolling out. But, of course, the taxpayers 
are going to want to know, isn't there anything that could have 
been done to prevent this problem in the first place?
    Ms. Brita. As Alison said, under the decentralized 
structure, it would have been very difficult for people in 
central office to have found out. But----
    Ms. Norton. You then think that the----
    Mr. Denham. Ms. Norton, your time is expired.
    Ms. Norton. All right.
    You then think that the structure should be more 
centralized?
    Ms. Brita. Yes, I do. And the acting administrator has 
taken steps to do that already.
    Mr. Denham. Mr. Barletta?
    Mr. Barletta. Mr. Miller, you had said earlier that you 
thought that there was inappropriate behavior with vendors by 
employees of the GSA. Would ``inappropriate behavior'' mean 
possible criminal behavior?
    Mr. Miller. Congressman, I do not want to talk about 
criminal charges. We do have a referral at the Department of 
Justice, and so I would decline to answer.
    Mr. Barletta. Thank you.
    Do you also believe--I mean, we are talking about this 
conference, and I know you said you are looking at other 
conferences around the country. But this would send a red flag 
that this abuse could be more than just conferences. Are we 
also looking throughout the entire agency?
    Mr. Miller. My office does look throughout the entire 
agency. And we have had a number of important criminal 
prosecutions over the last couple of years. We sent some 
individuals making counterfeit goods, selling counterfeit IT 
products to the United States, we sent them to Federal prison. 
There was a Chief of Staff that lied to our agents in the FBI. 
We have had a number of property managers receiving bribes and 
kickbacks. About 11 of them were sentenced recently.
    So we have a number of criminal prosecutions. And to answer 
Congressman Walz's question more precisely, the ultimate 
deterrent to this kind of behavior is criminal prosecution.
    Mr. Barletta. Thank you.
    I yield back, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Barletta.
    Mr. Walz?
    Mr. Walz. Well, thank you, Mr. Chairman.
    And I am going to come back and go on this. I am a cultural 
studies teacher by trade, so this idea of culture, all the 
learned and shared values, beliefs, and customs of a group of 
people, I think we would be very naive to not see this in other 
regions.
    I am deeply concerned of this decentralized accounting, 
which seems to me to go back to the heart of the lack of 
transparency, the lack of oversight, the lack of direct 
accountability back to it, which makes it much more difficult. 
And this culture--and just like the private sector, there can 
be healthy and unhealthy business practices, there can be 
healthy and unhealthy agencies. This one I am getting very 
concerned about.
    And I am going to segue here because--which region is 
Kansas City in?
    Mr. Peck. Six.
    Mr. Walz. So it is a different region here. So an IG report 
that dates back to 2010, and I think I quote here, ``The 
inspector general first accused Regional Commissioner Mary 
Ruwwe's office of providing misleading information and doing 
damage to GSA's credibility in an audit of health and safety 
conditions.'' There is a concern there. And are some of you 
aware of what is being reported there? And it was again last 
night here on WUSA about the health risks that are being 
reported by GSA members.
    And it troubles me deeply that--were they squashed like 
bugs, too, when they brought this concern forward? Because 
apparently this was a big enough concern for the commissioner 
there that she spent $234,000 of taxpayer money to get a PR 
firm to, I quote, ``respond to questions regarding toxic 
substance exposure'' instead of dealing with that.
    Mr. Miller, can you tell me about this? Is this out of your 
realm of responsibility? Or how familiar are you with this?
    Mr. Miller. Sir, we wrote the report. And we did a report 
of the Bannister Federal Building in Kansas City, Missouri, at 
the request of Senator Bond and other Senators, Senator 
McCaskill, and Congressman Cleaver. And we did a report; we 
found that GSA did not manage the environmental risks at that 
facility well over the last 10 years. In the last year, they 
were taking steps to manage the environmental risk, but 
historically they did not.
    Mr. Walz. The risks or the risks of bad PR? Because it 
seems to me they spent more money on the risks of bad PR than 
the environmental risks.
    Mr. Miller. Well, that is a fair statement. Our audit 
report was on the environmental risks.
    Now, as soon as we announced our audit, they entered into a 
PR contract within 24 hours to handle PR, even though they had 
a PR staff there----
    Mr. Walz. Is that legal to do that?
    Mr. Miller. In our opinion, they violated just about all 
the procurement rules in hiring this PR firm.
    Mr. Walz. How long did it take them to get that contract? 
Because it has taken me 18 months to get the contract on the 
community-based outpatient clinic for southern Minnesota for 
our veterans.
    Mr. Miller. They had it done within 24 hours. The CO was 
starting to do a competition, a bid, and the CO was directed 
not to do that bid.
    Mr. Walz. So we have basically a no-bid contract for 
$234,000----
    Mr. Miller. Correct.
    Mr. Walz [continuing]. To cover up--I won't use that term; 
we will let the courts decide on that--at least to not address 
the issues that were being brought up by employees there who 
were trying to do a job--again, these are good civil servants 
trying to do a job who were exposed to toxic substance, in 
their opinion.
    Mr. Miller. Well, we didn't get into the exact--how much 
toxic substances were there. We only looked at how GSA managed 
the risk, what did GSA do when they got notice of a problem. So 
we didn't--we are not scientists, we didn't get into the 
environmental----
    Mr. Walz. Did you get into how, for lack of a better term, 
the whistleblowers or the affected people were treated? Were 
they squashed out? It appears to me like they were not taken 
seriously in this.
    The reason I bring this up is, I think, you know, being the 
cultural studies teacher, not the lawyer, it doesn't take a 
great leap of imagination here to see this is not just Western 
Region. Now I have another region that we brought in with a 
very similar cultural disinterest in their employees and a 
desire to have PR trump----
    Mr. Miller. Right. As an IG, before I make a general 
statement, I need to have facts supporting it.
    Mr. Walz. Right.
    Mr. Miller. We have facts in Region 9, but we do have this 
incident in Kansas City. We did the report. They hired the PR. 
There were hearings before Senator McCaskill's Subcommittee on 
Contracting, and Senator McCaskill tried to hold them 
accountable. We noticed a number of misstatements. We informed 
the committee of that, the misstatements by GSA officials in 
the context of that hearing.
    Mr. Walz. That is just deeply troubling again. We move at a 
snail's pace until it is something with PR in an agency and we 
were able to issue a contract. Again, it goes back to this. We 
have crossed between healthy skepticism to cancerous cynicism 
and that doesn't make it any better.
    So Mr. Chairman, I yield back.
    Mr. Denham. Thank you, Mr. Walz. I want to get down to the 
point of who reported to who, and who is accountable on these 
budgets. Ms. Brita, who did Neely report to? Everything is 
getting blamed on Neely because he has pleaded the Fifth. I 
want to know who he reported to.
    Ms. Brita. Jeff Neely had two reporting streams. One was to 
the regional administrator, and then a separate reporting 
requirement to commissioner of the Public Buildings Service. So 
he had two people that he reported to.
    Mr. Denham. And there was no regional administrator, 
correct?
    Ms. Brita. Well, Jeff Neely, at that time, Jeff Neely was 
acting in both capacities, regional administrator and as the 
head of the Public Buildings Service.
    Mr. Denham. So in that position who did he report to? He 
reported to himself on one hand and as administrator he 
reported to somebody?
    Ms. Brita. And as acting regional administrator, he also 
reported to Steve Leeds, who was a senior counsel to the 
administrator who handled all of the regional administrators. 
So he had--Jeff reported to Bob, and then he reported to Steve 
Leeds. Once Ruth Cox was appointed as a regional administrator, 
he then reported to her and stopped reporting to Steve Leeds.
    Mr. Denham. Did you agree with that, Mr. Peck? Yes or no.
    Mr. Peck. Yes, sir.
    Mr. Denham. So he was a direct report?
    Mr. Peck. There is not--there is not a--in GSA's 
organizational chart there is not a direct report between the 
regional commissioners to the PBS commissioner, but as I said, 
for all intents and purposes the Public Buildings Service 
commissioner has a lot of command and control over----
    Mr. Denham. You signed his letter of reprimand.
    Mr. Peck. Yes, sir.
    Mr. Denham. And Miss Brita, you did not feel that that 
letter of reprimand went far enough?
    Ms. Brita. That's correct.
    Mr. Denham. And what did you think should be done at the 
time?
    Ms. Brita. At the time, we had not decided what would--what 
we were going to do. It was still in draft. I felt the letter 
was too weak, given what we knew already about Western 
Regional, as well as the Hats Off Program.
    Mr. Denham. Let me read your email. ``You were not there 
and you are not in a position to judge the entirety of the 
conference. We will not be sending two separate letters if I 
have anything to do with it.'' That was Bob Peck's email to 
you.
    Ms. Brita. That's correct.
    Mr. Denham. And though he didn't--you are saying he did not 
officially report to you, and even though you sent a letter of 
reprimand to him, you still recommended him to be upgraded so 
that he could receive a bonus.
    Mr. Peck. Well, I recommended----
    Mr. Denham. You are under oath. And I do have the email in 
front of me.
    Mr. Peck. Yes, sir. I don't--I don't know what you mean by 
upgraded, but I did recommend a rating of 4 for his performance 
for the year, most of which was based on the performance of his 
region on business metrics that we had in place.
    Mr. Denham. What did the Performance Review Board 
recommend?
    Mr. Peck. I don't--I thought the Performance Review Board 
recommended a 4 as well, but I don't have access to that 
information anymore.
    Mr. Denham. Do you not chair that board?
    Ms. Brita. Yes, Mr. Chairman.
    Mr. Denham. What did you recommend?
    Ms. Brita. The rating that was reported out of the board, 
we recommended that his rating be held as a 3. He came in as a 
3. We recommended that he be held as a 3.
    Mr. Denham. Well, let me read a separate email from Martha 
Johnson. ``I spoke to Bob yesterday after the session. He is 
recommending a 4. Yes, on a bonus. He was also the acting RA 
forever and a day. Martha Johnson.'' Should he have received a 
bonus?
    Ms. Brita. The board did not recommend that he get a bonus.
    Mr. Denham. Should he have received a bonus, Mr. Peck? You 
are the one who upgraded him.
    Mr. Peck. In retrospect, no, sir.
    Mr. Denham. What has changed your mind today? What do you 
know now that you didn't know a year ago when you were 
recommending him for a bonus?
    Mr. Peck. That principally that there were contracting 
irregularities in the Western Regions Conference, and a pattern 
of conduct that Mr. Neely apparently engaged in that I did not 
know about at the time.
    Mr. Denham. You didn't know about it at the time. You were 
at the conference.
    Mr. Peck. No, sir. I didn't know about the pattern of the 
other trips, the travel, the other conferences that were held 
in the Region 9. That's--that's the difference.
    Mr. Denham. You are the Public Buildings commissioner. When 
it comes to public buildings you are the top person. The 
regional--each of these different 11 regions report to you. You 
are supposed to be overseeing the budgets and doing an 
authorization--let me ask. I know you are going to give me a 
long-winded question. I only have so much time. Miss Doone, do 
you not see all of these budgets?
    Ms. Doone. No, my office does not see those budgets for the 
regional commissioners.
    Mr. Denham. Should Mr. Peck be able to see all of those 
budgets?
    Ms. Doone. Yes, he should.
    Mr. Denham. Is there any reason that those budgets would 
have been hidden from him?
    Ms. Doone. I don't know.
    Mr. Denham. Is there any reason that Mr. Peck should be 
hiding those budgets from this committee after requesting them 
over a dozen times?
    Ms. Doone. Not that I know of.
    Mr. Denham. Is there any reason that this issue should not 
have come to light a year-and-a-half ago when the IG released 
his initial report?
    Ms. Doone. I don't know.
    Mr. Denham. I'm out of time. Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman. I just 
want to follow up on the chairman's questions. Mr. Brita--I 
mean, Mr. Peck, what is up with this? I mean, what's happening 
with the budget? I mean, why can't you get that information to 
us? And I know--don't tell me that you don't have it now. I'm 
talking about when you did have access to it.
    Mr. Peck. Mr. Cummings, the--as to the detailed questions 
that Mr.--that Chairman Denham mentioned about personnel 
employment and those kinds of things, I believe that we 
submitted that--that we first got a request in that detail from 
the committee, to my memory, my memory last December, and I 
believe we submitted it in late February or early March, and it 
had to go through--we had to dig out the information, get it 
reviewed and approved, and then sent it up here. I believe that 
was delivered.
    Mr. Cummings. Now, let me go back to the questions I was 
asking you a few minutes ago with regard to your supervisory 
role over Mr. Neely. I think you said that you had heard some 
complaints about him, is that right?
    Mr. Peck. Yes, sir.
    Mr. Cummings. And tell me what the nature of those 
complaints were again.
    Mr. Peck. Well, it was general and not specific, but I had 
heard that Mr. Neely in his headquarters at least was regarded 
as someone who you didn't--he didn't take well if people 
debated with him on his decisions.
    Mr. Cummings. And did that concern you?
    Mr. Peck. Yes, sir, and I discussed it with Mr. Neely on 
more than one occasion.
    Mr. Cummings. And so did you hear about this on more than 
one occasion?
    Mr. Peck. Yes, sir.
    Mr. Cummings. And did you hear about it from a number of 
employees, one, two, three?
    Mr. Peck. I actually heard about it more from senior 
management peers of Mr. Neely, than I did from employees in the 
region itself.
    Mr. Cummings. And so, you know, I guess what's bothering me 
about your role, and I have listened to your testimony very 
carefully, it seems as if you play down your role in all of 
this, but as the immediate supervisor, and you can call it 
whatever you want to call it, when you have got a man who has 
got two supervisors and one is himself and the other is you, as 
far as I'm concerned, you are his supervisor. It seems as if 
you, you know, would have had more hands on Mr. Neely. And I 
just--and you know, my mother used to--who was a former 
sharecropper, used to say, son, you can have motion, commotion, 
and emotion, and no results. And I don't want these hearings to 
be, you know, very emotional, and then we don't get results. 
And so I'm trying to get to what happened here. I'm wondering 
if somebody, the structure was one which the person in your 
position should have had more authority and should have had 
access to more information, or whether you didn't do your job; 
whether you failed to overlook Mr. Neely. Then I wondered, too, 
whether you felt intimidated by Mr. Neely. Because obviously, 
he had a reign of threats going on around him, and so I just--
help me with this. I mean, if you had to restructure that 
relationship, that is, the Neely position and your position, I 
mean, how would you restructure that? Because Mr. Tangherlini 
is trying to make sense of this, and I know he is going to do a 
great job. So--but help him. He is watching you. So tell him 
what--give him your suggestions.
    Mr. Peck. Mr. Cummings, before I left the agency I was 
discussing with Miss Doone and with former Administrator 
Johnson doing what Mr. Tangherlini is doing, which is providing 
more direct control from the central office over the financial 
operations of the regions. That's one. Two, I would have the 
regional commissioners unequivocally report directly to the PBS 
national commissioner. I was focused a lot on the business 
metrics for each of the regions, including how much space the 
Government was occupying, how much we were spending on leasing, 
and we were working very hard to get those numbers down because 
they are in the billions of dollars, and they can exercise real 
savings----
    Mr. Cummings. So as far as these conferences were 
concerned, you would have it so that you had absolutely nothing 
to say about that, a person in your position?
    Mr. Peck. Unless someone brought something to my attention 
and I thought that there was something out of line, I would not 
generally be supervising where and when regional conferences 
were happening.
    Mr. Cummings. Very well. I mean, as I listen to you, I 
think that you made it sound like you played a very lightweight 
role in this, and sir, I must tell you, I think that you played 
a major role and I am sure we will get to the bottom of it at 
some point.
    With that I yield back.
    Mr. Denham. Thank you, Mr. Cummings. Mr. Peck I'm going to 
remind you not only that you are under oath, but that this has 
already been referred to the Department of Justice. There are 
criminal issues at hand here. And to play this lightly, that 
everything is Mr. Neely's fault, certainly I think has this 
entire committee puzzled. I want to just bring back those 
emails that I was talking about. The emails from you to Miss 
Brita, July of last year, the whole bonus, November 5th of last 
year, an IG report, which came out in May of last year. This is 
an internal report. The conference happened in 2010. Miss Brita 
very bravely stepped forward and brought this attention to the 
IG. The IG did a preliminary report, issued that report back to 
Mr. Miller.
    Who did you submit this report to?
    Mr. Miller. Administrator Johnson.
    Mr. Denham. And who did the administrator give it to?
    Mr. Miller. Well, Miss Brita as well, and I'm not sure who 
she gave it to. I don't know the exact nature of the list, but 
I believe she gave it to Mr. Peck and----
    Mr. Denham. Mr. Peck, did you receive a copy of this?
    Mr. Peck. I'm sorry. Could you say again what it is?
    Mr. Denham. Did you receive a copy of the Western Regions 
Conference ``OIG Interim Alert Report on Investigation Into 
Potential Fraud, Waste, and Abuse.''
    Mr. Peck. I did, yes, sir.
    Mr. Denham. And did you receive it in a timely fashion, 
somewhere around May of last year?
    Mr. Peck. Yes, sir.
    Mr. Denham. This gets to a bigger question of the culture 
in GSA. If somebody stepped forward, a whistleblower stepped 
forward and alerted the IG to an issue, and the IG came back 
and issued a report on investigation into potential fraud, 
waste, and abuse, why then would you have a dispute with Miss 
Brita and Martha Johnson and recommend somebody to get a bonus 
at the end of the year?
    Mr. Peck. Mr. Chairman, as I described, the bonus system is 
based on a number of performance metrics. And I was looking at 
the performance of the region with respect to its major real 
estate responsibilities as well as Mr. Neely's problems with 
the conference. But I will say again, as I said in my 
testimony----
    Mr. Denham. This is 20 pages long with quite a bit of 
detail. And you told Susan Brita, ``You were not there. You are 
not in a position to judge the entirety of the conference. We 
will not be sending two separate letters if I have anything to 
do with it.''
    She sits on the committee. She recommended a 3, no bonus. 
You came back, and sent an email to Martha Johnson, or Martha 
Johnson sent an email to Susan Brita. ``I spoke to Bob 
yesterday after the session. He is recommending a 4. Yes on a 
bonus. He was also the acting RA forever and a day.''
    There are criminal issues at stake here. This is all in 
this report that you had a copy of a year ago, that you read, 
that Mr. Neely had a copy of and he read, and still continued 
to take many other trips, which we are going to get into 
greater detail here shortly, many other trips with other 
criminal issues involved, and you felt that it was important to 
go against committee staff and upgrade him and give him a 
bonus.
    That is a culture within an agency that shows no matter 
what investigative report is going on, no matter what 
information or details we have, we are going to operate 
business as usual. So I don't think that you can sit here and 
blame everything on Mr. Neely when you are the one who 
recommended him for a raise after giving him a letter of 
reprimand.
    Do you have a response?
    Mr. Peck. Mr. Chairman, as I said, I take responsibility 
for everything that happened on my watch. As I said, I was 
focused on performance among the regions on a lot of the 
metrics, things that you and I discussed about reducing the 
amount of space the Government occupies, trying to do a better 
job, getting real estate----
    Mr. Denham. In this report.
    Mr. Peck. Excuse me, sir, and but I understand--what I knew 
at the time in that report, I believe it deserved him being 
graded down to a 4 because on performance metrics alone he 
might have got--he would have gotten a higher number, so we 
were grading him down to a number and then we had a 
conversation about whether it should be a 3 or a 4, yes, sir.
    Mr. Denham. In this report, I'm going to go through one 
page of it before I turn this back over to Ms. Norton. The 
preplanning meetings, the dry runs. Again, this goes to the 
overall culture of these expensive trips. Back in 2009, March 
9th through 11th, was the first planning trip with free stays 
at Caesars Palace for several attendees. March 30th through 
31st, 2009, 13 attendees at the Ritz-Carlton and M Resort. 
August 17th through the 19th, 2009, other attendees, $6,000 
cost. November 4th through 6th, the M Resort, 65 attendees. 
March 8th through 12th, 15 attendees, back at the M Resort. 
June 30th through July 2nd, 8 attendees. And August 17th 
through 19th, 20 attendees. And on several of these trips Mr. 
Neely not only approved, approved all of them, but on several 
of these trips Mr. Neely went and brought his family and 
friends as well.
    Many of these trips I should verify--I don't know if all of 
these trips included suites, the very large 2200-square-foot 
room that you and Mr. Neely, separate hotel rooms, but you and 
Mr. Neely both enjoyed. And then October 12th through 15th, 31 
attendees, including Mr. Neely. Nine trips before this lavish 
conference. This is part of this that was in this report that 
you saw; that you shared with Mr. Neely. You gave a copy to Mr. 
Neely, this official inside document, showed him what he did. 
You knew of it, and then you still went against Ms. Brita's 
recommendation--the Commission's recommendation and gave him a 
bonus and upgraded him from to 3 to a 4. How can you blame all 
of this on Mr. Neely when you were the one who approved it?
    Mr. Peck. Mr. Chairman, I'm not saying that--as I made 
clear, I thought that Mr. Neely's actions were wrong. I thought 
the conference went--was clearly excessive.
    Mr. Denham. I am not going to continue to beat up on the 
conference. I think that Mr. Cummings and Mr. Issa did a very 
good job talking about the Las Vegas conference yesterday. This 
is about the overall culture and you were the man that was in 
charge of the public buildings area which allowed all of these 
different trips.
    Now, we are going to go into many other trips that GSA has 
gone through, but the Public Buildings Fund has been used not 
only on these nine trips, but the lavish Las Vegas vacation and 
Napa and everything else that was on your watch that not only 
the Western Region did, but every other region.
    Miss Norton.
    Ms. Norton. This question is not only for Mr. Peck. I have 
to ask all of you sitting at the table, because you all live 
with this system. This puzzled us yesterday at the Government 
Reform hearing. I sit on that committee as well. This notion 
about performance and conduct sounds very, very bureaucratic, 
but I can tell you one thing, that nobody in the real world, I 
don't think in the private sector even, would separate out 
conduct and performance so that one could, in fact, be seen as 
an excellent performer or a good performer while engaged in 
conduct that the agency frowned on.
    So you have to make me understand where the system comes 
from, if it is peculiar to GSA, and whether you think it is 
defensible. I would like to go right across the board. Do you 
think it is a defensible system to bifurcate performance and 
conduct?
    Mr. Peck. No. And I think some of--some of the ways in 
which there are impediments to--in personnel management and in 
conducting discipline--have something to do with this, by which 
I mean this: That there are on the one hand, as every civil 
servant should have, the right to fair play, the right to due 
process in disciplinary action. But it is sometimes a very 
cumbersome practice, and what one is able to do and not to do 
is not clear, and I think that that gets in the way of mixing 
the two.
    Ms. Norton. Well, I have got to ask Mr. Miller. Mr. Miller, 
you are an inspector general. Is this system found across the 
Government where performance and conduct are on two separate 
tracks?
    Mr. Miller. No, I don't--I don't believe--well, first of 
all, I'm not an expert in personnel law, but I don't believe 
that that distinction makes sense. If someone brought in a lot 
of leases, but they did it through stealing, that is still a 
bad performance. You can't separate out the two. And you know, 
the fact of the matter is that Mr. Neely got a performance 
award of $9,000, and he got a special act award.
    Ms. Norton. It does seem to me that civil service, which is 
supposed to keep favoritism out of the picture, this almost 
encourages favoritism because you can always say, and I'm not 
assuming that that happened here, you can say well, this is 
based on one factor or the other. And of course, it runs 
counter to everything you teach a child. It runs counter to how 
the President handled this situation. Mr. Peck and Miss Johnson 
have extraordinary performance records in the Federal 
Government, but the conduct of the employees under them was 
laid to them, and so the President decided, it seemed to me 
appropriately, that he could not bifurcate even their years of 
excellent performance.
    Now, Ms. Brita, you have been in the Government a long 
time. You were I think Chief of Staff, or very high in the 
General Services Administration before your record there 
brought you to the Congress. You have been brought back as a 
political appointee. Did you see this in the agency when you 
were there before? Mr. Miller didn't know of any such 
bifurcation elsewhere, and given your--given your time in the 
agency, I would like your view of the performance versus 
conduct way of viewing one's employees, and where it came from.
    Ms. Brita. Well, Miss Norton, I can tell you what we did on 
our performance board, not only most recently, but certainly in 
the mid-1980s, when I was there. Performance and conduct were 
always considered----
    Ms. Norton. There were no separate tracks in the 1980s.
    Ms. Brita. Performance is a bedrock. Everyone has to 
perform, so that is a--you must consider performance, but 
overlaying that is always the overall conduct.
    Ms. Norton. So you don't know when this bifurcation took 
place.
    Ms. Brita. No, but when you are evaluating the SES conduct 
as well as performance has to be a part of the overall 
evaluation.
    Ms. Norton. If one is looking for one way, one remedy, it 
would certainly be that.
    Could I ask you, Mr. Miller, in light of what you testified 
about the aura of retaliation, and the rest, whether you found 
that there was any obstruction to your own investigation.
    Mr. Miller. We are looking into all sorts of leads. We 
currently--we did not find any outright obstruction yet.
    Ms. Norton. In fact, you were able to put quite a bit on 
the record, it does seem to me.
    Mr. Miller. Yeah, well, we were able to investigate and 
write this report and publish it without obstruction.
    Ms. Norton. Thank you very much. And thank you, Mr. 
Chairman.
    Mr. Denham. Let's go to slide 13. Mr. Miller, we talked 
about the 17-day trip to the South Pacific in February 2012; 
this February, a couple of months ago. So in the last couple of 
years, Mr. Neely has taken many trips to Napa, several trips on 
the planning missions to Las Vegas. It all came out in your IG 
report of May last year. Miss Brita downgraded him on her 
committee. Mr. Peck went ahead and gave him a bonus anyways. 
And then your new report came out, which I have got to hand it 
to you, this report was pretty detailed. This would have been 
several, I think, committee hearings just in having your 
initial report a year ago. So your new report comes out. Now it 
is all hands on deck.
    Mr. Miller. Yes.
    Mr. Denham. Everybody in GSA knows, apparently, because we 
have handed this report out. We have seen Members hand this 
report out to many people beyond Martha Johnson. The 
Administration is now aware of it. And then several other trips 
happened, including this trip, a 17-day trip to the South 
Pacific, to Hawaii, Honolulu, Guam, Saipan, in an internal 
email trying to justify it.
    But here is the personal email at the bottom where his wife 
asks about the schedule. He tells her it is going to be a 
birthday present for her. They are excited about the party. 
What can you tell us about this trip? Was it justified?
    Mr. Miller. Well, we were concerned about the trip. That's 
why we brought it up with the deputy administrator, Susan 
Brita. She then brought it up with the regional administrator.
    Mr. Denham. Miss Brita, did you bring that up to the 
regional administrator?
    Ms. Brita. Yes, sir, I did.
    Mr. Denham. Which was who?
    Ms. Brita. Ruth Cox. She is the regional administrator.
    Mr. Denham. Mr. Peck know about it?
    Ms. Brita. I don't know if Ruth called Bob or not. I know I 
spoke directly to her.
    Mr. Denham. Martha Johnson know about it?
    Ms. Brita. I don't believe I mentioned it to Martha. I 
think I just called Ruth directly.
    Mr. Denham. OK, so you had concern about this. Obviously, 
this has gone on for well over a year-and-a-half. We have got 
two IG reports out now. Still at this point nobody has been 
fired. Nobody has been put on administrative leave. Nobody has 
resigned.
    A year-and-a-half more of lavish spending, lavish trips. 
This trips happens. You once again are put in a position 
where--and you have already been a whistleblower. I mean, I 
think you did your job. I think you did your job by going to 
the IG in the first place to say hold on a second, I think we 
have a problem here. Now, I mean, I congratulate you on that. I 
think most people would have stopped there. And then this 
continued to go on for the next year-and-a-half, and you 
brought it to a number of different people's attention, that 
this trip shouldn't go on.
    And Mr. Miller, you also made a recommendation. What was 
your recommendation?
    Mr. Miller. Well, we were concerned that this was an 
unnecessary trip and a waste of money. You saw the email. He 
says it is a birthday gift for his wife. They quote the song, 
it is your party, we are going to party like your party--you 
have read the emails. We were very concerned about this. We 
were concerned about the performance award that was given, 
$9,000. There was a special act award of $3,000.
    Mr. Denham. And have you investigated this trip and the 
expenses associated with this trip?
    Mr. Miller. We are currently investigating them, yes.
    Mr. Denham. And you have not provided any of that 
investigation to this committee yet, have you, other than the 
emails that directly correspond to it?
    Mr. Miller. We provided the emails, yes.
    Mr. Denham. You don't have the expenses associated with 
that trip?
    Mr. Miller. I'm not sure that we provided that yet. We are 
still working on all of the expenses and working in conjunction 
with the Department of Justice.
    Mr. Denham. Did Mrs. Neely or Mr. Neely pay for the expense 
of a spouse travel?
    Mr. Miller. If you hold on, I will check with staff.
    1We have no evidence at this time that the Government paid 
for Mrs. Neely.
    Mr. Denham. How often does this happen that you can take a 
family, you can throw a 21st birthday party for your kids in 
these suites? How often does it happen that you have family 
travel, you have friends travel, you have these expensive 
suites on the taxpayers' dime?
    Mr. Miller. It seems like they have it backwards. They have 
to have a legitimate business reason. If it is necessary to 
travel to accomplish your goals----
    Mr. Denham. Would a 1-hour ribbon cutting justify a 7- to 
9-day trip?
    Mr. Miller. Not in my opinion.
    Mr. Denham. But in some opinion in the GSA it happens.
    Mr. Miller. Well, apparently it happened. I can't see how 
anyone can condone that, but----
    Mr. Denham. Thank you. Mr. Walz.
    Mr. Walz. I yield back my time to you, Mr. Chairman.
    Mr. Miller. They have it backwards. If you have to travel, 
it is permissible if a family member stays in your hotel room 
and you pay for that family member's travel apart from that. 
That's OK. But to plan travel for a birthday is totally 
impermissible.
    Mr. Denham. In one of these lavish suites, one of these 
2200-square-foot rooms that Mr. Peck and Mr. Neely each had, 
there was a 21st birthday party thrown for family and friends. 
Can you discuss what you found in that issue?
    Mr. Miller. As I recall, there was a 21st birthday of a 
family member of one of the event planners for PBS. And the 
Location Solvers, I believe, according to testimony, the 
Location Solvers found a hotel in Las Vegas for that family 
member and the party, and kind of helped arrange the party, and 
that they had a party in Las Vegas and they got special room 
rates arranged by the Location Solvers. Is that the event you 
were referring to?
    Mr. Denham. Yes.
    Mr. Miller. OK.
    Mr. Denham. That was one of the nine trips prior to the Las 
Vegas vacation.
    Mr. Miller. That was a separate trip. There were nine 
trips, and I guess planning for the Western Regions Conference. 
And there were--maybe you are thinking of--they stayed on an 
extra day and tried to get the special Government rate that was 
not available for the loft suite, and they tried to get that 
special rate. Ultimately, they could not get the special rate, 
and they charged the balance to the Federal Government.
    Mr. Denham. That was the $1,000, roughly $1,000.
    Mr. Miller. Yes, roughly that.
    Mr. Denham. So the Government paid for the room?
    Mr. Miller. Yes.
    Mr. Denham. GSA is the landlord of all of our public 
buildings. Is there any reason that GSA, all agencies of 
Government, is there any lack of space that we have right now 
that would not allow all agencies of Government to hold some 
type of conference in a public building?
    Mr. Miller. I think there is plenty of space in public 
buildings to have conferences. This particular conference was 
to showcase talent, theatrical talent as well as other talent 
of the GSA employees. You can draw your own opinion as to 
whether it was necessary in the first place.
    Mr. Denham. Miss Doone, we have been asking for the 
financial information and administrative cost data since last 
year. Obviously, you can see my frustration. It does seem like 
GSA has been stonewalling us for quite some time. Why has it 
taken so long to get this basic information?
    Ms. Doone. I can't answer that, but I can tell you that we 
have your most recent request, your most recent letter that you 
sent to Acting Administrator Tangherlini, and my office is 
working on that answer.
    Mr. Denham. Is there a reason that we have a 200-percent 
increase in the PBS commissioner's budget.
    Ms. Doone. I can't answer that question because I don't 
have the numbers that you are referring to.
    Mr. Denham. Has there been an increase in the PBS budget?
    Ms. Doone. Yes, there has been.
    Mr. Denham. How big, in your estimation?
    Ms. Doone. It has gone up--it has gone up over the past 
several years, and as a result of an increase in FTE, as well 
as cost in utilities and fuels in the administrative cost area 
that you are referring to.
    Mr. Denham. Traveling conference budget gone up?
    Ms. Doone. I do not know.
    Mr. Denham. How do you not know?
    Ms. Doone. Because that information is managed at the 
level--at the Public Buildings Service level.
    Mr. Denham. It is not managed. Mr. Peck is unaware of it as 
well. Does GSA have the authority to remove funds from the 
Federal Buildings Fund?
    Ms. Doone. The money stays within the Federal Buildings 
Fund.
    Mr. Denham. Does GSA have the authority to move money from 
the Public Buildings Fund?
    Ms. Doone. Not that I'm aware of.
    Mr. Denham.What is your relationship with the regional CFOs 
and how are you ensuring that their authority is not undermined 
at the regional level?
    Ms. Doone. I had no authority with the regional CFOs until 
Acting Administrator Tangherlini realigned that relationship.
    Mr. Denham. You have been there for a while though. Did you 
not have a relationship before?
    Ms. Doone. No.
    Mr. Denham. So this is a new procedure that is being put in 
place----
    Ms. Doone. Yes, that is correct.
    Mr. Denham. Mr. Miller, did you learn from your 
investigation how a regional office can go so far over budget 
without anyone holding them accountable?
    Mr. Miller. Yes, I think Region 9 is a good example of 
that. And if I could just correct something for the record. The 
special act award to Mr. Neely was $2,000 this year, not 3 that 
I said. And the performance award was $9,000.
    Mr. Denham. Thank you. Miss Norton.
    Ms. Norton. I have been--Mr. Neely apparently figures as a 
central character in this drama. I have been trying to figure 
out how he became so powerful, if I may use that word.
    Mr. Neely is not a political appointee, is that correct? Is 
Mr. Neely a political appointee?
    Mr. Miller. No, he is career SES.
    Ms. Norton. So this is a career civil servant, not a 
political appointee who was acting regional administrator for a 
very long time. I believe 30 months. Could I ask you, Mr. 
Miller, you, Miss Brita, in playing the role of regional 
administrator for all intents and purposes and PBS 
commissioner, in effect was Mr. Neely reporting from one level 
as himself to another level as himself with no reporting above 
him?
    Mr. Miller. When he was acting regional administrator, he, 
as regional commissioner of PBS in one sense would report to 
himself as acting regional administrator. Theoretically, the 
PBS regional commissioner would report to the central office 
PBS commissioner, and to the deputy administrator and the 
administrator.
    Ms. Norton. So he was reporting in his commissioner roll up 
through a something of a chain of command to Mr. Peck?
    Mr. Miller. Yes.
    Ms. Norton. In his acting regional administration role, he 
was doing what?
    Ms. Brita. He was reporting to Steve Leeds, who was the 
senior counsel to the administrator. He----
    Ms. Norton. Which is like reporting to the administrator?
    Ms. Brita. Well, he was directly reporting to Steve Leeds, 
and----
    Ms. Norton. No, I am trying to establish whether he had a 
chain of command.
    Ms. Brita. And Steve reported to the administrator, 
correct, yes.
    Ms. Norton. What did that lead to? Were there reports up to 
whoever Steve Leeds is to the--to headquarters from--in his 
role as acting administrator?
    Ms. Brita. When Jeff reported to Steve Leeds?
    Ms. Norton. Yes.
    Ms. Brita. Whatever conversations he had with Steve Leeds, 
Steve reported to Martha. I was not part of that reporting 
chain.
    Ms. Norton. I'm simply trying to understand whether or not 
Mr. Neely was an island unto himself when he held these two 
roles, or whether there was any coherent reporting authority 
who was in charge here.
    Ms. Brita. Well, certainly on paper there was a chain of 
command and a coherent reporting.
    Ms. Norton. And what paperwork would that have been, Miss 
Brita?
    Ms. Brita. It would have been--as RA he was reporting 
himself to Steve, and then Steve--Steve Leeds reported to the 
administrator. In his role as commissioner, he reported through 
the RA and he reported directly into headquarters to the 
commissioner of Public Buildings Service.
    Ms. Norton. Is this true of all of the regional 
administrators, they have this dual reporting----
    Ms. Brita. Yes.
    Ms. Norton. And how does that work at GSA?
    Ms. Brita. It has been something--we are looking at that. 
It is something that the acting administrator is reviewing very 
carefully. There are obviously things that need to be 
streamlined, but we are looking at that as part of our top-to-
bottom review.
    Ms. Norton. One wonders if the--two, this is one agency. 
The two functions are of course quite distinctly different. And 
I can understand the difficulty we have here. It does seem to 
me, though, that other agencies with very distinctively 
different parts end up where somebody at the top is in charge 
of the whole, and I don't know if this is what happened with 
the Western Region. I do not know whether this is what happened 
with Mr. Neely. But Mr. Peck said, in essence, he knew nothing 
about the conference. So whatever you do down there, if you 
hold conferences, it apparently never gets to headquarters. 
Miss Doone knew nothing about the cost, and her title is CFO of 
the entire agency. This is an agency whose structure makes no 
sense. I don't know if it grew like Topsy over time, so that 
you just kind of fill in the the triangles, but I do not 
understand how, allowing each level to not know what the other 
is doing with a level of decentralization that comes without 
accountability. Certainly you have got accountability at the 
top.
    So I am very, very concerned about the structure of the 
agency. I don't know the origin of this structure. At this 
point it seems simple minded, and it--and I do want to--I do 
want to make clear that as a person who ran a complicated 
Federal agency myself, I certainly believe in decentralized 
management control. I mean, if you run Federal agencies like it 
is the Army, you are really going to get in trouble, and by the 
way, even in the Army there is very decentralized control that 
you have got. For example, and this is not quite the Army, but 
in the Selective Service or the Secret Service matter, you 
notice that when that scandal broke this week that they took 
the whole unit out? And ultimately, they are going to the 
supervisors and they are going, it seems to me, up a chain of 
command. As long as we know who reports to who, so that each 
one can hold the other accountable, then the decentralization 
is good. Otherwise, you lose all sense of innovation. People 
have to ask the layer above them, and then the layer above it 
what should be done.
    Mr. Miller, I don't know if you will be involved because 
you now know more about at least what went wrong, when the new 
administrator considers whether there are structural issues. So 
could I ask you, generally is the IG consulted on such matters 
as to whether or not there are structural issues that should be 
remedied when an agency like this one has to consider what its 
conceivable remedies are?
    Mr. Miller. In the past we have not been, but I would 
suspect that Dan Tangherlini, the new acting administrator, 
will consult with us. And I did want----
    Ms. Norton. You would have some recommendations, I take it. 
Do you think----
    Mr. Miller. We will have some recommendations. Generally, 
this is an agency function, how to manage itself. It has 
spilled over into all sorts of problems that we have observed. 
So----
    Mr. Denham. Your time has expired. We are going to get 
deeper into those recommendations in the second panel. We are 
going to invite you backup for the second panel as well.
    Miss Brita, going in a slightly different direction. Do you 
think the L.A. Courthouse should be built?
    Ms. Brita. The agency has made a decision to move forward 
with the L.A. Courthouse, Mr. Chairman.
    Mr. Denham. Do you think it should be built?
    Ms. Brita. As a member of the agency, that is a decision of 
the agency, and I abide by the decision.
    Mr. Denham. We have emails. Do you think--we have email. Do 
you think that it should be built?
    Ms. Brita. I am a member of the agency, and as of now, I 
believe the L.A. Courthouse, that is the decision the agency 
made, and I abide by it.
    Mr. Denham. Have you changed your mind?
    Ms. Brita. I personally will not change my mind about Los 
Angeles, but as a member of the----
    Mr. Denham. OK, I will not push any further in this 
direction.
    Ms. Brita. Thank you, Mr. Chairman.
    Mr. Denham. The reason I bring up the L.A. Courthouse, this 
is something that was authorized a decade ago. We have less 
judges than we had a decade ago. We have empty office space in 
the Roybal Building, a courthouse that is adjacent to the old 
courthouse that is there now. The old courthouse has eight 
vacant buildings. We have vacant courthouses across the Nation.
    Why I bring this issue up, it is estimated $400 million 
that we are going to spend that exceed authorized amounts. This 
committee in a bipartisan fashion has asked for a new 
prospectus, regardless of GSA's position, regardless of L.A., 
or California's position, or the Western Region's position. 
This is a decade-old prospectus. The building has changed 
significantly. Expenditures are grossly going to exceed the 
amounts that have been authorized and there is going to be less 
space than what was originally authorized a decade ago.
    I mean, to me, this seems like we are going to build this 
at any cost. Why this is relevant, not only has the GSA not 
come back with a prospectus and ignored this committee, but we 
have a separate letter from Martha Johnson on the very topic. 
We are going to be bringing that up again at the next panel as 
well.
    To me it smells like an inside deal. Why would you move 
forward on this? Let me back up. I don't think that it is a 
question of why wouldn't you move forward. Because GSA may have 
its reasons. L.A. may have a way to justify it. There may be a 
number of different issues and questions out there. But a 
project that has changed significantly from what it originally 
was, an expenditure that is going to far exceed what was 
originally allocated, and a congressional committee that has 
not said stop the project, not give the money back; just said, 
give us a new prospectus. Show us how you are going to spend 
the money. If it is justified, show us that it is justified.
    Is there any reason why we would not do a new prospectus on 
this building?
    Ms. Brita. Mr. Chairman, we have, in Region 9, a new 
regional commissioner for the Public Buildings Service. We have 
a new commissioner here at headquarters, and we have a new 
acting administrator. I believe that this project will get a 
thorough review. We will work very closely with the 
subcommittee to answer as many questions--in fact, all of your 
questions and we will come to a joint resolution about the Los 
Angeles courthouse project. It is one of the projects that the 
acting administrator has asked about in his first few days. We 
are preparing that briefing. We will get it ready, and we will 
work with the committee to reach resolution on Los Angeles.
    Mr. Denham. Thank you. Mr. Walz.
    Mr. Walz. I yield back to you.
    Mr. Denham. Thank you. I want to go through a separate 
timeline, Mr. Miller. May of 2010. Intern conference in Palm 
Springs. You are doing an investigation on that property, or 
that----
    Mr. Miller. Yes.
    Mr. Denham [continuing]. That conference?
    Mr. Miller. Yes, sir, we are.
    Mr. Denham. Is that customary to have interns do a 
conference? Are interns employees, or are they like our interns 
that are----
    Mr. Miller. They are employees. They are hired under an 
intern program, where they are probationary employees for, I 
believe, 2 years, hired right out of college. So they are full 
employees, but on probationary status.
    Mr. Denham. Probationary employees right out of college, 
interns. Any reason why we would have an intern conference in 
Palm Springs, Riviera Resort. Excluding travel and per diem the 
conference itself spent $150,000. Is there any reason we should 
be spending that on interns?
    Mr. Miller. I see no reason.
    Mr. Denham. Does it happen in other agencies that you know 
of?
    Mr. Miller. I don't know that it happens in other agencies. 
I don't believe it happens throughout GSA, but I will check on 
that.
    Mr. Denham. OK, and that IG report you are conducting 
currently?
    Mr. Miller. Correct.
    Mr. Denham. OK, October 2010. This is the Western Regional 
Conference that we have heard so much about, almost $1 million 
spent, nine different preplanning parties where we had friends, 
family, all join in on those. Out of all of those different 
preplanning events, how many is customary? I mean, do you 
always--do you have preplanning events for each of these 
different conferences across the United States, around the 
world?
    Mr. Miller. It varies, but nine is clearly excessive. And 
they had representatives from the region and a central office 
representative involved in the preplanning.
    Mr. Denham. What is customary? In your work as an IG, what 
is customary in GSA? What is customary in other agencies?
    Mr. Miller. To have a preplanning conference--in terms of 
offsite at the actual location, I am not sure there is anything 
that is customary. I can't imagine having, you know, just from 
my own perspective, having any more than one, if that, at the 
location.
    Mr. Denham. I have just never seen it from the business 
standpoint where you have businesses, corporations that would 
send not only--I wouldn't think a corporation would send 
anybody for a preplanning conference, but if you did you would 
send, I don't know, one or two people. Is there any reason 
why--let's just assume for a second that there was a need for a 
preplanning trip. How many people do you think should go on a 
trip like that if you were planning?
    Mr. Miller. I don't plan conferences. I am not an expert in 
this area. I don't know that--how many they should send or not. 
I think what they would say is that they would need to hook up 
the audio-visual and make sure it all worked right and that 
sort of thing.
    Mr. Denham. Wait. I thought that that was the planning--
private company that we paid to do that.
    Mr. Miller. They did hire a private company for that.
    Mr. Denham. So they hired a private company and they took 
nine preplanning trips.
    Mr. Miller. Indeed, indeed.
    Mr. Denham. To check out audio-visual.
    Mr. Miller. In my opinion, the preplanning trips were not 
justified.
    Mr. Denham. Shortly after that, Deputy Administrator Brita, 
we talked about her involvement in this. What is customary when 
you have an IG investigation? I assume that when a 
whistleblower comes forward, you talk to the top administrator, 
which would have been Martha Johnson. Is that--walk us through. 
How--what happens when you get contacted by a whistleblower? 
What starts the investigation, and who do you contact?
    Mr. Miller. Well, our office of investigations will assign 
a special agent to the allegation. We will check it out. We 
will interview people. We will get documents. We will find out 
is there anything to this? Is this a meritorious complaint? And 
as we look at it, we--and we may find more allegations. We may 
find more suspicious activity, which happened in this case. As 
I mentioned, you know, we are turning over the--every 
proverbial rock, every proverbial stone, we found 50 more. And 
so this is how it would work. The whistleblower comes to us. We 
assign agents. We may assign auditors. We may assign forensic 
auditors. In this case, we also assigned attorneys. I would not 
necessarily communicate with the administrator. I chose to do 
so on this particular one, in May of 2011, because it was so 
egregious. We wanted to stop the spending. We wanted to stop 
the waste.
    Mr. Denham. How many trips took place between October or 
November when the whistleblower contacted you and the 
investigation that you turned over in May of 2011?
    Mr. Miller. The trips by the Region 9 commissioner that's 
separate from the Western Regions Conference report and 
investigation. As we looked at the Western Regions Conference 
issue, we discovered these additional trips by the regional 
commissioner, and we were quite concerned about that.
    Mr. Denham. Ongoing investigation on those trips?
    Mr. Miller. Yes, we do. And----
    Mr. Denham. All of the various trips prior to the October 
2010 Vegas trip, and after, subsequent to the Vegas trip you 
are doing an investigation on.
    Mr. Miller. We are investigating the trips we know of. They 
include some trips prior to that.
    Mr. Denham. OK, I am not going to dive too much into that. 
I have seen some of the emails already, but we will come back 
to that. May 2011, you came up with your report. You gave that 
to Administrator Johnson, and at that time you wanted to get a 
handle on the regional conference's travel.
    Mr. Miller. We briefed the--Administrator Johnson in May 
about the WRC. We went through the PowerPoint. The idea was to 
stop more spending, for her to get control of the conferences. 
I personally met with the regional----
    Mr. Denham. I am out of time, but did it stop?
    Mr. Miller. Not that--not that I could tell.
    Mr. Denham. Thank you. Miss Norton.
    Ms. Norton. I would just like some clarification on the 
L.A. Courthouse. I mean, it goes back to my first days in the 
Congress. Why was--I think it was $400 million. Why was the 
L.A. Courthouse not built then? I mean, it should not have 
lived to be an issue today since it wasn't built. Miss Brita.
    Ms. Brita. Ms. Norton, the L.A. Courthouse, there was 
always an ongoing discussion between the judges, between the 
Administrative Office of the Courts and GSA itself, PBS itself, 
about what would be built out in Los Angeles; the number of 
courtrooms, the size of the buildings. It was back and forth 
and back and forth. It spanned commissioners. It spanned 
administrations. Even the Bush administration, the Clinton 
administration. It went back and forth. And it was very 
difficult for the agency to reach resolution with the judges 
about what exactly to build out there.
    Ms. Norton. So here we have judges who may know something 
about the law having a considerable role in what the GSA builds 
and even--even deeply enough so that they can stop a building 
from being done simply by objecting to the number of rooms, 
even how big it is. This is one of the reasons why, of course, 
we got a GAO report on shared courthouses, and while the judges 
have been the bane of at least my existence ever since I have 
been in the Congress, and the committee of course now has a 
policy which is very clear about who makes decisions about the 
size of courthouses and who should be involved. I will say it 
again, the judges have been a major factor in courthouse waste, 
and the L.A. Courthouse which was bandied about by them in GSA, 
and I am going to say GSA paying disproportionate attention to 
them, now leaves us in the position where you have some 
appropriators wanting the courthouse because the money is out 
there.
    Let me ask you, Mr. Peck. Will any additional funds be 
necessary--this was at least, what it is 15 years ago, Miss 
Brita, that this money was appropriated? How is anybody even 
going to build a courthouse at all, or are you expecting that 
you will begin to build and you will come back and say, we need 
some more money for the L.A. Courthouse, which of course this 
committee thinks we don't need in the first place.
    Mr. Peck. Ms. Norton, the appropriations I think for this 
were made in 2001 and then again in 2004 or 2005.
    Ms. Norton. I am sorry, what was made in 2000?
    Mr. Peck. The appropriations for the courthouse.
    Ms. Norton. You mean they keep reappropriating the same 
money?
    Mr. Peck. No, ma'am. I am just saying there were two 
tranches. There was an appropriation I believe for site and 
design in 2001 and then appropriation for construction in 2004.
    Ms. Norton. Well, is the total cost $400 million?
    Mr. Peck. The total cost is $399 million.
    Ms. Norton. So in 2000, a dozen years ago, it was believed 
that the courthouse should cost $400 million. Could a 
courthouse be built in L.A. for $400 million today?
    Mr. Peck. Today the construction budget, if I recall 
correctly, is about $335 million. It can be built. It is much 
reduced in scope from what the judges wanted. And if GSA 
manages----
    Ms. Norton. So it is half of your----
    Mr. Peck. I would have to go back and look at how many. It 
is many fewer courtrooms than were proposed back in 2001 or 
2004.
    Ms. Norton. Do you think this courthouse should be built at 
all now that you are free of the post that you held at GSA? If 
you had your--if you had the ability to make an independent 
judgment, Mr. Peck, would you believe that there are other ways 
to accommodate the needs in L.A. than building even a scaled 
down courthouse?
    Mr. Peck. I did take a look at alternatives for providing 
the kind of security and space that the courts need. I was 
convinced that the best thing to do was, in fact, to build a 
new courthouse, to fill up the other building, the Roybal 
Building, and with respect to the historic courthouse, either 
retain it in the GSA inventory and move a lot of expensive 
lease space in Los Angeles into that building or sell off the 
historic courthouse.
    Ms. Norton. Is that what the agency is going to do?
    Mr. Peck. Well, that was when I left, those two 
alternatives for the use of the historic courthouse was what 
were being considered.
    Ms. Norton. Could any additional Federal building funds be 
used if there were any shortfall in building, assuming it 
precedes the L.A. Courthouse, or does the agency feel 
constrained by whatever funds have already been appropriated?
    Mr. Peck. Well, when I left I said that we would, GSA would 
never come back for more money for the Los Angeles courthouse 
if the contract were in fact awarded, but that was my 
direction.
    Ms. Norton. Has construction begun on a new courthouse in 
L.A.?
    Mr. Peck. No, ma'am. It is, as I understand it, there is a 
solicitation on the street for a design-build contract to 
design and build a courthouse for $335 or so million.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Denham. Ms. Doone, when was Mr. Peck fired?
    Ms. Doone. I don't know the specific date.
    Mr. Denham. Do you have a specific date, Ms. Brita?
    Ms. Brita. I don't. I am sorry, Mr. Chairman. It was the 
beginning.
    Mr. Denham. Do you recall, Mr. Peck?
    Mr. Peck. Yes, sir.
    Mr. Denham. Mr. Miller.
    Mr. Peck. April 2nd.
    Mr. Miller. April 2nd.
    Mr. Denham. April 2. Mr. Leeds the same day?
    Mr. Miller. Correct.
    Mr. Denham. And administrative leave for Mr. Neely?
    Mr. Miller. I believe it was around the same time.
    Mr. Peck. Mr. Chairman, I believe it was a week or two in 
advance of that.
    Mr. Denham. And who else has been put on administrative 
leave?
    Ms. Brita. Mr. Chairman, there are four other people who 
are on administrative leave, the RCs of the various regions and 
one person at headquarters.
    Mr. Denham. So which regions?
    Ms. Brita. 7, 8 and 10.
    Mr. Denham. And 9 is Mr. Neely?
    Ms. Brita. That is correct.
    Mr. Denham. All four regions have been put on 
administrative leave?
    Ms. Brita. That is correct.
    Mr. Denham. None of them have been fired? And then one 
person at headquarters?
    Ms. Brita. And one person at headquarters.
    Mr. Denham. How about Ms. Daniels?
    Ms. Brita. I think Ms. Daniels was put on administrative 
leave just recently. I think she mentioned she got her letter.
    Mr. Denham. And when did Martha Johnson retire, resign?
    Ms. Brita. The 3rd.
    Mr. Denham. Mr. Miller, when did you make this committee 
aware of the IG report?
    Mr. Miller. I believe it was on April 2nd.
    Mr. Denham. I would agree. I want to go back to this 
timeline. November 2010, Ms. Brita requests the IG report. May 
2011, you finalize the first draft of this. You have now 
determined there is some fraud, there is some waste, there is 
some wrongdoing here. And while you have not completed the 
report at this point you have said stop, we have a problem 
here.
    Mr. Miller. Yes, sir.
    Mr. Denham. You took that all the way to the top to Ms. 
Johnson?
    Mr. Miller. Yes.
    Mr. Denham. June 2011, GSA Chief of Staff Michael Robertson 
informs Kimberly Harris, a White House counsel, about an active 
IG investigation regarding fraud and wasteful spending related 
to the Western Regions Conference. In June, you would agree 
with that timeline, Mr. Miller?
    Mr. Miller. I don't know what was said to the White House.
    Mr. Denham. August 2011, GSA appoints Ruth Cox regional 
administrator for Region 9, GSA OIG briefs Ms. Cox and advises 
her to get a handle on Regional Commissioner Neely and his 
travel.
    Mr. Miller. Correct.
    Mr. Denham. October 2011, you have already said let's get a 
handle on this, you have made it clear, crystal clear to the 
Administrator Martha Johnson.
    Mr. Miller. Correct.
    Mr. Denham. She has done what she has, at least partially 
what she is supposed to do and let the White House Chief of 
Staff or GSA Chief of Staff, liaison to the White House, know 
that there is a problem. The GSA Chief of Staff, liaison to the 
White House, alerts Kimberly Harris, a White House counsel. 
Then a new administrator or a new regional administrator comes 
in. Is Ms. Cox still employed?
    Mr. Miller. Yes, she is.
    Mr. Denham. OK. So you had a recommendation, the White 
House is alerted, we have a new regional administrator and then 
Mr. Neely continues to go on a number of different trips: 
October 2011, a 9-day trip to Hawaii for this road show that we 
already threw up the email on the party with his wife; November 
2011, a 5-day trip to Atlanta to attend a nontraining 
conference; December 2011, Ms. Brita, deputy administrator, 
warns of the 17 South Pacific junket that Mr. Neely is about to 
take in December; several other trips here, Dana Point, Napa, a 
number of other ones that I know you are going through on your 
investigation. But February of this year, the 17-day trip goes 
on. This is after you have told Martha Johnson we had a problem 
the previous May, we put a new administrator in charge, the 
White House has been alerted, Ms. Brita has come back and said 
this trip is not a good idea, you said this trip is not a good 
idea, and Mr. Neely continues to go on this trip with his wife 
for her birthday and a party.
    Mr. Miller. Right.
    Mr. Denham. Did it stop there, did he take any more trips 
after that? February of this year, was that his last trip?
    Mr. Miller. I believe they had a Napa Valley conference.
    Mr. Denham. Just one was that?
    Mr. Miller. Yeah, I believe just one.
    Mr. Denham. How about the March trip, the 4-day visit to 
Hawaii?
    Mr. Miller. The March trip, March of this year, I think 
that was the last one we have knowledge of.
    Mr. Denham. In March of 2012, I have got a 4-day site visit 
to Hawaii for Mr. Neely, also in March 2012 a 4-day offsite 
trip to Napa for the executive team meeting, $40,000 for that 
conference not including travel expenses.
    Mr. Miller. He had four trips after the Saipan 3-week trip.
    Mr. Denham. I have been asking for information about this 
budget since day 1. We have requested as a bipartisan fashion 
to get a handle on this budget. An IG report comes out, 
internal recommendations, the White House is alerted. We go so 
far as to replace Neely. You recommend no more trips, Ms. Brita 
recommends no more trips. Martha Johnson is aware of all of 
these trips and they continue to go on for the next several 
months. We are talking a year-and-a-half now. Was anybody fired 
during that year-and-a-half that you know of? Was anybody put 
on administrative leave?
    Mr. Miller. Not that I know of.
    Mr. Denham. Anybody resign?
    Mr. Miller. Not that I know of.
    Mr. Denham. So on April 2nd, we still don't have a budget, 
a year-and-a-half later we still don't have all of the expenses 
that have been spent out of this fund. There is no 
justification for the amount of money that continues to 
increase every single year, a budget that is outside of 
Congress because it uses all the rent money from all of the 
public buildings, and then not until April 3rd does anybody get 
fired, does anybody resign or is anybody put on administrative 
leave and held accountable.
    I think the American public can see why this committee is 
so frustrated. I hope the administration, I hope the new GSA 
administration is seeing how frustrated the American public is. 
A lot has been talked about in the media about this lavish 
expense of Las Vegas, and it is inexcusable. But this culture 
of fraud, waste, corruption, coverups, while we can't prove it 
yet there certainly has the perception that there is an inside 
deal on some of these things. We certainly are going to 
investigate more into the L.A. Courthouse and other issues like 
it. But this certainly is not only a dark day for GSA but it is 
a dark day for the United States Government. We wonder why 
there is so much distrust in Government.
    Mr. Walz.
    Mr. Walz. Well, I would--I think the chairman's 
frustration, Ms. Norton's frustration and all the Members' is 
apparent. Again, I would like to thank the IG's office for 
continuing to do the work that is necessary and to prove that 
there are checks and balances. This hearing is one of those. 
And I would echo what Mr. Cummings said, the emotions and 
frustrations need to translate into changes, systemic changes 
to make sure it doesn't happen again. That is the real goal. So 
this is probably only the beginning. And again I don't think 
words adequately describe our frustration, because as I said, 
this is money that could have been targeted towards veterans, 
targeted towards Head Start, targeted towards limited 
resources, and it wasn't.
    So with that I yield back, Mr. Chairman.
    Mr. Denham. Ms. Norton.
    Ms. Norton. Just one final comment. Mr. Chairman, when the 
chairman goes through all the trips made after a new 
administrator was appointed and suggests that there may have 
been nefarious dealings here, I go back to whether appointing a 
regional administrator makes any difference in the structure 
you have. It seems to me that if these trips were going on, the 
only line, straight line I see is to the commissioner in 
Washington because these were, he was then a PBS commissioner 
only. As the commissioner in Washington says, he wasn't the one 
who was supposed to keep track of these trips even after these 
issues had become known inside the agency. So I am not sure 
whether one needed to do anything nefarious if you have--if you 
appoint a regional administrator and it really doesn't make any 
difference. Because it looks like her control is either so 
bifurcated or so attenuated that it doesn't matter unless she 
is a very strong person, and remember she is only at the 
regional level.
    So I have great problems with how this could have 
continued. I think that appearance problems are raised. I see 
no evidence that there was any corruption going on. I think all 
you had to do was take a trip. And since no one was in charge 
when you were acting administrator of your trips or when you 
were PBS and acting administrator of your trips, when you went 
back to being PBS nobody was in charge, because this agency 
apparently is structured so that people in Washington don't 
have accountability even though the line runs straight up to 
them.
    That is very, very troubling. I do want to say for the 
record that the employees who were put on administrative leave, 
even people who carried the title of commissioner, were civil 
servants. And in our law and in Federal regulations you cannot 
simply fire them without some due process. So I think that is 
going on now. What has happened at the top of the agency is 
that all of the political appointees, so far as I can tell, 
have in fact been taken out of the agency. That is not going to 
cure the problems, as testimony here I think today makes clear. 
And the chairman and I have an obligation to proceed to see 
just what is going to happen. It is going to be a new regime, 
but it is going to involve some of the same actors who are at 
the table this afternoon, and I want to thank you for your 
testimony.
    Mr. Denham. We are going to move into the second panel. I 
would ask Mr. Peck, Ms. Doone, and Ms. Brita to remain within 
the committee room. There may be further questions that we have 
for you as the second panel comes on. Mr. Miller, we invite you 
to stay here on the panel. The second panel of witnesses will 
not only include Mr. Miller but the Honorable Daniel 
Tangherlini, acting administrator, U.S. GSA, the Honorable 
Martha Johnson, former GSA administrator, and Mr. David Foley, 
Public Buildings Service deputy commissioner.
    Mr. Tangherlini, you are the new guy?
    Mr. Tangherlini. Yes, sir.
    Mr. Denham. I see no reason that you will not tell us the 
truth, therefore we will forego the swearing in.
    I would ask unanimous consent that our witnesses' full 
statement be included in the record. Without objection, so 
ordered. Since your written testimony has been made part of the 
record, the subcommittee would request that you limit your oral 
testimony to 5 minutes. Mr. Miller, since we have already 
received your statement, unless you have anything further you 
would like to add at this time, we will ask Mr. Tangherlini to 
begin.
    Mr. Tangherlini.

TESTIMONY OF THE HONORABLE BRIAN D. MILLER, INSPECTOR GENERAL, 
  U.S. GENERAL SERVICES ADMINISTRATION; THE HONORABLE DANIEL 
   TANGHERLINI, ACTING ADMINISTRATOR, U.S. GENERAL SERVICES 
 ADMINISTRATION; MARTHA N. JOHNSON, FORMER ADMINISTRATOR, U.S. 
   GENERAL SERVICES ADMINISTRATION; AND DAVID FOLEY, PUBLIC 
 BUILDINGS SERVICE DEPUTY COMMISSIONER, U.S. GENERAL SERVICES 
                         ADMINISTRATION

    Mr. Tangherlini. Good morning, Chairman Denham, Ranking 
Member Norton, members of the subcommittee. My name is Dan 
Tangherlini, and I am the acting administrator of the U.S. 
General Services Administration. I appreciate the opportunity 
to come before the committee today.
    First and foremost, I want to state that the waste and 
abuse outlined in the inspector general's report is an outrage 
and completely antithetical to the goals of the Administration. 
The report details violations of travel rules, acquisition 
rules, and good conduct. Just as importantly, those responsible 
violated rules of common sense, the spirit of public service 
and the trust that America's taxpayers have placed in us. I 
speak for the overwhelming majority of GSA staff when I say 
that we are as shocked, appalled and deeply disappointed by 
these indefensible actions as you are.
    We have taken strong action against those officials who are 
responsible and will continue to do so where appropriate. I 
intend to uphold the highest ethical standards at this agency, 
including referring any criminal activity to appropriate law 
enforcement officials and taking any action that is necessary 
and appropriate. If we find any irregularities, I will 
immediately engage the GSA's inspector general. As indicated in 
the joint letter that Inspector General Brian Miller and I sent 
to all GSA staff, we expect any employee who sees waste, fraud 
or abuse to report it. We want to build a partnership with the 
IG while respecting their independence that will ensure that 
nothing like this ever happens again. There will be no 
tolerance for employees who violate or in any way disregard 
these rules. I believe this is critical not only because we owe 
it to the American taxpayers, but also because we owe it to the 
many GSA employees that work hard, follow the rules and deserve 
to be proud of the agency for which they work.
    We have also taken steps to improve internal controls and 
oversight to ensure this never happens again. Already I have 
canceled all future Western Regions Conferences. I have also 
canceled 35 previously planned conferences, saving nearly $1 
million. I have suspended the Hats Off stores and have already 
demanded reimbursement from Mr. Peck, Mr. Shepard and Mr. Neely 
for private in-room parties. I have canceled most travel 
through the end of the fiscal year agencywide, and I am 
centralizing budget authority and have already centralized 
procurement oversight for regional offices to make them more 
directly accountable.
    I look forward to working in partnership with this 
committee to ensure that there is full accountability for these 
activities so that we can begin to restore the trust of the 
American people. I hope that in so doing GSA can refocus on its 
core mission, saving taxpayers' money by efficiently procuring 
supplies, services and real estate, as well as effectively 
disposing of unneeded Government property. We believe that 
there is a great need for these services and the savings they 
bring to the Government and the taxpayer.
    There is a powerful value proposition to a single agency 
dedicated to this work, especially in these austere fiscal 
times. We need to ensure we get back to basics and conduct this 
work better than ever. At GSA our commitment is to our service, 
our duty and our Nation and not to conferences, awards or 
parties.
    The unacceptable, inappropriate and possibly illegal 
activities at the Western Regions Conference stand in direct 
contradiction to the express goals of this agency and the 
Administration, and I am committed to ensuring that we take 
whatever steps are necessary to hold responsible parties 
accountable and to make sure that this never happens again. We 
need to focus this agency on the basics, streamlining the 
administrative work of the Federal Government to save 
taxpayers' money.
    I look forward to working with the committee moving 
forward, and I welcome the opportunity to take any questions. 
Thank you.
    Mr. Denham. Thank you. Ms. Johnson.
    Ms. Johnson. Chairman Denham, Ranking Member Norton, and 
members of the committee, on April 2, 2012, I resigned as 
administrator of the General Services Administration and left 
my cherished career as a public servant. I stepped aside to 
allow a new team to rebuild GSA from the major missteps of the 
Western Regions Conference in October 2010.
    I previously served GSA in the Clinton administration, 
leaving in 2001. At that time the leadership team was strong, 
the schedules, design excellence and other programs were 
producing much value for their customers.
    When I returned to GSA in 2010, the agency was not the 
same. A quarter of the executive positions were empty, 
customers viewed our partnership askance, labor relations were 
acrimonious, the leasing portfolio had ballooned and more. 
Nearly 2 years had elapsed without a confirmed administrator. 
My confirmation was delayed 9 months. By the time I was sworn 
in, a sequence of four acting administrators had overseen the 
agency.
    I did not know there was yet another problem. The Western 
Regions Conference had evolved into a raucous, extravagant, 
self-congratulatory event that ultimately belittled Federal 
workers. The expense of planning for the conference was well 
underway when I entered GSA and I was unaware of the scope.
    Thus, I began my tenure as administrator. I take this 
opportunity to thank the overwhelming majority of GSA's 13,000 
employees who rose to the task of renewal. Their record is 
extraordinary. Energy efficient buildings, competent management 
of the fleet, IT acquisition, the innovative challenges .gov 
Web site and much more.
    For my part I set about reconstituting GSA's executive team 
after much work. Customers now praise GSA publicly, the labor 
partnership is fruitful, GSA has email in the cloud and GSA 
will relinquish leases and save millions with its renovated 
headquarters.
    However, GSA's performance tragically does not compensate 
for the mistakes of the Western Regions Conference. I greeted 
the IG report of the conference without hesitation agreeing 
with all the recommendations. I am extremely aggrieved by the 
gall of a handful of people to misuse Federal tax dollars, 
twist contracting rules, and defile the great name of GSA.
    This is how that chapter unfolded. Deputy Administrator 
Susan Brita requested an investigation into the conference. The 
IG subsequently shared with us a PowerPoint deck in May 2011. I 
realized this was a very serious matter. We needed all the 
facts, all of them, however painful and disruptive. While the 
investigation continued we appointed a regional administrator 
for Region 9, relieving Mr. Neely of that role, established a 
chief administrative services office reporting to me with 
responsibility for GSA's acquisition, oversight of travel and 
conferences and the like, continued streamlining and shortening 
Government training conferences. We also catalogued our own 
conferences, and Ms. Brita reviewed expenditures until she was 
satisfied that controls were in place. Upon receiving the IG's 
draft report in February 2012, we began disciplinary action, 
revised internal controls and adjusted budgets to penalize 
regions for the wasted money.
    The egregious and coarse nature of the evidence and the 
waste of resources assured a loss of confidence in GSA 
leadership. Therefore, I terminated two appointees in the chain 
of command and submitted my own resignation. I personally 
apologize to the American people. As the agency head, I am 
responsible. I will mourn for the rest of my life the loss of 
my appointment.
    Mr. Denham. Mr. Foley
    Mr. Foley. Thank you. Chairman Denham, Ranking Member 
Norton, members of the subcommittee, thank you for inviting me 
here to testify today. My name is David Foley, and I am the 
deputy commissioner for the Public Buildings Service.
    I sincerely apologize for my remarks at the awards ceremony 
for the Western Regions Conference. At the time of my remarks I 
was not aware of the significant spending irregularities. I did 
not intend to condone any wasteful spending or minimize the 
role of congressional oversight. As I said yesterday, I 
especially want to apologize to this committee in particular 
and Congresswoman Norton. I have the utmost respect for her and 
this committee. You have always been strong advocates for GSA 
and its programs while holding us accountable as an agency.
    I did not mean to belittle you or your role in any way. I 
attempted to make a joke in the context of a talent celebration 
that I perceived as being similar to a comedic roast. As the 
deputy commissioner, I should have taken the stage to stress 
that we have a serious job and responsibility as stewards of 
taxpayer funds. I realize I missed a real opportunity to 
address the nearly 300 people in my organization and stress the 
importance of the work we do.
    During my presentation at the award ceremony I told the 
award recipient I was making his dreams come true by making him 
commissioner for the day. Obviously that was a joke. I was not 
seriously delegating any authority to the awardee. I also joked 
about some of the obligations of being commissioner. My 
understanding at the time was that the commissioner was paying 
for the charges associated with the after-hours party on 
Tuesday evening, so I tried to use that in a humorous way and 
suggested the awardee would have to pay for the party and the 
hotel.
    Finally, I said the acting commissioner would have to 
answer for his proposed pay increases in the video. My intent 
was to point out the commissioner has a lot of responsibilities 
and has to answer to a lot of people in the Administration and 
Congress, not to mock the various oversight roles. My remarks 
were wrong and I take full responsibility for what I said.
    I understand the outrage about this conference, my comments 
and how they have inflamed all of the issues surrounding this 
event.
    I preface the rest of my statement by saying I have only 
seen a draft of the IG report that appears to be the same as 
what has been released publicly. I have not seen any of the 
supporting documents and was not questioned or briefed by the 
IG during the investigation so I do not know all of the 
details. This represents my understanding based upon what I 
remember from almost 2 years ago.
    Concerning my role in the Western Regions Conference, again 
I want to start by personally apologizing. While I was not 
directly involved in the planning for the conference or any of 
the financial and contracting irregularities identified in the 
inspector general's report, I did attend 2\1/2\ days of the 
conference. There were things that seemed over the top, but I 
believed they were not being paid for with Government funds.
    In past conferences items like the tuxedos and the after-
hour parties were paid for by individuals, not the taxpayer. 
Had I known what has since been revealed I would have been 
concerned and reported it. Because of the regional reporting 
structure in our agency I did not have supervisory control or 
authority over how the regional budget was spent, procurement 
activities or any of the employees in the Western regions. The 
regional commissioners and their staff reported directly to 
their regional administrators with input from the commissioner 
who report in turn to the administrator's office. My primary 
role as the deputy commissioner is dealing with the Office of 
Management and Budget, Congress and other Federal agencies on 
critical projects and policy issues. I am not a contracting 
officer, and I do not have a warrant to approve expenditures.
    I have spent the last 15 years of my career working for 
GSA, and I believe strongly in the agency's mission and the 
value it provides to other agencies and our country. I am truly 
sorry for my comments and apologize to this committee, the 
Administration, my fellow GSA employees and, most importantly, 
the American taxpayers.
    At this point I am willing to take any questions you may 
have.
    Mr. Denham. Thank you. Let me start with Mr. Tangherlini. I 
know there is going to be a number of questions about what you 
are implementing today and the reassurances you can give to the 
American public that you have put the safeguards in place to 
address this.
    I want to just touch on before we get started with the 
questions what is being done on transparency. You have heard--I 
have been asking, this committee has been asking for quite some 
time for a budget for the last 5 years. I assume that that is 
something that you have readily available today. How long will 
it take you to get that to this committee?
    Mr. Tangherlini. I have your letter of April 13th. You have 
given us an April 25th deadline. I intend to meet that 
deadline.
    Mr. Denham. Five-year budget, full details, full 
disclosure?
    Mr. Tangherlini. We will provide you all the information 
that we can get. As you heard today, there are serious concerns 
about the way the data has been managed within the regional 
structure, but I will get you everything I can.
    Mr. Denham. You are also doing an internal audit right now. 
The IG is still doing an audit or an investigation. What will 
the audit, what do you anticipate, what are you looking for in 
the audit that you are not going to get for me in the IG 
report?
    Mr. Tangherlini. Well, I want to do a top-to-bottom review 
of the organization, how it is set up, how it spends its money. 
I want to see what I get out of that. I want to see if there 
are issues of how we can better structure it. Already we have 
taken a move to bring the financial offices, the regional 
financial offices, and the service financial officers under our 
CFO. We have done--taken some action to centralize oversight of 
procurement authority. And that is just the start.
    Mr. Denham. When do you expect to be done with the audit?
    Mr. Tangherlini. Well, I want to take as much time as 
necessary to get a great picture of the status of the 
organization. That having been said, if there are ideas that 
come out of our review, we are going to implement them 
immediately.
    Mr. Denham. Will the audit take months, weeks, years?
    Mr. Tangherlini. We would like to do it as part of the 
budget development process, which culminates in submitting the 
2014 budget in September. That having been said, if there is 
anything that needs to be changed immediately we are going to 
change it.
    Mr. Denham. Well, this committee would request not only the 
immediate changes that are being done in detail but we would 
also request a copy of that audit. Do you think it will take as 
long as September to receive a copy of the audit?
    Mr. Tangherlini. I would call it more of a top-to-bottom 
review than an audit. An audit is a very specific activity. But 
that having been said, any details that we develop we will be 
happy to share with the committee.
    Mr. Denham. Thank you.
    Mr. Miller, you have referred a number of things to the 
Department of Justice, criminal action, some sweetheart deals. 
Can you--what can you share with this committee on the 
reference to DOJ?
    Mr. Miller. Very little, unfortunately. I can state that we 
made the referral and that is about it.
    Mr. Denham. Ms. Johnson, the timeline that I went through--
well, first of all, let me start with the first timeline that I 
discussed with Mr. Peck. Ultimately I hold him accountable for 
not sharing or ignoring or stonewalling this committee on the 
budget. Obviously there was a great deal to hide. But in over a 
dozen requests to have a copy of that budget over the last 
year-and-a-half, we also requested and submitted a letter to 
you, is there any reason why you failed to permit us or failed 
to give us a copy of the budget?
    Ms. Johnson. I am sorry if there was a request in to me to 
supply you information that I did not acknowledge or respond 
to. I do not have a memory of this at this time.
    Mr. Denham. Thank you. Let me go into the timeline of the 
different travels we have seen here. I would assume that when 
we see the further investigation that it is going to result in 
a number of other trips. I think this committee, I think the 
American public at this point is probably prepared for the 
worst after seeing what we have. But nevertheless let me start 
with May of 2010, where we had the nine trips for the 
preplanning. A lot has been talked about Las Vegas. You endured 
a lot of that yesterday with $1 million being spent on the 
Vegas trip. My concern is the pattern here and what happened 
after the fact.
    Ms. Brita went to the IG in November. In May the IG came 
back with the recommendation to you, advised you to get a 
handle on the regional conference's travel. This is May of last 
year. In June, the Chief of Staff, your Chief of Staff Michael 
Robertson informed the White House, he was formerly the liaison 
to the White House, he let Kimberly Harris, a White House 
counsel, know about an active IG investigation regarding fraud 
and wasteful spending related to the Western Regions 
Conference. In August you felt it was important enough to put 
Ruth Cox, regional administrator for Region 9--let me stop 
there. Did you put Ruth Cox in as the new regional 
administrator?
    Ms. Johnson. Yes, we appointed Ruth Cox as the regional 
administrator.
    Mr. Denham. Why?
    Ms. Johnson. We needed to fill the administrator, the 
regional administrator's position. It had been double filled by 
Jeff Neely for quite a while. While I had been working hard to 
get regional administrators in all the regions, this is the one 
that was still outstanding and I was eager to get it filled. 
For a number of reasons, not the least of which is that the 
regional administrator is an important person in the line of, 
in the chain of command, in the line of authority over the 
regions and I am the administrator of the whole organization, 
the regional administrators are in the regions, and it is 
important to have that presence there.
    Mr. Denham. You advised the new regional administrator, 
Ruth Cox, to get a handle on the Regional Commissioner Neely's 
travel?
    Ms. Johnson. I did not personally advise her to get a 
handle on his regional travel.
    Mr. Denham. Thank you. My time is expired. I will come back 
to that.
    Ms. Norton.
    Ms. Norton. Thank you very much. Mr. Foley, I heard your 
testimony yesterday as I was of course in the cloakroom, and as 
I said yesterday, even members of the Oversight Committee know 
the difference between a joke and corruption. So I recognize 
that that was a joke. The problem with the joke is that what 
nobody knew at the time was that there was some honest to 
goodness, perhaps not as the joke had indicated, but some 
honest to goodness nefarious dealings that have come out since. 
And as I reported to you, unless you feel that I took umbrage 
at the joke, I took just the opposite since the joke had you, 
or somebody had me already on the phone with a conference call 
questioning some of the excesses. That really wasn't the 
problem. The problem was that it turned out that this whole 
affair was no joke.
    I must say I don't understand your title. You have the 
title of deputy Public Buildings Service commissioner.
    Mr. Foley. Deputy commissioner, yes.
    Ms. Norton. Does--do the commissioners report, in the 
regions do the commissioners, the building service 
commissioners report to you?
    Mr. Foley. No.
    Ms. Norton. So what is your function?
    Mr. Foley. As I said in my opening statement, my primary 
function is dealing with the Office of Management and Budget, 
congressional committees and other agencies on critical 
projects, policy issues and initiatives.
    Ms. Norton. So you are basically a policy person, not a 
person in the line, in the chain of command for the public 
service commissioners?
    Mr. Foley. Correct. I have one direct report.
    Ms. Norton. Why did you go to Nevada?
    Mr. Foley. I gave a presentation on the afternoon of my 
arrival on Tuesday on our performance results, key initiatives, 
and outlook on the capital budget for fiscal year 2011. I also 
stayed until the end for the award ceremony.
    Ms. Norton. Mr. Miller, the notion of Hats Off will have no 
meaning to the general public, has no meaning to me. As I 
understand it, it is supposed to reward employees for 
meritorious work. Would you please describe the Hats Off 
program?
    Mr. Miller. The Hats Off program was one of many programs 
at GSA. Each program had a different name. In Region 9 it was 
known as Hats Off.
    Ms. Norton. Was it only in Region 9?
    Mr. Miller. No, it was in other regions except for Region 
2. All the other regions had a similar program. The idea was if 
an employee performed well they would get a certain number of 
points.
    Ms. Norton. Well, who would give the points, Mr. Miller?
    Mr. Miller. They could be given by a coworker, they could 
be given by a supervisor.
    Ms. Norton. Mr. Miller, just a second. They could be given 
by a coworker?
    Mr. Miller. Correct. So one coworker could give points to 
another coworker and the other coworker could give them back.
    Ms. Norton. Based on what, Mr. Miller? Is Hats Off for the 
purpose of awarding something at the end after a number of 
points have been reached?
    Mr. Miller. Yes. You collect the points and you can trade 
the points in for a prize. Under GSA regulation the prizes 
could not exceed $99. In Region 9 they did exceed $99. They 
included iPods, digital cameras, and similar electronic items.
    Ms. Norton. Mr. Miller, what is to keep--I don't understand 
the point system. I have a friend, I need some points. How does 
one have to justify giving points if you are a coworker or for 
that matter if you are a supervisor?
    Mr. Miller. We found a rampant abuse of the point system 
and of the program, and we recommended shutting it down. So I 
believe that Administrator Johnson had a review by the CFO 
Alison Doone, who was on the first panel. She did a review of 
all the programs across the country. We were told that in 
September of 2011 that Region 9 was shutting down its Hats Off 
program.
    Ms. Norton. I am going to have to come back to this, but I 
have got to understand how a coworker could help you get 
points, but go ahead.
    Mr. Miller. Well, that is part of the problem that we 
identified.
    Ms. Norton. Because it is supposed to be for work related 
matters?
    Mr. Miller. Correct.
    Ms. Norton. And normally work is judged by a supervisor of 
some kind?
    Mr. Miller. Correct. And supervisors technically were not 
supposed to receive rewards on the basis of this.
    Ms. Norton. Supervisors themselves could not receive?
    Mr. Miller. Correct. But in Region 9 I believe there were 
some supervisors receiving some awards.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Denham. Ms. Johnson, what restrictions were on the 
regions to confine their spending to approved budget levels?
    Ms. Johnson. Restrictions by the regions. The regions are 
made up of the two divisions, the Federal Acquisition Service 
and the Federal--the Public Buildings Service. The Public 
Buildings Service budgets were allocated out of the central 
Public Buildings Service office to the regions, and so that 
portion of the regional budget was managed by the region and 
reported back up into the Federal, the central office of the 
Public Buildings Service. The Federal Acquisition Service has a 
different process. They have a different fund that they work 
from and their reporting structures are highly centralized 
and--are highly centralized.
    Mr. Denham. So how do you approve the budgets?
    Ms. Johnson. I approved the budgets. I met with the 
commissioners weekly and on a quarterly basis we reviewed their 
financial performance. In terms of approving their budgets as 
we went through the budget cycle every year thinking about what 
was--well, in the Public Buildings Service what was going to be 
a budget request. All of that was related to me and we met and 
discussed it. On the acquisition side it was a different kind 
of conversation because it was based on the acquisition fund 
that yielded their essential revenue and then how they spent 
it. They reviewed that with me quite carefully.
    Mr. Denham. So how did the budget triple, PBS 
commissioner's budget triple from 2009 to 2011?
    Ms. Johnson. Congressman, I am sorry, I don't know about 
those numbers and I am not able to research them.
    Mr. Denham. How did it go up by $50 million for the PBS 
headquarters?
    Ms. Johnson. I don't understand that and I don't know.
    Mr. Denham. How did it go up by $80 million, $83 million 
for the regional offices?
    Ms. Johnson. I don't understand that and I have no 
knowledge about that that is useful right now.
    Mr. Denham. So then you certainly wouldn't know how a 
budget for these conferences would balloon from $250,000 if 
they had it budgeted to more than $800,000, almost $1 million?
    Ms. Johnson. Congressman, when I received the final report 
from the IG delineating these expenses and these abuses, I was 
appalled and I pulled the disciplinary levers that I could pull 
immediately. I then removed the two senior officials in the 
chain of command and I resigned.
    Mr. Denham. I want to come back to that. But let me finish 
with this understanding of how your operation worked.
    Ms. Johnson. OK.
    Mr. Denham. Mr. Neely and the other Public Buildings 
Service regional commissioners, who are they accountable to? 
Was it Mr. Peck?
    Ms. Johnson. GSA is a matrix organization. I know 
Congresswoman Norton is also concerned with this. It is a 
matrix organization in that the regional commissioners, both 
the FAS acquisition service and PBS service, reported in two 
ways. They reported to their regional administrator who was the 
immediate representative of me in the region, and then they 
reported functionally to the central office commissioners 
because that is where they received their budgets and their 
strategic direction. It is a matrix, like a corporation, it is 
not an easy one. It is not command and control like military 
services, it is a matrix. And so----
    Mr. Denham. Mr. Tangherlini, I assume you think that is a 
problem?
    Ms. Johnson. It was difficult to manage, it is always 
difficult to manage a matrix.
    Mr. Denham. Or changing the matrix, Mr. Tangherlini?
    Mr. Tangherlini. We are going to look at the matrix. 
Clearly this form of structure created some issues associated 
with this conference and we are concerned about what it could 
create going forward.
    Mr. Denham. Ms. Johnson, you were briefed by the IG last 
May. Why did you allow Mr. Neely and others to continue their 
trips and offsite meetings up until just a couple of weeks ago?
    Ms. Johnson. Congressman, the conversation that we had with 
the IG in May alerted me to how serious this investigation was. 
I have a lot of respect for the IG and what an investigation 
entails. I immediately began some activities with respect to 
the controls and the immediate leadership in the region. But I 
have to say I respected the investigation and I did not want to 
act on inconclusive material. It was not the final report. And 
until I got the completed final report I did not feel I would 
be doing anything but interrupting what was an investigation, 
which my deputy had requested. So the fact that it took an 
additional 9 months was not what I was expecting at that point. 
That was a wrinkle in this problem that was very difficult to 
manage around. I did----
    Mr. Denham. The IG--an investigation is a very serious 
thing, is it not?
    Ms. Johnson. It is a very serious thing. And the initial 
report indicated a number of things that were very concerning. 
It was an inconclusive report. It was not----
    Mr. Denham. Yeah, inconclusive. But you have the inspector 
general here. Mr. Miller, did you inform Ms. Johnson about this 
potential fraud, waste and abuse and did you tell her to get a 
handle on Mr. Neely's travel, on the entire regional 
conference's travel?
    Mr. Miller. We went through the PowerPoint very clearly.
    Mr. Denham. Did you tell her to get a handle on it? We went 
through a lot of this already. I just wanted to know whether 
you told her to get a handle on it or not?
    Mr. Miller. I told the regional administrator in August to 
get a handle on Mr. Neely's travel. When I talked to 
Administrator Johnson, I told her directly that I thought that 
Mr. Neely needed to be candid with our special agents because 
in the interview he said some things that we thought were less 
than candid and I thought that was not appropriate for a Senior 
Executive Service official.
    Mr. Denham. Ms. Johnson, you said you took immediate 
action. You took immediate action 2 days ago. This is a pretty 
scary report.
    Ms. Johnson. I agree.
    Mr. Denham. I mean yes, certainly you want to see the 
overall findings. But to see that they spent $1 million in Las 
Vegas is right here. To see what they spent it on, to see the 
pictures of the 2200-square-foot rooms, to see that they went 
well over their budget. We have a completely separate 
investigation going on now because you failed to take action. 
It has in here in this initial report of May of last year that 
they had nine different trips. It certainly has, while 
inconclusive, at least the initial appearance that laws have 
been broken, criminal acts have been committed. I guess the 
very simple question is if you took this serious why did you 
not act, why didn't you stop all travel, why didn't you make 
serious adjustments, why didn't you make the budget--bring the 
budget out then and allow this committee at the very minimum to 
see what was happening in the budget?
    Ms. Johnson. At the time, as I said, I highly respected 
that the IG was undertaking a very serious investigation. To 
preclude what would be the conclusions of that investigation I 
was concerned would in some way taint the ability we would have 
to discipline.
    I took it very seriously, Congressman. I can only say that 
I took it so seriously I gave up my public service career.
    Mr. Denham. A year-and-a-half later. And during this time 
nobody was fired, nobody was put on administrative leave. You 
had a report back last May that showed all of these trips, that 
showed how much over budget they went. Now, you may not have 
very good controls over your budget, which I find appalling, 
but that report last May shows you the numbers. So if you 
didn't have control over your own budget, the inspector general 
is now telling you what is in your budget, how much over budget 
they went, some of the egregious acts and some of the criminal 
action, and you took no action during that time.
    Ms. Johnson. I did take some action.
    Mr. Denham. Was anybody fired?
    Ms. Johnson. I appointed a regional administrator, I set up 
a centralized office to oversee GSA travel, conferences and 
procurement, and we continued what had been a very strenuous 
effort around disciplining and streamlining conferences that I 
can go into detail about.
    Mr. Denham. Ms. Norton.
    Ms. Norton. I want to make sure we draw a line between what 
might have been mixed in the chairman's questions. On the one 
hand he talks about people fired and administrative leave, on 
the other hand he raises a serious question about expenditures 
and what could have been done. Now, the reason I raise that is 
because of an email I have from Mr. Miller's deputy which--this 
is on May 3, 2011--I am sorry, on July 25, 2011, indicating 
that the May 3rd report was an interim report and, and I am 
quoting the email, our purpose in issuing the interim report 
was to alert GSA to potential waste and abuse so GSA could take 
steps to avoid future issues.
    So that speaks to the first part of the chairman's question 
about reining in spending. The second part warns, please be 
advised that the investigation is ongoing and no personnel 
action should be taken until you have received the final 
report. I view that to read that you could not have put people 
on administrative leave and you could not have fired people 
until the final report.
    Is that true, Mr. Miller?
    Mr. Miller. I think the point of the last part is adverse 
personnel action and that is firing someone. If they wanted to 
restrict travel that was fine, if they wanted to restrict 
conference planning that was fine. They also had the final Hats 
Off report that implicated misconduct on the part of the 
regional commissioner. If they wanted to take action on that 
report that was fine; if they wanted to fire or put on 
administrative leave, all that would have been fine.
    Ms. Norton. So I think the chairman's question, if we can 
leave aside what Mr. Miller's deputy had warned you about, 
which is taking personnel actions, and that would have meant 
putting people on administrative leave, that would have been 
firing people, the deputy does seem to say, indeed almost seems 
to encourage, because he uses the word ``alert,'' alert GSA to 
potential waste and abuse so GSA could take steps to avoid 
future issues. That is why I want to give you every opportunity 
to outline whether or not you took that as a warning that you 
should move ahead on the spending and expenditure issues even 
though you could not take the action you ultimately took with 
respect to administrative leave and discharging employees?
    Ms. Johnson. I believed upon hearing the report and knowing 
about the Hats Off situation that we had a number of issues 
around----
    Ms. Norton. Did you do anything about the Hats Off at that 
point?
    Ms. Johnson. Deputy Administrator Susan Brita and Steve 
Leeds were briefing me on it. I do believe, the best of my 
remembrance, and again I do not have any of my material, so 
bear with me on that and I can try to check it out if I need 
to, but they were updating me on the status of the Hats Off 
investigation. The CFO was doing a report about the various 
regional----
    Ms. Norton. Did you ultimately--before you left did you 
ultimately eliminate Hats Off in that region?
    Ms. Johnson. I understood that we had, yes. The----
    Ms. Norton. You understood that we had. I mean, whose job 
was it?
    Ms. Johnson. I was being briefed by Steve Leeds and Susan 
Brita, my deputy administrator and my senior counsel, both who 
had been in those activities and both of whom had met more 
often with the IG than I was able to meet. Susan, Ms. Brita, 
was the deputy administrator and she was the chief operating 
officer, and we have processes by which we are formally 
interacting with the IG.
    Ms. Norton. Ms. Johnson, in retrospect if you had to do it 
all over again, would you have taken more affirmative steps to 
rein in the spending and to get a foothold on the excesses in 
spending and in conduct that were reported that you might have 
done something about?
    Ms. Johnson. Hindsight is always much better than current 
vision. I believe I was working from the best understanding I 
could make of what my--of what the situation was. There were a 
number of levers that I was pulling, putting leadership into 
the region. As I believe Alison Doone mentioned, she and--or 
maybe it was Bob Peck--she and Bob Peck and I had met----
    Ms. Norton. You don't believe other actions, given what you 
knew at the time, should have been taken?
    Ms. Johnson. I believe action should have been taken. I 
believe that--I believe other actions were being taken. I was--
I dealt--I tasked my commissioners and my senior staff with 
various issues and responsibilities. I assumed that they were 
managing accordingly. They were part of this. My deputy, my 
senior staff, my senior counsel, and the commissioner and I 
were hearing that things were moving. So I was assuming it was 
going on. I did not review in a line item way all of these 
things with each one of them all the time.
    I do want to go to the point about the financial controls. 
The CFO, Bob Peck, and I had met and were beginning to move in 
the direction of consolidating the financial reporting 
structure that you asked about earlier. And I am heartily in 
agreement with the need to pull much more, much more of that 
reporting structure into the central office of the Public 
Buildings Service.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Denham. We will get back to this timeline here in a 
minute, but you are an administrative appointee. You are 
appointed by the President.
    Ms. Johnson. Yes, I was and approved by the Senate, uh-huh.
    Mr. Denham. You were approved by the Senate when?
    Ms. Johnson. I think in February----
    Mr. Denham. When did your confirmation----
    Ms. Johnson. In February 2010.
    Mr. Denham. The Commander in Chief appoints you to a 
position. I assume that you follow his directive?
    Ms. Johnson. I certainly tried to.
    Mr. Denham. December 22nd, 2010, Executive Order 13561, 
Adjustment of Certain Rates of Pay. The Executive order was 
given by the President in December of 2010, prior to you being 
confirmed as an appointee. Why would you not follow that 
directive by the President?
    Ms. Johnson. I am not sure I can speak to that 
substantively. I assumed that directives from the President 
about salaries and so on flowed through OPM and we received 
them in our human resources office and responded.
    Mr. Denham. Were you giving raises?
    Ms. Johnson. I believe that there are--I believe the raises 
that were allowed were within a grade. But I don't have a lot 
of detailed knowledge about that nor substantive memory of it 
right now.
    Mr. Denham. Did you give bonuses?
    Ms. Johnson. We did give bonuses to the senior executives, 
yes.
    Mr. Denham. Did you give a bonus to Mr. Neely?
    Ms. Johnson. We did give a bonus to Mr. Neely.
    Mr. Denham. Why?
    Ms. Johnson. The recommendation from the Performance Review 
Board chaired by Ms. Brita was to give him a 3. I asked Ms. 
Brita if they had discussed in the review the IG report and 
where it was. She said there was virtually no mention of it in 
the meeting. I can't remember her exact words, but she said 
that they did not consider that in their deliberations of 
recommending a 3.
    The buildings commissioner recommended a 4. He said that 
based on Mr. Neely's performance with respect to the leasing 
portfolio, was the strongest across the country, and that fit 
with a 4 recommendation.
    I appreciate the issues between conduct and performance, 
but both recommendations given to me were based on these 
performance measures, and I accepted the commissioner's 
recommendation.
    Mr. Denham. You have a report that has been issued by the 
IG. I got to say, if the IG called my office, I think everybody 
in our office would snap to attention. I mean, the FBI comes 
into your business? You bet people pay attention. Now, if the 
FBI came back to a business and issued a preliminary report, do 
you think that--let me back up.
    Mr. Miller, when you go into somebody's office and you 
issue a preliminary report, what happens?
    Mr. Miller. People pay attention to the report. They read 
it. They try and----
    Mr. Denham. They pay attention. They take the 
recommendations you give serious?
    Mr. Miller. Yes.
    Mr. Denham. OK. And you gave some recommendations in this 
case?
    Mr. Miller. Well, it was an interim report. So we went 
through the interim report, and----
    Mr. Denham. You gave the top execs a heads-up?
    Mr. Miller. Yes.
    Mr. Denham. ``There is a problem here. We have identified 
there is a problem. I just want to let you know that we are 
going to dig deeper.''
    Mr. Miller. Yes. And there is a big problem.
    Mr. Denham. Mr. Neely is mentioned several times by name 
all over this report.
    Mr. Miller. Yes, sir.
    Mr. Denham. Ms. Brita comes back and says that--part of 
this commission--he should not be approved for a bonus. The 
President issues an Executive order on December 22nd of 2010.
    So between the President's Executive order to his appointed 
secretary and Ms. Brita coming back and saying he should not be 
recommended for a bonus, and your IG report that shows, at a 
minimum, egregious behavior, but probably some criminal 
action--obviously, the DOJ--we are not going to name names, but 
the DOJ has been alerted to criminal action. We have dismissed 
people from this committee because of that.
    Mr. Miller. Yes. And she also had a final Hats Off report 
that identified bad behavior on the part of the regional 
commissioner.
    Mr. Denham. So if you are taking the Commander in Chief, 
the President who appointed you serious, and you follow his 
direction, and he issued an Executive order, and your own 
committee staff said that this is not a good idea, why did you 
move forward?
    Ms. Johnson. The President--the Performance Review Board 
was recommending bonuses. I don't believe they were covered by 
the President's Executive order. We were encouraged to and we 
were reducing the amount of the bonuses substantially.
    The Performance Review Board made a recommendation to me of 
a 3, which could have carried a bonus. They recommended the 3, 
the commissioner recommended a 4, and I accepted the 4.
    Mr. Denham. If the FBI came to my business and said that 
they were investigating several individuals, I can tell you, 
those individuals would not be traveling, those individuals 
would not be getting raises or bonuses. And you had the 
equivalent of that, the inspector general coming to you and 
saying that there is an issue. Not only saying that there is an 
issue, ``Heads-up, we have an investigation going on,'' but 
they gave you documentation back that you then shared with 
other people in your agency.
    Is that customary, to share that information?
    Ms. Johnson. I did not share that information with anyone 
else.
    Mr. Denham. You didn't give it to anybody?
    Ms. Johnson. No, I did not.
    Mr. Denham. How did Bob Peck get it? How did Mr. Neely get 
it?
    Ms. Johnson. Ms. Brita and Mr. Leeds and Bob Peck and 
Michael Robertson and I discussed the entire matter together in 
a meeting. It was a meeting in which we reviewed what was 
happening. We agreed it was egregious, it was of high concern. 
And we----
    Mr. Denham. Who was at the meeting?
    Ms. Johnson. The deputy administrator, the Chief of Staff, 
the commissioner, the senior counselor, and myself.
    Mr. Denham. Mr. Robertson, Mr. Peck, Ms. Brita----
    Ms. Johnson. Mr. Leeds and myself. And we discussed this 
report, and we agreed it was egregious. And we were eager--we 
were eager to get the final report so we could act. It took 9 
months before we were able to receive a final report. I will 
say that, had I had that report earlier, I felt I could have 
moved much more strongly with respect to----
    Mr. Denham. We will come in deeper into those details.
    Mr. Walz?
    Mr. Walz. Well, thank you, Mr. Chairman.
    And, Ms. Johnson, I want to make sure I avoid gross 
generalizations, and due process. And I, myself, and I know 
this committee as a whole, the interest is not for 
grandstanding. And while the loss of your career is personally 
tragic to you, I will have to tell you, if you will excuse me, 
my concern lies with the taxpayers today. And regardless of 
what happened here, I don't doubt your sincerity that you are 
sorry this happened, but I hope you recognize the magnitude of 
how far this reaches.
    And it is just incredibly difficult for me to imagine that 
this happened, having worked in different organizations and 
seen it. I think your analysis was very honest about the 
organizational, your matrix design, or whatever. But, I mean, 
first-year graduate students can do a GAAP analysis and see 
there were problems here. And it doesn't appear like that was 
done. And waiting for--I am not going to pass judgment other 
than what we have seen here. There are certainly some problems.
    I want to turn here a little bit here, Mr. Tangherlini, to 
you. How did you get this job?
    Mr. Tangherlini. I was asked by the White House to step in.
    Mr. Walz. What were you doing prior to this?
    Mr. Tangherlini. I was the assistant secretary for 
management and chief financial officer of the United States 
Department of Treasury.
    Mr. Walz. And do things at Treasury work the same as you 
see working at GSA?
    Mr. Tangherlini. Based on what I have seen just through 
this report and the little I have seen, no, they do not.
    Mr. Walz. I have a question on this. Now, you came in, you 
made a command decision, you canceled 34 conferences. What was 
your criteria to determine that those were wasteful?
    The reason I ask this is, professional development and 
conferences for personnel and for professional employees isn't 
necessarily a bad thing if they are done correctly. And that 
internal personnel development--I see it in myself as a 
teacher. The professional development communities we put 
together, while we didn't go offsite and while we had coffee 
that someone made in the back room, that gathering together was 
certainly valuable. And I would make, in the long run, our 
outcomes for student achievement were improved by those.
    How did you determine these 34 weren't going to live up to 
the standards of professional development?
    Mr. Tangherlini. We cancelled those actions pending the 
outcome of people providing us with some explanation as to the 
value of those. There was no centralized program by which 
people would explain in detail the value of the activity they 
are undertaking. And I am not saying that there isn't value to 
these activities----
    Mr. Walz. There was no outcome-based approach to this that 
said this is what it was. We had standards that said this is 
what our professional learning community was going to do during 
the 9-month school year. Here was our July meeting, our August 
meeting, these outcomes. And then they were measurable by 
performance reviews and outcomes that were metrics.
    Were any of those available for these professional 
developments?
    Mr. Tangherlini. I am not sure about these in particular, 
but I will tell you, there is a combination of both 
conferencing and the formal training. The formal training 
actually does have those kind of metrics, and we are doing 
whatever we can to preserve those trainings. However, we are 
also asking the employees of the agency to see if there are 
non-travel-based approaches that we can use to get that 
training, to get that activity.
    Mr. Walz. I would assume in-house that your trainers are 
following best practices and all that. That is why I am still 
amazed by this. There had to be professional trainers at this 
thing. What a waste of time.
    It is like pulling teeth to get money for professional 
development in any organization, let alone governmental 
organizations. Didn't somebody say, this is going to kill our 
opportunity? Because you know this, Ms. Johnson. When is the 
next time we are going to get meaningful professional 
development conferences in GSA? Not in our lifetime. That is 
the destructive outcome of this, and that is going to be 
detrimental for the services that need to be provided.
    So I ask you, Mr. Tangherlini, the SES folks, this Mr. 
Neely, I wish he was here today, too, because I am kind of like 
Ms. Norton. This guy set up a fiefdom. Not since Jack Abramoff 
has anybody walked in with such swagger and ability as what it 
appears like this guy was able to do.
    Here is what I would tell you. These SES folks, I have seen 
some of the most dedicated professional public servants that I 
have ever come across in both private and public sector in my 
life, and I have also seen some of the worst obstructionists. 
How are you going to deal with SES?
    These folks simply--many of them have an attitude that they 
will outlive you. The next President will come, and you will be 
gone, and they will continue. Apparently, that is what Mr. 
Neely did. This guy has been around forever. He outlasted Ms. 
Johnson. Whether he outlasts you or not will be seen what comes 
out of this.
    How are you going to address that with SES?
    Mr. Tangherlini. I think that is a great question, 
Congressman, and I think that that is part of what we have to 
look at in our top-to-bottom review, is what kind of 
performance system do we have in the General Services 
Administration? How do we create a system that measures conduct 
as well as performance? And then, how do we hold people 
accountable to it? So I am committed to doing that, and I look 
forward to working with you on that.
    Mr. Walz. Because there is the taxpayer in this, the 
services we could be providing. But, you know, there are 
comparable people out there that serve in the position that Mr. 
Neely did, and I would assume some of them are performing 
absolutely admirably. Could probably take their talents and go 
into the private sector and make more money; they have chosen 
not to because they are trying to serve. Every one of those is 
painted with the same brush now.
    We have to, and what the chairman has been asking for is, 
is I just encourage you, Mr. Tangherlini, in this, is 
transparency and sunshine is the best disinfectant for 
everything. Err on the side of over-giving, just as my advice.
    And I yield back.
    Mr. Tangherlini. Thank you.
    Mr. Denham. I want to go back to this timeline. So this 
big, extravagant trip takes place in October 2010. There have 
already been nine different trips, pre-planning trips, 
associated with it. Ms. Brita gets hired; she blows the whistle 
in November. The IG comes in. IG alerts you he is coming in. IG 
comes back with an initial document, says, ``We have a problem 
here.'' He advises you to get a handle on the travel.
    Then your Chief of Staff goes to the White House, let's 
them know there is an IG investigation going on regarding fraud 
and wasteful spending related to the Western Regions 
Conference. Then we have a new appointee, Ruth Cox, regional 
administrator for Region 9. She is advised, ``Get a handle on 
the regional commissioner.''
    Then in October of last year--and there are a number of 
other trips. I have looked at all the different trips that he 
has taken. And we are going to continue to investigate that as 
a separate issue because you didn't take care of it. But in 
October, a 9-day trip to Hawaii. In November, a 5-day trip to 
Atlanta for a non-training conference.
    In December, Ms. Brita is alerted to this 17-day junket to 
the South Pacific. She alerts Mr. Miller, and Mr. Miller alerts 
you. And yet he is still allowed to go on it? And his wife? 
Their birthday trip? You don't see a pattern here? A pattern 
that you have been aware of for the last year-and-a-half. But 
you took immediate action. That doesn't sound like immediate 
action to me. They went on a 17-day trip to Hawaii, Guam, 
Saipan.
    And then in March, this year, last month, a 4-day visit to 
Hawaii again, 4-day offsite trip to Napa for an executive team 
meeting, $40,000, excluding travel expenses.
    You took immediate action? You got a recommendation from 
the IG, ``Get a handle on it.'' You got a new administrator, 
``Get a handle on it.'' What immediate action did you take?
    Ms. Johnson. First of all, Congressman, I did not know 
about those trips. I knew that the IG, as he has said----
    Mr. Denham. You knew about the nine pre-planning trips and 
the Vegas trip, did you not?
    Ms. Johnson. I learned about those last May, yes.
    Mr. Denham. You heard--no, no, no. You are under oath. You 
heard about them when?
    Ms. Johnson. I learned about the Vegas trip in--well, I 
learned about the Vegas conference in September 2010 when I 
understood that my senior counselor was going to attend a 
conference in the Western Regions. That is when I learned about 
the conference.
    Mr. Denham. So you knew about the conference and the pre-
planning trips before the IG came in. The IG came in----
    Ms. Johnson. No, I did not. No, I did not. I did not know 
about the pre-planning conferences. The IG informed me of the 
pre-planning conferences. It was through the IG's office and 
our investigation, which my deputy requested, that we learned 
the extent of the expenditures, the frivolity, the contracting 
violations.
    Mr. Denham. On May 3rd of last year, you were made aware. 
And you had a meeting with Mr. Peck, Ms. Brita, several other 
people----
    Ms. Johnson. Yes, my senior staff.
    Mr. Denham [continuing]. To discuss this.
    Ms. Johnson. We discussed this.
    Mr. Denham. And the immediate action that you say you took 
was what?
    Ms. Johnson. The----
    Mr. Denham. Did Mr. Neely go on any more trips?
    Ms. Johnson. I do not know about Mr. Neely's travel.
    Mr. Denham. Yes, he did, a lot. You didn't know about any 
of his travel?
    Ms. Johnson. I did not know--I did not track his travel, 
no.
    Mr. Denham. Did you know about any of his travel? Did 
anybody ever tell you he had upcoming trips?
    Ms. Johnson. I believe that summer, in August, there was a 
meeting of all of the regional commissioners in Austin. I 
believe he was there, so I knew he had traveled to Austin. I 
was not monitoring his trips personally. I had had----
    Mr. Denham. The IG said, get a handle on it. Why wouldn't 
you----
    Ms. Johnson. He gave that instruction to the regional 
administrator.
    Mr. Denham. The President had an Executive order. We are 
cutting Government.
    Ms. Johnson. Right.
    Mr. Denham. We are seeing cuts to the military, to 
veterans. The President sure sees it is a big issue. There are 
seniors being cut. And the inspector general comes to you----
    Ms. Johnson. To the regional administrator. He said that--
he said that himself. In August, he informed the regional 
administrator she needed to get a handle on his travel. I had 
just put her into office.
    Mr. Denham. ``OIG also advised Administrator Johnson to get 
a handle on the RC's travel.'' Did the IG get it wrong?
    Mr. Miller. If I could clarify, I did speak to the regional 
administrator in August of 2011, and I told her to get a 
handle, to get control of Mr. Neely's travel, and to perhaps 
get her CFO to look at his travel.
    In May, when I met with Administrator Johnson, I went 
through the interim report that has the eight pre-planning 
trips to Las Vegas and exactly who was at these trips, which 
includes Mr. Neely at many of them.
    Mr. Denham. I will ask you one last time. What was the 
immediate action you took when you received this report from 
the IG?
    Ms. Johnson. There were a number of things I did. One is I 
appointed Ruth Cox into the regional administrator's office, 
the job in Region 9. I also began the process of creating a 
centralized office with chief administrative services offices 
pulling in a lot of the oversight across the agency for travel 
conferences, FOIA, a number of other things.
    And we continued to work on an agenda that we had had 
undergoing to streamline and shorten conferences GSA runs, and 
we were quite focused on reducing their size and their scope. I 
can give you more detail on that if you would like.
    Mr. Denham. Ms. Norton?
    Ms. Norton. Ms. Johnson, you are very experienced in 
Government. This is why the President appointed you to be 
administrator of GSA. In fact, that was, if anything, a 
promotion, because you had been at GSA before, had done such an 
incredible job. And I think everyone recognizes that, up until 
this point, you had had a very distinguished career.
    One thing that those of us who have been in the Federal 
Government are used to are GAO reports. I am not here talking 
about IG reports. The GAO reports can be particularly deadly. 
And what agency heads and supervisors do when they see the GAO 
on the job is to rush to get in front of the GAO report so 
that, by the time it comes out, they are able to say, we have 
already done XYZ. It is almost a given if you run an agency. 
Here you had virtually run an agency before, and now you ran an 
agency, which is why I think you are getting these questions. 
You are not a novice. You had a storied career. And it is hard 
to understand why you would not have treated--and let me go to 
the bonus.
    The bonus, much like I treat someone or I am sure most 
people do, when you were asked to do a recommendation to 
someone, the first thing I think about is, ``Wait a minute, 
this is on me now. If I recommend that person and that person 
messes up, my reputation is attached to that person.'' That is 
what has happened to you with the bonus.
    You had a specific recommendation after the interim report, 
after the report, that Mr. Peck--or no, Neely--excuse me--was 
to receive a 3. Apparently, Mr. Peck lobbied and he got a 4. I 
understand Mr. Peck can be persuasive. Your own committee, 
though, had looked at all of the circumstances and come out 
with a 3. And you had knowledge of, you knew, or, as it goes in 
the law, you knew or should have known about the interim report 
and that much of that involved a commissioner, a PBS 
commissioner.
    It is hard to understand why you didn't understand that you 
would be implicated, personally, after you knew the interim 
report was out and what it said, if you actually raised this 
man beyond what your own committee had said. That is why it is 
difficult to understand how you, in light of your knowledge of 
the interim report, would have felt it necessary to give Mr. 
Neely a bonus. That is what it is, a bonus, and a bonus 
recommended by you, overruling your own committee.
    And I wish you would--I wish you would make us understand. 
Was it that Mr. Peck offered factors that overcame the 
committee, overcame the interim report? Make us understand why 
you would have raised that from a 3 to a 4.
    Ms. Johnson. Congresswoman, there are two responses I can 
give.
    The first is, as I have said, I treated the interim report 
as inconclusive. It was not the final report. Had I had----
    Ms. Norton. In other words, you thought that the----
    Ms. Johnson [continuing]. The final IG report----
    Ms. Norton. Well, wait a minute.
    Mr. Miller, weren't the allegations in the interim report 
substantiated? And wasn't the point of the interim report to 
say that there were other things that were going to come out, 
not that what was in the interim report should not be given 
value? In fact, didn't your deputies say, ``You should give it 
value''?
    Mr. Miller. Right.
    Ms. Norton. ``That is why we are bringing it to your 
attention.''
    Mr. Miller. Right. What is in the interim report is that 
there is a problem. We may not have the precise numbers, you 
know, we may adjust the numbers from the interim report to the 
final, but this was basically it.
    She also had the final Hats Off report that was final at 
the end of June. And she also had my----
    Ms. Norton. Now, Hats Off was under Mr. Neely?
    Mr. Miller. Correct.
    Ms. Norton. And there were accusations that went to Neely's 
conduct.
    Mr. Miller. Conduct, yes, identified in that report. When I 
briefed Administrator Johnson, I also mentioned that he was 
less than candid, in our opinion, to our special agents when 
interviewed.
    Ms. Johnson. Congresswoman, if it was just short of a final 
report, why did it take 9 months to get it to me? As the time 
went on----
    Ms. Norton. Just a moment, Ms. Johnson. Are you 
criticizing----
    Ms. Johnson [continuing]. I was concerned----
    Ms. Norton [continuing]. The IG for not having rushed 
through to the report? He provides you with an interim report, 
knowing full well that it is taking him longer than he 
expected. He was finding far more problems than he expected. So 
he says, why don't I do something here to alert the top people 
so that they know to proceed now before my final report.
    So how can you criticize Mr. Miller in this for not having 
gone faster? I am glad he didn't go faster because he 
uncovered----
    Ms. Johnson. Yes.
    Ms. Norton [continuing]. Much by not going faster. And, by 
the way, he is still at it.
    Ms. Johnson. Yes. And I am--and we asked for the 
investigation, and it was clearly quite serious because it was 
taking the kind of time and attention it did.
    And so I was--were I to have had the final report when I 
made the bonus decision, I would not be here explaining about a 
bonus. I would not have made that bonus decision.
    Mr. Denham. This is a good point for us to transition back 
to me again and follow up on that same question.
    Let me go through what you did know. You knew that they 
spent four times what they were budgeted, because it says that 
right here. You had this report, you discussed it with your 
staff, you discussed it with Mr. Peck. You knew that they had 
300 people that went to Las Vegas. You knew that they had spent 
$250,000 on a variety of different trinkets. You knew about the 
Hats Off Program and all of the money that they spent there. 
You knew about the pre-planning meetings and the dry run, 
meetings where 31 people went to a planning conference, 20 
people, 8, 15, 65. Nine different planning trips. You knew 
about the comped rooms in Caesars Palace. You new about the 
comped rooms at the Ritz Carlton. You knew that there were many 
different individuals that were taking these trips. You knew 
about the vendors and the possibility of improprieties and 
kickbacks.
    You knew about the team-building exercise. You knew about 
the clowns. You knew about the videos. You knew about the 
$75,000 for the bicycles. You knew that there was a legal 
question that was brought up and then swept under the table 
because they didn't want it in writing. You knew about the 
coins that were printed up for this, the $6,000 stimulus coins. 
You knew about the spending, nearly $3,000 per attendee just 
for the one conference in Vegas alone. You knew that they 
didn't follow legal requirements. Again, several laws being 
broken.
    You knew that this went well beyond Neely. But I think that 
Neely provides the best example of why this goes to the level 
of fraud, waste, corruption. And had he been here today, we 
would have a lot more questions for him as well. But he has a 
good reason to have a lawyer.
    I have looked at both this original, a year-and-a-half ago, 
as well as the final draft. But I can tell you one thing that 
is very clear to me, one thing that I think is very clear to 
Ms. Norton and the entire committee. I mean, it doesn't take a 
whole lot to take a look at all of these various picture, 
parties, see the birthday parties, see the families and friends 
that are traveling--and understand that there is an IG--the 
first IG investigation going on.
    May of last year, you had all of this information that I am 
holding in my hand right now that I just went through on a top 
line. I can tell you, I wouldn't have had anybody traveling. I 
can tell you, I wouldn't have given anybody bonuses, especially 
when the President that appointed you had a directive.
    And your Chief of Staff, Michael Robertson, lets the White 
House know last June. And you still allowed Neely to take all 
these trips and you knew about it? How is that immediate 
action? I am surprised that the administration, that the 
President didn't take immediate action. I am assuming that 
somebody in the White House, somebody in the administration 
said, ``Hey, how is that IG report coming? That investigator 
come up with anything else? We saw a copy of this; it is pretty 
bad.''
    If he is giving you regular meetings, I would assume the 
White House would have somebody going, ``Oh, boy, this is 
really going to look bad. Maybe we ought to get some regular 
meetings too. And if Martha Johnson is not doing something 
about it, maybe we need to replace her. And if Bob Peck is not 
doing something about it, maybe we need to replace him. Maybe 
we need to put Mr. Neely on administrative leave in May of last 
year rather than waiting until the American public finds out 
about it.''
    Nothing happened for a year? And you allowed all of these 
trips to continue on? Multiple conferences? I mean, I can 
appreciate Mr. Tangherlini coming in and suspending the 35 
conferences that are scheduled. How were they even scheduled? 
How didn't you stop those conferences? I am amazed that, with 
the recommendation from Mr. Miller, that more wasn't done to 
stop this over the last year.
    Mr. Miller, I want to go back to something you said. You 
are going to be exhausted by the end of this week. In fact, I 
assume all of you will be. I don't know that--you know, I am a 
freshman, I have only been here for a year-and-a-half, but I 
have not seen four committee hearings on any topic yet.
    But in yesterday's testimony, Mr. Cummings, Congressman 
Cummings, asked you a question. It took 9 months to 
investigate. Ms. Johnson indicated that she was surprised it 
took that long. Were you communicating with her regularly about 
the progress in the investigation, and you replied back, ``Yes, 
we provided information. The briefing--and I asked her to get a 
handle on the RC's travel.'' You testified to that yesterday. 
Did you misspeak yesterday? Are you misspeaking today?
    Mr. Miller. Well, I must have misspoken yesterday. I 
specifically told the regional administrator in Region 9 to get 
ahold of his travel in August of 2011. I did brief 
Administrator Johnson in May of 2011 on the interim report. And 
we went through the interim report. She saw the pre-planning 
travel. I did tell her about the less-than-candid comments. 
And, of course, we also had the Hats Off report that she was 
fully briefed on.
    Mr. Denham. How often were you meeting with Ms. Johnson?
    Mr. Miller. We met in May, May 17th I think. And then we 
met again in August. I don't think we met before that.
    Mr. Denham. I can't imagine that you had any of these 
meetings where you didn't say, ``We have a big issue here.''
    Mr. Miller. Yeah. We met in August, I think maybe twice in 
August.
    Mr. Denham. And during that same period of time, were you 
also meeting with other people that worked within GSA?
    Mr. Miller. Indeed. And my senior staff is in constant 
touch with senior staff throughout GSA. And----
    Mr. Denham. How often do you think you communicated, 
whether it is between staff to staff or you with Ms. Johnson? 
No matter what level, how often is it?
    Mr. Miller. Oh, I think we communicate several times a week 
between our staff and staff at GSA. And I know that my deputy 
communicates regularly with the deputy administrator, and I 
believe they did so about this investigation. And I 
communicated with Steve Leeds, as well, about this 
investigation.
    Mr. Denham. Did anybody from the administration ever 
contact you?
    Mr. Miller. No one from the White House has ever contacted 
me. I have never spoken to them about this report.
    Mr. Denham. So several times a week the OIG contacted GSA 
and let them know----
    Mr. Miller. Well, we contacted----
    Mr. Denham. As you found new stuff, did you let them know?
    Mr. Miller. No, because it is an investigation, and we need 
to keep the investigation confidential in order to do the 
investigation.
    And when we contact people throughout GSA, it is about many 
matters. We are involved in audits, we are involved in many 
things. So the contacts between my office and GSA are on many 
topics.
    Regarding this----
    Mr. Denham. Let me understand the OIG's--you know what? My 
time has expired. I will come back to this.
    Ms. Norton?
    Ms. Norton. Thank you, Mr. Chairman.
    Now, occasionally, the distress of the committee comes out. 
I think one of the Members said, you know, we ought to just get 
rid of--perhaps we ought to just get rid of GSA. Well, it is 
precisely because GSA serves an indispensable function in the 
Government that this is such a serious matter. So we have to do 
it the hard way.
    And I am looking--I am trying to be as remedy-oriented as I 
can. On the one hand, there are issues of misconduct. Either 
the law enforcement system, our hearings will bring out some, 
or the system within GSA now under Mr. Tangherlini are going to 
ferret those out.
    But we are still going to be left with the existing 
structure. I believe in good personnel, but I don't believe 
that the Government or any other agency or private business can 
always assure that there will be precisely the people in charge 
who will keep things going. So I am therefore looking very 
carefully at the structure.
    And, Ms. Johnson, the structure you found in place had been 
put in place by an acting GSA administrator. He is now on 
administrative leave because he was in real life a PBS 
commissioner. His name is Paul Prouty, I understand it. He is 
apparently responsible for the present structure of the region 
at GSA.
    Now, the regional administrator is a political appointee. 
But under Mr. Prouty, that administrator apparently was made no 
more than a figurehead. You say you appointed Ms.--I forget her 
name.
    Ms. Johnson. Ruth Cox.
    Ms. Norton. Yes, the new administrator. But as it appears 
from his organization of the GSA, before his organization, or 
shall I say reorganization, the regional administrator 
apparently had direct control over the two commissioners--the 
PBS commissioner, the FAS commissioner.
    Under his reorganization, that was no longer the case, and 
you have the reporting straight up that we have talked about 
today. It looks as though this person you appointed was 
something like a figurehead, just the way the CFO, also called 
the GSA CFO, was a figurehead. And yet, you kept this 
structure, this structure put in place by an acting GSA 
administrator, when you could have looked at it and seen, it 
seems to me, that your own, it seems to me, your own position 
had been weakened.
    Remember, he is a PBS commissioner. He makes sure that 
these people report around the regional administrator and 
straight up to the commissioners, the respective commissioners. 
That means, if I am coming in, that I am looking at less 
authority for me, because my own person there no longer has the 
authority that she had before.
    Why did you accept this organization, this form of 
organization that was not put in by a Presidential appointee 
but was put in by someone who acted for a very long period of 
time when there was no Presidential appointee--in fact, he may 
have gone over into two administrations--and left in place this 
structure that we have now with a series of figureheads, 
including at the regional level, where Mr. Neely was able to do 
his work when he was both regional administrator, of course--
and PBS commissioner didn't much matter, because Prouty, before 
him, had reorganized the place so that the regional 
administrator wasn't left with much authority anyway. And now 
Prouty is on administrative leave because he is implicated in 
what happened in Region 9.
    Could you tell us whether you were satisfied with the 
structure you found in place and why you left it in place?
    Ms. Johnson. The structure that I found in place was one in 
which the regional administrators did the performance reviews 
of the regional commissioners. So, in that sense, they were not 
toothless. They were not--I can't remember the word you used. 
They weren't just figureheads.
    Ms. Norton. They did the what? I am sorry.
    Ms. Johnson. They gave performance reviews to the regional 
commissioners. The regional administrator had to review the 
regional commissioners. They signed off on it. They got input 
from the commissioners, but they signed off----
    Ms. Norton. So what did they have to do with budget? What 
did they have to do with function? You know, this is where you 
understand line authority.
    Ms. Johnson. This is the matrix, yes, this is a matrix, 
because they would receive their budgets from their 
commissioners, but their performance review would come from 
their regional administrators, who had the ultimate signoff 
with input from the commissioners.
    And the shift, as I understand it, the shift that happened 
was that the contracting authority, the head of contracting 
authority was moved from the RA to the regional commissioners, 
and that was the change under Paul Prouty.
    Should I have changed that back? I believe it is something 
we should have reviewed thoroughly. It had been in place for a 
couple of years. Frankly, there were so many other things that 
we were undertaking, it wasn't at the top of my list. Perhaps 
it should have been.
    Ms. Norton. Look what Mr. Prouty did. As acting 
administrator, he changed the agency so that he went back to 
his old position as PBS commissioner in the region with 
enhanced authority that he himself had made, and your regional 
administrator had diminished authority, and you, yourself, 
therefore, had diminished authority because of it. I have to 
say, Ms. Johnson, I think you were snookered by your own PBS 
commissioner.
    Ms. Johnson. There is one piece to that that makes it a 
little bit difficult. I believe that the way to think about 
that contracting authority is either it came up to me through 
the regional administrator or it came up through the 
commissioner. It was still coming to me. So I don't know if it 
is six, one-half dozen, or seven to five, but it was a shift, 
and it still devolved up to me in terms of contracting 
authority.
    Ms. Norton. Mr. Chairman?
    Mr. Denham. It was still coming up to you, but you were 
doing nothing about it. That is the issue here. That is why we 
continue to come back around on this issue.
    Mr. Miller, when you do an investigation and you come back 
with this preliminary report, what normally happens?
    Mr. Miller. Well, this was an unusual report. We did the 
interim report so that we could stop some of the waste in the 
future. So it is unusual. Usually when we do an investigation, 
we will complete the investigation, make a referral to the 
Department of Justice, and there is a criminal prosecution or 
perhaps a civil case that is brought.
    Mr. Denham. So, as of May 3rd, you did a preliminary 
report, ongoing investigation, a couple of investigations now, 
but you did a preliminary report----
    Mr. Miller. Correct.
    Mr. Denham [continuing]. So that you could stop the abuses 
right there.
    Mr. Miller. Correct.
    Mr. Denham. And so, after May 3rd, you started having 
multiple conversations per week with GSA, either through you or 
through your staff, from everybody from Ms. Johnson to Ms. Cox 
when she was appointed.
    Mr. Miller. Well----
    Mr. Denham. How was it that the spending did not stop? How 
was it that the trips did not stop?
    Mr. Miller. I do want to clarify that when I said we have 
multiple contacts, and we have contacts throughout my office, 
my senior staff contacts senior staff throughout GSA, it is on 
many different issues. On this particular issue, because it is 
an investigation and because of the nature of it, we wouldn't 
be going out of our way to tell GSA people about this, because 
it is an investigation.
    Mr. Denham. But you went out of your way in this case.
    Mr. Miller. Well, we went out of----
    Mr. Denham. You gave them a heads-up. You let them know 
that there was a big problem here.
    Mr. Miller. Yes.
    Mr. Denham. And you told them to get a handle on RC's 
travel.
    Mr. Miller. I told the regional administrator that in 
August. And we did the preliminary--the interim report in May 
to alert the administrator.
    Mr. Denham. You came back in December of last year. Ms. 
Brita alerted you to Mr. Neely's 17-day trip which he was 
taking his wife on. You got the emails of the party that they 
were going to have and the----
    Mr. Miller. It is the other way around.
    Mr. Denham [continuing]. The different places they were 
going to travel to.
    Mr. Miller. It is the other way around. We contacted Ms. 
Brita, the deputy administrator, about the travel and said, 
``Do you know about this travel? Is it really necessary?'' And 
Ms. Brita contacted the regional administrator, and----
    Mr. Denham. Ms. Cox.
    Mr. Miller. Yes. And I believe----
    Mr. Denham. Did Ms. Cox let you know that this 17-day trip 
was going to happen?
    Ms. Johnson. I did not know about the trip from either Ms. 
Brita or the inspector general or Ms. Cox.
    Mr. Denham. Has Ms. Cox been fired?
    Ms. Johnson. I did not fire her.
    Mr. Denham. Has she been put on administrative leave?
    Ms. Johnson. I do not know. I am not at the agency anymore.
    Mr. Denham. Has she resigned?
    Ms. Johnson. I do not know.
    Mr. Denham. Mr. Tangherlini, Ms. Cox, who was aware of this 
17-day trip, who was made aware of the ongoing OIG 
investigation, has she been fired?
    Mr. Tangherlini. No, she has not.
    Mr. Denham. Put on administrative leave?
    Mr. Tangherlini. No, she has not.
    Mr. Denham. She hasn't resigned?
    Mr. Tangherlini. No, she hasn't.
    Mr. Denham. Any reason to believe that she was not aware of 
the May 3rd report?
    Mr. Tangherlini. I am still reviewing all of the outcomes 
of the analysis of the inspector general, all of the outcomes 
of this hearing, and we are still conducting--still undertaking 
personnel actions.
    Mr. Denham. Do you dispute whether Ms. Brita alerted Ms. 
Cox to this 17-day trip that was coming up?
    Mr. Tangherlini. I have no reason to dispute that.
    Mr. Denham. Is she irreplaceable?
    Mr. Tangherlini. I haven't been there long enough to know 
who on the staff is replaceable or irreplaceable, so that is 
part of the review I want to do--understand who we have, what 
role they play, and how they can continue to serve.
    Mr. Denham. Ms. Johnson testifies that she took immediate 
action. April 3rd, Mr. Peck is fired. April 3rd, Steve Leeds is 
fired. Mr. Neely and four others that represent the different 
regions are put on administrative leave on the 3rd. And I 
believe that is the same day that you resigned, Ms. Johnson.
    This committee gets the information on April 2nd--or we 
called our hearing on April 2nd. And it wasn't until we called 
a hearing and prepared subpoenas before any action was taken. A 
year-and-a-half prior to that was when you had the May 3rd 
report. What immediate action was taken?
    Ms. Johnson. When we received the final draft of the report 
from the IG, we spent some--we absorbed it, we met with the IG 
further to deepen our understanding of the background evidence. 
I called Ruth Cox in to begin some disciplinary activities. I 
placed the regional commissioners--I placed Jeff Neely on 
administrative leave. I placed the regional commissioners on--
all four regional commissioners on administrative leave, 
ultimately. I had gone----
    Mr. Denham. Were you directed to do so?
    Ms. Johnson. No. No. These were my decisions.
    Mr. Denham. Why didn't you make the decision on Ms. Cox? 
What was different with her?
    Ms. Johnson. I admonished all of the regional 
administrators. I then removed the two people in the chain of 
command who were the political appointees. Ruth Cox reported to 
Steve Leeds. I removed Steve Leeds, and I resigned. So I took 
out the senior people.
    Mr. Denham. Ms. Norton?
    Ms. Norton. Mr. Chairman, I only have one more question.
    I do want to welcome the seniors from Cardozo High School 
who have come into the room. It is rare for visitors to see a 
hearing in progress. I can't say this has much to do with the 
District of Columbia, but Mr. Tangherlini is here.
    And I do want to say for the record that the President took 
action without hesitation. And the action was not simply to 
discharge some or indeed all of the high officers of the 
agency. The President also brought in Dan Tangherlini. And I 
can say from my own personal experience that it was an 
appointment made for this situation. Mr. Tangherlini has been 
the administrator of the District of Columbia, a very big and 
complicated city; done the same thing at Metro. So here as an 
administrator not only with impeccable management skills but 
also impeccable ethics.
    But you see what you have laid out for you to do.
    I have one question about these conferences. In one of my 
other committees, we are focusing on teleworking, and we are 
having, finally, some progress in getting teleworking. I don't 
know about teleconferencing. And I do want to say this also for 
the record: As somebody who manages people right now in the 
Congress and managed much more people in prior positions in my 
life, I value what face-to-face meetings can do. My own staff 
is in the same city. But the district office staff--and there 
are two district offices--and the congressional office staff 
don't have face-to-face meetings that often, but they have 
telephone meetings--now, of course, it is a much smaller staff 
than you would have in an agency--they have telephone meetings 
every Monday morning.
    I would like to ask, because I don't know enough about the 
value of these face-to-face conferences, but I would like to 
ask you, Mr. Tangherlini, since the conference is the vortex of 
this problem, what criteria you will use--I know you don't know 
what you are going to do now--in determining whether these 
face-to-face conferences serve a legitimate need. And how much 
of the work that is now being done in face-to-face conferences 
do you think, in light of the priority the Federal Government 
and the administration is putting on teleworking, could be done 
with more teleconferencing?
    Mr. Tangherlini. Well, I have to say that GSA is already a 
leader in teleconferencing, telepresence, moving out on ideas 
such as webinars. That is one of the things we are asking 
ourselves to be, is more like GSA for GSA, and ask ourselves, 
can we challenge ourselves to use some of the technology we 
have developed, challenge ourselves to use some of the 
innovations that have come out of GSA over the last several 
years and use this to overcome the costs associated with some 
of the travel for conferences and training.
    I will say that we believe that there is huge value in 
high-quality training, interaction between Federal employees 
who are working on the same areas and ideas. When you are 
dealing with things like the Federal acquisition system, you 
need to have skilled, trained people managing those resources, 
because literally billions of dollars go through those folks. 
And so we want to make sure that they have the highest quality 
training.
    So our chief administrative officer office, which has been 
set up under the former administrator, we have given extra 
powers to oversee these conferences, to oversee the training, 
to oversee the travel. And, in fact, I issued on April 15th 
guidelines on conferences and travel that ask those questions 
first: Does this have to happen by actually having people come 
together? Can we use Federal facilities instead of renting a 
conference facility to do this kind of training? And what is 
the value we are going to get out of these activities?
    Ms. Norton. Thank you very much, Mr. Chairman.
    Ms. Johnson. Mr. Chairman, could I correct a couple of 
dates here? I just want to be really clear about the record.
    We put Mr. Neely on administrative leave on March 19th. I 
removed Steve Leeds and Bob Peck and resigned on April 2nd. I 
just wanted to be sure that is in the record correctly.
    Mr. Denham. Thank you.
    In June of last year, your Chief of Staff--Michael 
Robertson is your Chief of Staff, correct?
    Ms. Johnson. He was my Chief of Staff, yes.
    Mr. Denham. He was the liaison to the White House prior to 
that?
    Ms. Johnson. Before that he was--well, he was in the policy 
shop for a while, and before that he was the White House 
liaison, yes.
    Mr. Denham. He did work on Senator Obama's staff before 
Senator Obama became President Obama?
    Ms. Johnson. Yes.
    Mr. Denham. In June of last year, he informed Kimberly 
Harris, White House counsel, about this report. Did you ever 
have subsequent meetings with the administration?
    Ms. Johnson. First of all, I learned that yesterday in the 
testimony. I did not realize he had informed anyone at the 
White House.
    Mr. Denham. Did you ever inform anybody at the White House?
    Ms. Johnson. We held meetings with the White House after we 
received the draft report in----
    Mr. Denham. After May 3rd?
    Ms. Johnson. After--sorry?
    Mr. Denham. After May 3rd, when the draft--when the report 
came out last year.
    Ms. Johnson. No. I did not talk to the White House until 
after the final draft report was delivered to us in late 
February.
    Mr. Denham. Which was when?
    Ms. Johnson. When the----
    Mr. Denham. The final.
    Ms. Johnson. The draft report came to us at the end of 
February. February--I don't have----
    Mr. Miller. In terms of terminology, Mr. Chairman, we 
termed the May 3rd report the interim report.
    Mr. Denham. Uh-huh.
    Mr. Miller. And our practice, when we have a final report, 
we give the agency 30 days to respond. At the end of 30 days, 
we will publish everything. We technically call that a draft. 
And that draft report was delivered on February 17th with the 
30-day notice, which Administrator Johnson asked us to extend 
it by another 30 days, which we did.
    Ms. Johnson. So after that draft report was delivered to 
me, I was in some discussions with the White House, but not 
before.
    Mr. Denham. You had no discussions with the White House 
last year.
    Ms. Johnson. No, I did not.
    Mr. Denham. Anybody in the administration above you? I am 
just trying to figure out what the pattern here is and how deep 
this goes.
    Ms. Johnson. I did not talk to the White House. I 
understand from yesterday's hearing that my Chief of Staff 
spoke to someone in June.
    Mr. Denham. March 17th you received the draft.
    Ms. Johnson. February.
    Mr. Denham. I am sorry, February 17th you received the 
draft?
    Ms. Johnson. Right.
    Mr. Denham. So what we have up here is the May 3rd 
preliminary?
    Mr. Miller. Interim report.
    Mr. Denham. Interim report. I want to make sure I use the 
correct terminology. So almost a year passes by. Nine months 
passes by. You continue your report, you finalize your 
investigation, you put that in a nice package, you give that 
over to Ms. Johnson on February 17th, that is the draft?
    Mr. Miller. Correct.
    Mr. Denham. Your immediate action was what?
    Ms. Johnson. We reviewed the report. He gives us the draft 
report so that we can review it and respond to him, and then he 
will publish the final report with our response. We immediately 
realized that we agreed with all the recommendations in the 
report. I then contacted our chief human resources officer and 
our general counsel so that I could begin to frame up the 
disciplinary actions that we needed to take. We did that work. 
We met more with the IG. We put Jeff Neely on administrative 
leave.
    Mr. Denham. Wait a minute. You put Jeff Neely on 
administrative leave March 19th?
    Ms. Johnson. Yes.
    Mr. Denham. You received the draft report on February 17th. 
You said you took immediate action?
    Ms. Johnson. Yes. I received the report. As I said, I 
consulted with our HR staff, with our general counsel.
    Mr. Denham. Before you went back to Mr. Miller and 
requested an additional 30 days did you think--did you find 
some things in the report that you thought that were false?
    Ms. Johnson. That were false? No, I had no reason to think 
that anything was false.
    Mr. Denham. Anything misleading?
    Ms. Johnson. No. As I said, I accepted the entire report.
    Mr. Denham. So you accepted--you didn't have any concerns 
about the report itself when you received it on February 17th. 
You asked for an additional 30 days. Why did you ask for an 
additional 30 days if you didn't have any problem with the 
report?
    Ms. Johnson. The amount of material that the IG had as 
underlying evidence which he had gathered over something like 
15 months was fairly substantial. Our human resource officer 
and general counsel needed to dig into some of that to be sure 
to be able to frame up the letters that we needed to be sending 
in order to put people on various, on the various disciplinary 
actions that we were beginning to take. It was a phenomenal 
amount of material. And so we----
    Mr. Denham. A lot of material. But did you have any reason 
to believe that Mr. Neely did or did not go on these trips? Did 
you believe that all the trips that were detailed in this 
report were factual?
    Ms. Johnson. Yes, I accepted the report.
    Mr. Denham. OK. So if you accepted the report and you 
didn't put Mr. Neely on administrative leave until March 19th, 
why would you let him go on a 17-day trip that you have got 
emails on that show that it is a party for he and his wife? 
That happened in February. And then in March another trip to 
Hawaii and then another trip to Napa. So the immediate action--
I understand. I don't agree with you on why it took so long to 
put Mr. Neely on administrative leave. I think it is absurd. I 
think it is a disjustice to the taxpayer. But how did it go on 
for 2 more months after you had the report, the final report? 
Decisions should have been made easily May 3rd of last year, 
but February 17th of this year you said you received the 
report, you agreed with the report and then you took immediate 
action, yet Mr. Neely still went on a 17-day trip which he took 
his wife on, which they had a party and a birthday present. You 
have the emails to that. And then he went on another trip to 
Hawaii for 4 days and another trip to Napa where the entire 
executive team went and spent over $40,000 without even the 
travel expenses on there.
    Do you see how I have a hard time understanding how you 
took immediate action.
    Ms. Johnson. Congressman, upon receiving the report, I 
recognized that although I had tasked senior leaders with 
various responsibilities and oversight, clearly management 
controls had been breached. I fired the two people most 
immediately in the chain of command and I resigned.
    Mr. Denham. On February 17th you received a report, you had 
no problems with the report, you knew that it was factual. Did 
you meet with the White House then?
    Ms. Johnson. Not immediately.
    Mr. Denham. Have you ever met with the President over this 
topic?
    Ms. Johnson. No.
    Mr. Denham. Any other administrative--anybody else within 
the administration over the last 45 days?
    Ms. Johnson. We briefed people in the White House, yes.
    Mr. Denham. At what point?
    Ms. Johnson. I can dig out my calendar to help me remember. 
It was in the week of--as we were putting--it was in the week 
of, I believe, and I don't have access to my schedule anymore 
so this is as well as I can recollect, the week of March 18th 
and the week of March 25th. They were information meetings. We 
needed them to know what we were doing.
    Mr. Denham. And who did you meet with?
    Ms. Johnson. I met with people in the White House counsel's 
office, people at the Office of Management and Budget, I met 
with people in the communications staff. These are people in 
the meetings I held in the White House counsel's office. I also 
met with people in the Chief of Staff's office. Oh, and 
Presidential Personnel, since we were taking action on 
political appointees.
    Mr. Denham. Who within general counsel did you meet with?
    Ms. Johnson. I met with--hang on a sec. To the best of my 
memory we met with the general counsel, the White House 
counsel, Kathy Ruemmler.
    Mr. Denham. Anybody else within counsel?
    Ms. Johnson. There might have been one or two more staff 
there but I didn't--I don't remember and I don't know their 
names.
    Mr. Denham. How about within budget?
    Ms. Johnson. We--in one of the meetings Jeff Zients came 
through, stopped in briefly. He is the head of Office of 
Management and Budget. And also met with Danny Werfel, Dana 
Hyde and Boris Bershteyn, who is at OMB. Those meetings were 
about policy. We wanted to talk with them about possible 
conference policy, travel policy because they are clearly 
interested in how we can move forward from this kind of event 
and create ever better policies to try to prevent this thing, 
the same question----
    Mr. Denham. Who did you meet within communications?
    Ms. Johnson. I was in a meeting in the general--in the 
White House counsel's office. There were communications people 
there. Jennifer Palmieri I believe was there. And I think there 
might have been others, but I didn't know their names. She 
might have been the only one.
    Mr. Denham. Chief of Staff's office?
    Ms. Johnson. I met with--in the meetings there was 
representation from the Chief of Staff's office. I believe Mark 
Childress is in the Chief of Staff's office and Alyssa 
Mastromonaco. She was there briefly. Ultimately I met with Jack 
Lew as well.
    Mr. Denham. And in Personnel?
    Ms. Johnson. Nancy Hogan, the head of Presidential 
Personnel.
    Mr. Denham. Just the two of you?
    Ms. Johnson. No. She was in one of the other meetings.
    Mr. Denham. So you had meetings the week of March 18th, you 
made the decision to put Mr. Neely on administrative leave on 
the 19th?
    Ms. Johnson. To the best of my recollection, that is the 
right date, yes.
    Mr. Denham. You went back to the White House or the 
administration March 25th. Why did it take all the way up until 
April 3rd or April 2nd to fire Mr. Peck, to fire Mr. Leeds and 
to put all of the other administrators on leave?
    Ms. Johnson. Well, there are----
    Mr. Denham. I am trying to understand what you found out 
between those.
    Ms. Johnson. What we were doing was we were working, I was 
working particularly with our HR senior executive and a person 
from the general--senior executive in the general counsel's 
office to understand what were the particular, what was the 
particular evidence that the IG had uncovered and how we could 
fit that into letters of admonishment and what kind of 
disciplinary actions they fit against. This required some 
understanding because it needed to be documented and we needed 
to create documents in order to execute those activities.
    Mr. Denham. You had all those documents.
    Ms. Johnson. No. We had to write letters, we had to 
create--and there are two officials involved in a dismissal so 
you need to get the person in, get them to go through the 
evidence and have them understand it and so on. It is not--it 
is not something you get done quickly. There is a process, 
there is a due process here that we needed to follow.
    Mr. Denham. Each of those different meetings, I assume you 
met with White House general counsel to let them know that you 
were going to be firing people and putting people on 
administrative leave, so you were seeking counsel from them.
    Ms. Johnson. No, I was informing them. And the meetings 
were about helping them understand what Ms. Norton is so 
concerned about, helping them understand the structure, who the 
people were in the reports, what was going on. They don't know 
the internal workings of GSA. So I needed to explain who and 
where and how, how this all sorted out. And I also needed to 
explain to them the various disciplinary options that we had 
and that we were working through them, yes.
    Mr. Denham. And budget, the reason to meet with them?
    Ms. Johnson. I met with them predominantly to talk about 
policy. They were eager to understand what we might suggest 
around the kinds of policies they could create so that this 
wouldn't happen again.
    Mr. Denham. Communications?
    Ms. Johnson. She attended the meeting in the White House 
counsel's office. Basically it was largely a meeting with the 
White House counsel and she was there in the room.
    Mr. Denham. Dan Pfeiffer was not in any of those meetings?
    Ms. Johnson. Who?
    Mr. Denham. Dan Pfeiffer.
    Ms. Johnson. Dan Pfeiffer. Not that I am aware of.
    Mr. Denham. Jack Lew.
    Ms. Johnson. I met with Jack Lew in a separate meeting, 
yes.
    Mr. Denham. Which? In the Chief of Staff's meeting?
    Ms. Johnson. I met with him in his office with Nancy Hogan 
of Presidential Personnel.
    Mr. Denham. That was the week of March 18th?
    Ms. Johnson. I think that was the next week.
    Mr. Denham. So the purpose of all of these various meetings 
with all of these different individuals within the 
administration was to inform them what had come out of the IG's 
report. Did you give them each a copy of the IG report? Did the 
IG--did you give them----
    Ms. Johnson. I did not. I believe--I did not.
    Mr. Miller. I had no contact with the White House about 
this report.
    Ms. Johnson. However--right, I did not either.
    Mr. Denham. Mr. Tangherlini, when did you get a copy of 
this report?
    Mr. Tangherlini. I got a copy of this report on Monday, 
April 2nd.
    Mr. Denham. So the purpose of all these different meetings 
with the White House was to let them know the decisions that 
you were about to make over the next couple of weeks?
    Ms. Johnson. Including my resignation.
    Mr. Denham. When did you let them know that you were 
planning on resigning?
    Ms. Johnson. I had that meeting with Jack Lew the Friday 
before, so it must have been March 31st--30th, March 30th, in 
which we discussed that I was planning on resigning and I was 
planning on terminating, removing the other two political 
appointees.
    Mr. Denham. Ongoing investigation. We are still going to 
follow up with you, Mr. Tangherlini, on finding out how deep 
this goes. I appreciate the fact that you are doing an internal 
audit and going to share that with this committee. And I assume 
over the next couple of days or the next couple of hearings, 
especially with this investigation going on, when somebody does 
get fired I am sure that we will hear about it. I would like to 
hear about it from you before I hear about it from the media.
    I assume that when somebody goes to jail that will come 
through the DOJ. We will probably hear that from the press 
before we hear it from you. And I think a bigger issue here is 
what gets paid back, what do the taxpayers own? I would like to 
know who you are going after and what you are asking them to 
pay, and when they actually pay the money I would like to know 
that, too.
    Mr. Tangherlini, we are drafting legislation to require GSA 
to obtain approval specifically for its administrative budget 
each year. We want to ensure that there is transparency. We 
should have had this information a long time ago. But there is 
no reason the taxpayers should not know where these 
expenditures are going forward. I know you haven't seen that 
legislation yet, but at least the idea, the concept of this do 
you support?
    Mr. Tangherlini. I would be happy to work with the 
committee on any such language.
    Mr. Denham. Do you have any issue with providing greater 
transparency to this committee?
    Mr. Tangherlini. We have no issue with providing greater 
transparency.
    Mr. Denham. Do you have any issue sharing the annual budget 
with the Public Buildings Fund with this committee?
    Mr. Tangherlini. I can't see why we would have any problem 
with that.
    Mr. Denham. Thank you. As we talked about here--well, let 
me just confirm, the Hats Off program is done?
    Mr. Tangherlini. Yes, it is.
    Mr. Denham. We talked about the L.A. Courthouse. We have 
great concern as a committee on that issue. Not only that it is 
moving forward but that a new prospectus wasn't done. Are you 
planning on doing a new prospectus on that project?
    Mr. Tangherlini. Mr. Chairman, at this time I don't know 
enough about that project to be able to do that.
    Mr. Denham. I would request that you take a look at that 
issue and provide this committee with your recommendation on 
how you plan on proceeding forward on that issue.
    A much smaller issue. I am also planning on putting through 
a bill on banning all coins. It sounds like Mr. Walz will be 
more than happy to cosponsor that issue with me. Any reason in 
the future why we need to be spending taxpayer dollars on 
coins, commemorative coins?
    Mr. Tangherlini. I can't think of any reason as it pertains 
to GSA, but again I don't know enough to know how these have 
been used.
    Mr. Denham. Do you--you don't know of any reason why we 
would need to?
    Mr. Tangherlini. I can't think of any reason, no.
    Mr. Denham. To say I am disappointed would be an 
understatement. I have been outraged in my district, angry. Mr. 
Walz knows that because we work on a lot of veterans issues 
together, and what we see our veterans going through is very 
personal. To see this type of abuse is, it goes beyond 
irresponsible.
    I have had a good relationship with Mr. Peck, we really 
have. As a freshman coming in I had a lot to learn. We have 
communicated quite often on cell phone and discussed how we 
could get the Civilian Property Realignment Act, how we can 
change the way of doing business here. I am disappointed that a 
lot more of this didn't come into light during those 
conversations. I would just say I hope that you and I have a 
better relationship so that you feel comfortable that we can 
have an off-the-record conversation if something does arise, 
whether it is in this investigation or whether future 
investigations need to happen.
    I am very proud of the fact that this committee most often 
works as a bipartisan committee. I mean, I think Republicans 
and Democrats probably agree on this committee more than most 
here in Washington. So it is really disheartening when we see 
things being hidden from the taxpayer, that there aren't better 
decisions being made.
    So in closing, I would just say I look forward to having a 
better relationship, a more open relationship, that we can 
share some of this information and work together not only in a 
bipartisan level but on a bicameral level and making sure that 
we can address this stuff together.
    I would like to thank each of our witnesses for their 
testimony today, some of their very frank and difficult 
testimony. And if there are no further questions, I ask 
unanimous consent that the record of today's hearing remain 
open until such time as our witnesses have provided answers to 
any questions that may be submitted to them in writing, and 
unanimous consent that during such time as the record remains 
open for additional comments offered. Without objection, so 
ordered.
    I would also like to thank our witnesses again for their 
testimony, and again if no other questions, this committee 
stands adjourned.
    [Whereupon, at 1:55 p.m., the subcommittee was adjourned.]
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