[Senate Hearing 112-967]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 112-967

                       OVERSIGHT HEARING ON THE 
                 GENERAL SERVICES ADMINISTRATION (GSA)

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 18, 2012

                               __________

  Printed for the use of the Committee on Environment and Public Works




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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York

                Bettina Poirier, Majority Staff Director
                 Ruth Van Mark, Minority Staff Director
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                            C O N T E N T S

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                                                                   Page

                             APRIL 18, 2012
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Heller, Hon. Dean, U.S. Senator from the State of Nevada, 
  prepared statement.............................................     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     7
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland     9
Johanns, Hon. Mike, U.S. Senator from the State of Nebraska......    15
Baucus, Hon. Max, U.S. Senator from the State of Montana.........    16
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......    16
Boozman, Hon. John, U.S. Senator from the State of Arkansas......    17

                               WITNESSES

Miller, Hon. Brian D., Inspector General, U.S. General Services 
  Administration.................................................    18
    Prepared statement...........................................    19
Tangherlini, Daniel, Acting Administrator, U.S. General Services 
  Administration.................................................    46
    Prepared statement...........................................    48

 
     OVERSIGHT HEARING ON THE GENERAL SERVICES ADMINISTRATION (GSA)

                              ----------                              


                       WEDNESDAY, APRIL 18, 2012

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full Committee met, pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(Chairman of the full Committee) presiding.
    Present: Senators Boxer, Inhofe, Cardin, Baucus, Carper, 
Udall, Johanns, Barrasso, and Boozman.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. The Committee will come to order. Thank you 
to the press.
    First, before I start my statement, I want to enter into 
the record a letter that I received from Majority Leader Harry 
Reid that makes clear that well run and cost effective 
conferences are productive and provide an important economic 
boost to our communities. So I ask unanimous consent to enter 
Senator Reid's letter into the record.
    [The referenced information was not received at time of 
print.]
    Senator Boxer. Do you have a similar letter from Senator 
Heller?
    Senator Inhofe. Yes, I do. I ask unanimous consent that 
Senator Heller's statement be put into the record.
    Senator Boxer. Absolutely.
    [The prepared statement of Senator Heller follows:]

                    Statement of Hon. Dean Heller, 
                 U.S. Senator from the State of Nevada

    Thank you, Madam Chairman and Ranking Member Inhofe. I 
appreciate the opportunity to address this Committee today and 
submit a statement for the record regarding the Inspector 
General of the General Services Administration's (GSA's) report 
on the 2010 Western Regions Conference (WRC).
    Like many taxpayers I was shocked and disappointed to read 
the Inspector General's report that found expenditures at this 
conference were excessive, wasteful, and in total ignorance of 
Federal procurement laws and internal GSA policy on conference 
spending.
    The Committee today is right to look into the GSA's 
practices and provide corrective oversight to ensure that hard 
earned taxpayer dollars are spent wisely by this 
Administration.
    I want to be clear, this is not an issue about location. 
This is the result of poor decisionmaking and leadership by the 
administrator of the GSA.
    Las Vegas is one of the greatest locations in the world for 
a conference, a meeting, or vacation. With over 148,000 hotel 
rooms and 10.5 million square feet of meeting and exhibit space 
citywide, it is ideally suited to host companies and 
organizations large and small.
    In fact, this past January Las Vegas hosted the Consumer 
Electronic Show which had more people attend than the Iowa 
Caucuses.
    I fully agree that it was inappropriate for the GSA to 
waste taxpayer dollars, but it is not inappropriate to come to 
Las Vegas for conventions and meetings. The actions of the GSA 
should not reflect negatively on Las Vegas, and I am asking all 
of my colleagues to be mindful of that as you conduct your 
investigation.
    The viability of the economy in Nevada is dependent upon 
the volume of visitors to our State. Last year nearly 39 
million visitors came to Las Vegas alone. These visitors come 
because Las Vegas continues its reign as the No. 1 trade show 
and convention destination in North America. Las Vegas hosts 
thousands of meetings and conventions annually and generates 
billions in revenue.
    This translates into jobs. In Nevada, having a strong 
tourism industry means more jobs in my State. Las Vegas, 
Henderson, Lake Tahoe, and Reno have long been favorite 
recreation destinations for millions of visitors both 
domestically and more increasingly internationally.
    The entire southern Nevada economy is heavily dependent on 
the hotel, gaming, and convention industry, which employs over 
one-quarter of the region's labor force. Plain and simple, 
tourism is the lifeblood for businesses and job creation in 
Nevada.
    Right now Nevada leads the Nation in unemployment. Job 
creation is and continues to be my top priority.
    It is no secret that politicians from Washington, DC, and 
this Administration have had a negative impact on the Las Vegas 
economy due to their words spoken publicly. For example, in 
2009 attendance to conventions and meetings in Las Vegas fell 
by 13.6 percent. The following year attendance fell by another 
7.2 percent. In total from 2009 to 2010 Las Vegas lost 1.4 
million conventions attendees.
    While I recognize it is unfair to blame the total decline 
on a few ill advised lines in a speech, there is no doubt that 
spoken words by politicians clearly have had an impact on the 
Las Vegas economy.
    Las Vegas and the Great State of Nevada should not be 
political targets because of GSA's misconduct. Las Vegas is an 
excellent destination for conferences, and I am proud of my 
State's ability to entertain and accommodate businesses, 
organizations, and individuals from all over the world.
    Again, while several congressional committees investigate 
this issue I would respectfully advise my colleagues that it 
was not the location that caused the misuse of taxpayer funds. 
The convention services my State offers are the best in the 
world, and no town in Nevada should be singled out due to the 
poor judgment by the GSA.
    It is my hope that all of my colleagues will focus on the 
misconduct of the GSA and push for new initiatives that spur 
growth in the tourism industry instead of blaming Nevada for 
the mistakes of incompetent Government bureaucrats.
    Thank you, Madam Chairman.

    Senator Boxer. I am going to ask that we each have 7 
minutes for our opening statement.
    The latest misconduct at the GSA makes me cringe, cringe 
for the taxpayers who expect every agency in their Government 
to fulfill their mission with integrity. And it makes me cringe 
for the good people at GSA who work so hard every day and have 
been humiliated by a few bad actors.
    To those who betrayed the public trust, let me be clear: 
the party is over. It is over because of GSA Inspector General 
Brian Miller, who is a bi-partisan appointee of President 
George W. Bush and President Barack Obama. And the party is 
over because of GSA Deputy Administrator Susan Brita, an Obama 
appointee who blew the whistle and took this matter to the 
Inspector General. And the party is over because the new Acting 
Administrator of GSA, Mr. Daniel Tangherlini, is a no-nonsense 
leader from the U.S. Department of the Treasury who aims to 
clean up this mess.
    This is not the first episode of misconduct at the GSA. The 
Carter administration uncovered one in 1978 and 1979, when a 
nationwide investigation into longstanding corruption resulted 
in prosecutions for bribery, for fraud, and protections for 
whistleblowers in the agency. Then there was more misconduct 
during the Bush administration. The first occurred when the 
chief of staff to the GSA Administrator traveled with Jack 
Abramoff to Scotland, even though Mr. Abramoff had business 
before the GSA. In 2011 this chief of staff went to prison.
    In 2006 the Bush-appointed GSA Administrator steered a 
contract to a friend. And in 2007 she organized a political 
call with 30 appointees to ``help her friends win their 
elections.'' That violated the Hatch Act. The Administrator 
repeatedly clashed with the Inspector General, this Inspector 
General, in one report comparing his enforcement efforts to 
``terrorism.'' She resigned in 2008.
    And now here we go again in 2012, this time involving what 
clearly looks like waste, fraud, abuse, and possible criminal 
violations. The most recent example of misconduct involves a 
few individuals who sought personal gain and exhibited scorn 
toward the public and exhibited scorn toward our President.
    There must be justice and restitution for this. And those 
who are responsible for this outrageous conduct and who 
violated the public trust must be held accountable.
    The GSA Administrator resigned, and she should have. Two of 
her aides were fired, and they should have been. Others are on 
administrative leave, awaiting further action. The Acting 
Administrator and the IG at GSA, who we are very pleased to 
have before us today, are working closely together to ensure 
that anyone with more information comes forward; they have set 
up a hotline for that, and they have sent out the word.
    Checks and balances on the regional offices have got to be 
put in place, and many have already. Many conferences, in my 
understanding, have been stopped or reduced in scope. And GSA 
estimates that nearly $1 million has been saved by the actions 
so far.
    Regional financial offices must now report to the Chief 
Financial Officer. Awards programs have been shut down, and 
reimbursements are being demanded from specific employees. The 
outrageous behavior of a few irresponsible, unethical, and 
perhaps law breaking individuals are overshadowing GSA's 
achievements following President Obama's cost saving 
directives, focused on energy efficiency, reduced computing 
costs, and disposal of unneeded Federal property.
    GSA offers critical services to all Federal agencies. But 
it is time to stop this series of failings that have occurred 
over four decades and over three Administrations. It is time to 
send the clearest of signals that this type of conduct and this 
kind of betrayal of the public trust will not be tolerated.
    Anyone in any agency who puts their own interests above the 
country's interests will suffer the consequences. I really want 
to recognize the efforts to shine the light on the misconduct 
that took place at GSA. Mr. Miller, Mr. Tangherlini, thank you 
for taking Deputy Administrator Susan Brita's concern seriously 
and following through on your public trust. This Committee will 
support you and encourage you to clean house at the GSA.
    And before I yield to my friend and colleague, let me put 
into the record an addendum that the Inspector General, Brian 
Miller, gave us, both sides of the aisle, today. But he didn't 
have the time to get it into his testimony. It goes through the 
various steps that he believes should be taken at the GSA. The 
first one is centralizing the program and budget management. 
The second is centralizing agency information management.
    The third is what he calls getting back to basics. GSA 
needs to refocus on its core mission, procurement and building 
operations. He said he found that many agency contracting 
personnel didn't understand fiscal law or the Federal travel 
regulations or were unaware of the existence of agency policies 
that directly governed their daily work. This is unacceptable, 
he writes, and I would agree.
    Then he said, get out of the matrix. As the former GSA 
Administrator testified, GSA employee supervision is not 
presently linear, it is a matrix. Because many high level 
personnel report to two supervisors. Each supervisor can 
deflect supervisory responsibility onto the other, or claim to. 
And he says the matrix is really a sieve. And then he talks 
about requiring procurement accountability.
    And he goes into the fact that the agency needs to make 
sure that everything that is done has accountability attached 
to it. I just want to thank the IG for this. It just shows what 
I think is so important about this hearing, and when Senator 
Inhofe asked me to hold it, what I was concerned about was that 
we would only do a look-back. We need to do a look-back and 
have justice served. But we need to look forward.
    So I am very happy that we have this opportunity to have 
you here, so that we can talk about (A), how we hold people 
accountable and get to the bottom of the mess over there, but 
(B), how we move forward to make sure that we don't have a 
repeat of this nightmare that has now occurred over so many 
decades and so many Administrations.
    I want to thank the two of you for being here today.
    Is Susan here, Susan Brita? Could you stand? I just wanted 
to say--I personally am going to ask you to stand. I want to 
thank you so much that you had the courage to step out in what 
was a very difficult situation. Thank you.
    Senator Inhofe.
    [The referenced information follows:]
    
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          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman. You had 
mentioned a comment made by Senator Reid. Let me just elaborate 
a little bit more on that.
    I was surprised at people, when they say the fact that it 
was held in Las Vegas would have something to do with it; we 
are dealing with corrupt people here, Madam Chairman. And what 
happened in Las Vegas would just as likely happen if it were 
held in Chicago or New York or any place else.
    Senator Boxer. Right.
    Senator Inhofe. So I think it is totally unfair for people 
to somehow draw a line there.
    I do thank you for holding the hearing. I have had a little 
history with this Committee. Before I came to the Senate in 
1994, I spent 8 years on the committee over in the House. And 
it happened that we were the minority, but I was the ranking 
member on the GSA subcommittee.
    And when you look at the overwhelming stuff they deal with, 
it is, if there is anyone who has a propensity to do something 
dishonest, that is where they ought to be. They deal with huge 
numbers. I have always been concerned about that, and there is 
a long history of this happening.
    But I think this serious waste and abuse of the taxpayers' 
money, as well as possible fraud, and I understand the Office 
of the Inspector General, and I applaud the work that Brian 
Miller has done on this. It hasn't been easy; I know it has 
taken an awful lot of time. After the release of the IG report 
on April 3rd, I sent a letter to Chairman Boxer requesting that 
the Committee hold a hearing to look at the IG's findings. I 
also requested that both IG Brian Miller testify along with the 
Acting Administrator. So I want to thank you, Madam Chairman, 
for doing that.
    In a way, this is not going to be--if there are any media 
here looking for what they saw yesterday, it ain't going to 
happen here. We have the two good guys here.
    Senator Boxer. Right.
    Senator Inhofe. So we are not going to be accusing anybody; 
we are just wanting to find out where we can go from here. I 
think it was articulated very well by the Chairman.
    Of course, Mr. Tangherlini, you are kind of in a position 
where you are going to have to do some pretty uncomfortable 
things. But I know a little bit about you, and I think we have 
the right guy doing them.
    The report describes a number of disturbing findings from 
the investigation. Some of the highlights were the GSA spending 
on the conference planning was excessive, wasteful, and in some 
cases impermissible. Travel expenses for the conference 
totaling over $100,000, just not believable. Catering costs, 
$30,000. The GSA failed to follow contracting regulations in 
many of the procurement associated with the WRC and wasted 
taxpayers' dollars. The GSA incurred excessive expenses for 
food, $146,000 on catered food, $5,600 on semi-private catered 
in-room parties. I mean, it goes on and on.
    I think that I do want to have the whole statement, this 
has already been aired throughout the media. It is kind of 
interesting, this morning, Madam Chairman, I was on the 7 
o'clock CNN, it was supposed to be on this subject. And we went 
through about 12-minute interview, they never even mentioned 
this. So I think people are getting a little tired of it 
already. Nonetheless, it is real, it is a problem; we are going 
to have to deal with it.
    Since the release of the report, the GSA Administrator, 
Martha Jackson, has resigned, and the head of the Public 
Buildings Service and the Administrator's top advisor were 
fired. Further, there are 10 career employees who have been 
placed on administrative leave. These dismissals highlight the 
seriousness of the findings of the IG report.
    I want to thank our counterparts in the House for their own 
responsible oversight, and again, thank the Chair for beginning 
our own oversight. And by the way, on the oversight, a lot of 
people, somebody was asking this morning on a radio show or 
something, why are you doing this? It is our constitutional 
duty. We have oversight responsibility. There is a reason that 
both the House and the Senate do, because the House and the 
Senate are often coming from different poles. It is something 
that we have to do; there is just not a choice.
    I say beginning, because I believe that this goes beyond 
our one-time event. I am concerned that this type of waste has 
become an embedded part of the culture of the GSA. The 
conference occurred during a recession and after the 
President's executive order for an ``efficient, effective and 
accountable Government'' and calls for elimination of waste. 
One can only wonder what kind of wasteful spending would be 
incurred in a better economy.
    As a Committee with oversight responsibilities over GSA and 
the Public Buildings Service, today I hope we can find out how 
this happened and examine the safeguards that GSA has put in 
place to prevent this from happening again. It would be prudent 
to continue oversight hearings in the future to ensure this 
culture of wasteful spending has come to an end. We have an 
opportunity to restore the public's trust.
    And I think this goes beyond this. I remember when we were 
the majority, the Republicans were the majority, and I happened 
to be the Chair of the Subcommittee on Nuclear. They had not 
had an oversight hearing in 12 years. And they actually 
welcomed it. I don't think that any bureaucracy should go 
without oversight hearings. And I am going to recommend that we 
expand the number, I have not made a request for them, but I 
think this will perhaps put us in a position of where we will 
do that.
    So I thank the Chair for holding the hearing and look 
forward to hearing from our excellent witnesses.
    [The prepared statement of Senator Inhofe follows:]

                  Statement of Hon. James M. Inhofe, 
                U.S. Senator from the State of Oklahoma

    Thank you, Madam Chairman, for calling this oversight 
hearing on GSA's Public Buildings Service 2010 Western Regions 
Conference. The IG report, released on April 2nd, highlights 
serious waste and abuse of taxpayer money as well as possible 
fraud. I understand that the Office of Inspector General 
received information on the possible misuse of taxpayer money 
from a GSA employee, and I commend this staffer for stepping 
forward.
    After the release of the IG report, I sent a letter to the 
Chair requesting that the Committee hold a hearing to look into 
the IG's findings. I also requested that the IG, Brian Miller, 
testify. So, I am pleased that you agreed to have this hearing 
and that Mr. Miller and the new Acting Administrator of GSA, 
Dan Tangherlini, are joining us today.
    The report describes a number of disturbing findings from 
the investigation. Some of the highlights are:
     GSA spending on conference planning was excessive, 
wasteful, and in some cases impermissible
     -Travel expenses for conference planning totaled 
$100,405.37, and catering costs totaled $30,000
     GSA failed to follow contracting regulations in many of 
the procurements associated with the WRC and wasted taxpayer 
dollars
     GSA incurred excessive and impermissible costs for food
     -$146,537.05 on catered food and beverages (including 
$5,600 for three semi-private catered in-room parties and $44 
per person daily breakfasts)
     -$30,207.60, roughly $95 per person, for the closing 
reception and dinner
     GSA incurred impermissible and questionable miscellaneous 
expenses
     -Mementos for attendees, purchases of clothing for GSA 
employees, and tuxedo rentals
     GSA's approach to the conference indicates that 
minimizing expenses was not a goal
     -The PBS Region 9 Commissioner/Acting Regional 
Administrator instructed those planning the conference to make 
it ``over the top'' and to make it bigger and better than 
previous conferences. Several suggestions to minimize expenses 
were ignored
    Since the release of the report, the GSA Administrator 
resigned, and the head of the Public Buildings Service and the 
Administrator's top advisor were fired. Further, 10 career 
employees have been placed on administrative leave. These 
dismissals highlight the seriousness of the findings in the IG 
report. I want to thank our counterparts on the House side for 
their own responsible oversight and again thank the Chair for 
beginning our own oversight. I say beginning because I believe 
that this goes beyond a one-time event. I am concerned that 
this type of waste has become an imbedded part of the culture 
at GSA. This conference occurred during a recession and after 
the President's Executive Order calling for an ``Efficient, 
Effective, and Accountable Government'' and calls for 
eliminating waste and enhancing transparency. One can only 
wonder what kind of wasteful spending would be occurring in a 
better economy. It is time to get at the root of these spending 
problems. While I appreciate the IG and Acting Administrator 
joining us today, it would be helpful if we could hear from 
some of those that were directly involved and find out how 
things have changed.
    As the Committee with oversight responsibilities over GSA 
and the Public Buildings Service, today I hope we can find out 
how this happened and examine the safeguards GSA has put in 
place to prevent this from happening again. It would be prudent 
to continue oversight hearings in the future to ensure this 
culture of wasteful spending has come to an end. We have an 
opportunity to restore the public's trust and make certain that 
Federal agencies are acting in the best interest of the 
American people.
    Again, I thank the Chair for holding this hearing and look 
forward to hearing from our witnesses.

    Senator Boxer. Thank you very much.
    Senator Cardin, followed by Senator Johanns, Senator 
Baucus; each will have 7 minutes.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
            U.S. SENATOR FROM THE STATE OF MARYLAND

    Senator Cardin. Madam Chairman, first of all, thank you 
very much for holding this hearing, and I thank the Ranking 
Member. This is very important.
    We all were shocked by the Inspector General's report 
revealing the shocking and shameful extravagant spending that 
the GSA Western Regional Service Division engaged in in 2010. I 
think it is important to understand that this event is 
indicative of a culture of this agency that goes back many 
years. The Inspector General Miller and the Deputy 
Administrator that brought this problem to his attention should 
be commended for investigating this event, bringing this 
problem into the public eye and calling for reforms within the 
agency.
    What is most important now is that Congress work with the 
agency to advance smart and thoughtful reforms. The fact is, 
GSA is vitally important to the function of the Federal 
Government. GSA makes sure that the Federal Government pays its 
rent on time, keeps the lights on in public buildings, manages 
Federal priorities, makes sure our Federal workers--like the 
scientists at FDA and social workers at VA, who are working 
hard for the public good--have the tools and resources they 
need to get the job done.
    That said, I often do not agree with GSA's approach to its 
business. In April of last year I held a GSA oversight hearing, 
the first GSA oversight hearing this Committee had had in 
years, to examine GSA's management and service of Federal 
courthouses. I have been in meetings with GSA public officials 
to discuss prospective locations for Federal facilities where 
GSA unabashedly refers to the agency in which they are seeking 
the space for as the client. And they view themselves as the 
broker, much the way a private real estate firm hired to find 
office space for a private sector company would. This private 
sector perception pervades this public sector agency. I think 
it may have had its roots in GSA's problems.
    Many colleagues often call for the Government to run more 
like a business. GSA takes pride in the incorporation of 
private sector sensibilities and practices into its work. There 
are some cues Government can take from the private sector in 
its operations and management that are valuable.
    I would argue that GSA, in part, because of its function as 
a real estate and fleet manager and contracting agent is so 
similar to businesses in the private sector, has led to a total 
blurring of the line between what actions are appropriate for a 
public sector agency to engage in. Reforms that return 
perspective and accountability to GSA are in order. GSA's 
clients are the American people, not the Social Security 
Administration or the FDA or the National Science Foundation. 
And the American people are not shareholders; they are 
taxpayers. The extent of the wastefulness of taxpayers' dollars 
on the Western Regional Conference is shocking. Perhaps it is 
reflective of an agency tied so closely to the real estate and 
property management industry, having hired many business 
professionals along with their business practices from the 
private sector that the agency thinks it is perfectly 
acceptable to hold a convention similar to those in the private 
sector.
    Suzy Khimm, an economic policy reporter for the Washington 
Post, published an interesting commentary piece for the Post on 
April 14th. Madam Chairman, I will submit the entire article 
for the record.
    But let me just quote one sentence from her article: ``The 
real aim of contracting services is ultimately neither to make 
money nor to spend it, but to achieve a greater good.''
    I hope this hearing will advance that greater good for our 
Nation and for our taxpayers.
    [The referenced information follows:]
    
    
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    [The prepared statement of Senator Cardin follows:]

                 Statement of Hon. Benjamin L. Cardin, 
                U.S. Senator from the State of Maryland

    Thank you, Madam Chairman, for holding this hearing. The 
need for a thoughtful explanation of the investigation into 
GSA's conduct and spending in the Western Region is absolutely 
necessary as Congress weighs appropriate actions to take to 
reform the agency.
    The findings of the Inspector General's report reveal the 
shocking and shameful extraneous spending that GSA's Western 
Regional Service divisions engaged in to hold its 2010 Western 
Regional Conference in Las Vegas, Nevada.
    The subversion of procedure as a means of inflating costs 
in order to provide a lavish experience for participants, as 
evidenced by the exorbitant cost of line items in the budget, 
is offensive.
    I think it is important to understand that this event is 
indicative of the culture of this agency that goes back many 
years.
    Inspector General Miller and the Deputy Administrator that 
brought this problem to his attention should be commended for 
investigating this event, bringing this problem into the public 
eye, and calling for reforms within the agency.
    What's most important now is that Congress work with the 
agency to advance smart and thoughtful reforms and not just 
browbeat the administration responsible for uncovering a 
problem within one of its agencies.
    The fact is GSA is vitally important to the function of the 
Federal Government. GSA makes sure the Federal Government pays 
its rents on time, keeps the lights on in public buildings, 
manages Federal properties, makes sure our Federal workers--
like the scientists at the FDA and social workers at VA who are 
working hard for the public good--have the tools and resources 
they need to do their jobs.
    That said, I often do not agree with the GSA's approach to 
its business. In April of last year I held a GSA oversight 
hearing, the first GSA oversight hearing this Committee had 
held in years, to examine GSA's management and service of 
Federal courthouses.
    I've been in meetings with GSA public buildings officials 
to discuss prospective locations for Federal facilities where 
GSA unabashedly refers to the agency in which they are seeking 
space for as the ``client,'' and they view themselves as the 
broker, much the way a private real estate firm hired to find 
office space for a private sector company would. This private 
sector perception pervades this public sector agency, and I 
think it may be at the root of GSA's problems.
    Many colleagues often call for Government to run more like 
a business. GSA takes pride in the incorporation of private 
sector sensibilities and business practices into its work, and 
there are some cues Government can take from the private sector 
in its operations and management that are valuable.
    I would argue that GSA, in part because its function as a 
real estate and fleet manager and contracting agent is so 
similar to businesses in the private sector, has led to a total 
blurring of the lines between what actions are appropriate for 
a public sector agency to engage in.
    Reforms that return some perspective and accountability to 
GSA are in order. GSA's clients are the American people, not 
the Social Security Administration, or the FDA, or National 
Science Foundation. And the American people are not 
shareholders; they are taxpayers.
    The extent of the wastefulness of taxpayer dollars on the 
Western Regional Conference is shocking, but perhaps it's 
reflective of an agency tied so closely to the real estate and 
property management industry, having hired many business 
professionals along with their business practices from the 
private sector, that the agency thinks it's perfectly 
acceptable to hold a convention similar to those in the private 
sector.
    Suzy Khimm, an economics policy reporter for the Washington 
Post, published an interesting commentary piece for the Post on 
April 14th. I will submit her full piece for the record, but I 
think this excerpt sums up the issue and the challenge we, as 
legislators, face nicely:
    ``Like other Federal agencies, the GSA has been subject to 
past administrations' efforts to eliminate government waste. 
Bush's 2001 directive to make government more like business 
through `competitive sourcing': identifying which government 
activities should be performed by the private sector and to 
force more competition between those bidding for the 
government's business.
    ``In theory, at least, that kind of directive should have 
made the GSA more effective at its job. But rather than 
emulating the private sector's virtues, some officials at the 
agency ultimately adopted some of its vices, prioritizing quid 
pro quo relationships and equating lavish expense with power.
    ``The larger concern for government reformers is how all of 
this wheeling and dealing may be diminishing the sense of 
purpose in some agencies. The real aim of contracting services 
is ultimately neither to make money nor to spend it, but to 
achieve a greater good.''

    Senator Boxer. Thank you, Senator.
    Senator Johanns.

            OPENING STATEMENT OF HON. MIKE JOHANNS, 
            U.S. SENATOR FROM THE STATE OF NEBRASKA

    Senator Johanns. Madam Chair, thank you very much. Let me 
thank the Ranking Member and the Chair for holding this 
hearing. I appreciate the attendance of the witnesses today.
    I am going to be very, very brief. I am looking at the 
clock, and I have an ag members meeting in about a half an 
hour. I am hoping to be here long enough to hear your 
testimony, and if I have questions following that I will 
probably submit those questions in written form for the record.
    But let me offer just a couple of thoughts. First of all, 
to the people who have been involved in bringing this to light, 
we thank you for that. I have to imagine if this happened at 
this conference there are other issues out there. I can't 
imagine that this was just an isolated incident.
    My experience with Federal employees is that the vast, vast 
majority of Federal employees are there working hard, they want 
to do the right thing, they want to follow the rules. They 
don't want to get themselves into the kinds of problems we see 
today. That is the vast majority of Federal employees.
    Unfortunately, circumstances like this really cast things 
in a very poor light. And I might add, appropriately so. These 
expenses and what you see here in the record is really amazing. 
I mean, really astounding.
    My interest is going to be today and going forward the 
question of what are you putting in place to change the 
structure and the culture of how GSA operates. Oftentimes GSA 
is the piece of the Federal Government that interfaces with the 
public. They are out there working to negotiate contracts and 
that sort of thing, doing the work that they are empowered to 
do. So it is just critically important that whatever happens 
from here forward, we have something put in place that puts 
this agency on the right path, gives them the right direction, 
sets the right course, changes the culture so some Senate 
member is not back here in 5 or 10 or 15 or 20 years going 
through the same things again.
    So I am so anxious today to hear from the witnesses. I have 
not had time to study the addendum, but I appreciate the fact 
that you are putting out ideas on how we can deal with this in 
the future. My hope is that following this hearing there might 
even be an opportunity to do some individual visits with 
Senators to say, this is what we are thinking about, this is 
the direction we think this agency needs to go forward.
    With that, again, Madam Chair, thanks for having the 
hearing.
    Senator Boxer. Thank you so much, Senator.
    Senator Baucus, followed by Senator Barrasso.

             OPENING STATEMENT OF HON. MAX BAUCUS, 
             U.S. SENATOR FROM THE STATE OF MONTANA

    Senator Baucus. Thank you, Madam Chairwoman.
    Thomas Jefferson once said, when a man assumes a public 
trust, he should consider himself public property. What galls 
me about this is, this waste, the extravagance, in contrast 
with a lot of people I met at home, in my State, during this 
last recess, who are struggling to make ends meet.
    For example, in eastern Montana, there is something called 
the Bakken Formation. It is heavily impacted by all the gas 
development. The police force is stretched so thin, they can't 
begin to deal with all the issues. Police officers start at 
$40,000, their salary is $40,000 a year. And then they see 
$800,000 spent, and wonder, what is going on here?
    The little town of Culbertson I visited, they are 
scratching to try to get money for a sewage system, trying to 
piece it together here and there. When they see this waste, 
they wonder, what, we could use that $800,000 for a sewage 
system in our little town. Otherwise, we can't afford it, we 
can't finance it.
    In the little town of Ingomar, Montana, it's very small, 
population about two hands; they are trying to save their post 
office. The rent is $700 per month for that post office. And 
they see $130,000 for eight pre-conference trips to Las Vegas. 
It is just galling. It is absolutely galling when you see what 
the dollars could otherwise be spent for--and for legitimate 
purposes--where people are really struggling.
    I will just tell you, I think Senator Cardin touched on it, 
Senator Johanns, and I agree with them, there is something 
rotten in Denmark. Something is not quite right here. It is not 
just this. There has to be a lot more. And I very much credit 
you, Mr. Tangherlini, for taking over here. I have a lot of 
trust in you. I think you are the kind of guy who is going to 
straighten all this out.
    But it is going to take a lot of work, a lot of work. And 
it can't be something you can just deal with, not only paper 
over, but just kind of do it moderately, you can't do that. 
You've got to go to the core and get this thing, really, the 
culture problem rooted out at GSA. I just thank you so much, 
Madam Chair, for this hearing. I just urge you and demand of 
you, almost, as a person working for 1 million people, that 
this is what they want. This is what my employers want. I work 
for all those folks I talked about; you work for all those 
folks I talked about. Everybody at GSA does. That is the public 
trust that we have to honor.
    Senator Boxer. Thank you very much, Senator.
    And now we are going to turn to Senator Barrasso.

           OPENING STATEMENT OF HON. JOHN BARRASSO, 
             U.S. SENATOR FROM THE STATE OF WYOMING

    Senator Barrasso. Thank you very much, Madam Chairman. 
Thank you also, Senator Inhofe, for holding this hearing.
    I want to thank the Inspector General and his team of 
special agents involved in this investigation. I agree with 
what Senator Baucus has said and what we have heard from 
Senator Johanns. This investigation, it has exposed the waste, 
the fraud, and the abuse that the American people really resent 
so much. This hearing isn't about where this wasteful 
conference took place; it is really about arrogance and abuse 
of power.
    You look at the mission of the GSA's Public Buildings 
Service, to provide superior value, it says, superior value to 
the American taxpayer. The GSA Western Region Conference was a 
blatant disregard for the hard working taxpayer of this 
country. There was a systematic failure to follow the law and 
abide by the procedures to spend taxpayer dollars 
appropriately.
    These events did not occur as a result of lack of controls; 
these actions occurred because of a culture, a culture of 
excess within the GSA and a lack of respect for the rules and 
the regulations and the needs of the taxpayers of this country, 
a country with $15 trillion in debt. You run through the list 
of $6,300 for coins in velvet boxes, $9,000 conference 
yearbook, $58,000 audio visual services, and $136,000 pre-
conference scouting trips plus a clown, a mind reader; the GSA 
employees involved in this incident have broken whatever small 
amount of trust that the American people may still have had 
with this Government.
    And it is not just the excesses that have angered so many. 
It is also the way in which GSA has conducted business. It has 
used deceptive tactics to get around the rules, to hide the 
true costs of the conferences. The Inspector General has found 
that the GSA provided contracts to vendors that undercut 
competition by disclosing other bids, that the GSA violated 
contracting rules by awarding sole source contracts to vendors. 
Your report found that the contracts in some cases violated 
set-asides for small business. You can go on and on and on.
    The Administrator has resigned, two senior GSA officials 
have been fired, 10 individuals have been put on administrative 
leave. But that is not enough. The taxpayers demand more. A few 
ceremonial terminations and shuffling employees into new 
positions or departments are not enough. I understand Jeff 
Neely, who is at the center of this investigation, is on 
administrative leave and is still getting paid. Mr. Neely and 
those who planned the conference knowingly defrauded the 
American people so they could throw a party on someone else's 
credit card. This is unacceptable. We demand that those 
individuals, we must demand that those individuals be held 
accountable for their actions.
    This, I believe, is just the tip of the iceberg, and I hope 
the Committee conducts additional oversight hearings on the 
excessive GSA spending.
    Madam Chairman, thank you so very much for holding the 
hearing. I look forward to hearing from the witnesses and more 
from them in the future.
    Senator Boxer. Thank you very much, Senator.
    Senator Boozman.

            OPENING STATEMENT OF HON. JOHN BOOZMAN, 
            U.S. SENATOR FROM THE STATE OF ARKANSAS

    Senator Boozman. Thank you, Madam Chairman.
    In the interest of time, I think I would just like to 
associate myself with the remarks of my colleagues. I 
appreciate your leadership and Senator Inhofe's leadership. We 
have our differences in the Committee, but I think this is 
something that we are all united on, going forward and finding 
out exactly what has happened and punishing those who are at 
fault. Then also put in the safeguards, so importantly, so this 
won't happen in the future.
    With that I yield back. Thank you.
    Senator Boxer. Thank you so much. Both Senator Inhofe and I 
appreciate that.
    Now we are going to turn to the Inspector General first; is 
that all right with you, Mr. Tangherlini? All right.

  STATEMENT OF HON. BRIAN D. MILLER, INSPECTOR GENERAL, U.S. 
                GENERAL SERVICES ADMINISTRATION

    Mr. Miller. Good morning, Chairman Boxer, Ranking Member 
Inhofe, members of the Committee. Thank you for the opportunity 
to be here today.
    While my report details what went wrong at GSA in 
connection with the Western Regions Conference, I would like to 
take a moment to focus on what went right. The system worked; 
the excesses of the conference were reported to my office by a 
high ranking political appointee. And our investigation ensued. 
No one prevented us from conducting that investigation or 
obstructed what turned out to be a lengthy investigation.
    As each layer of evidence was peeled back, we discovered 
that there was more to look into. So our investigation 
continued.
    While some have suggested that the investigation took too 
long to produce the final report, anyone familiar with law 
enforcement investigations understands that when you turn over 
one stone, you often find more stones that need to be turned 
over as well. Most people understand the need to be careful and 
certain before making public allegations such as those 
contained in the report. Because careers and reputations are on 
the line, and my office does not take that lightly.
    Moreover, the GSA Administrator ultimately had control over 
the date on which this report was released, because it was the 
Administrator's response to the final report that triggered its 
public release.
    The system also worked in that people responsible for the 
conduct detailed in my report are being held accountable. It is 
my understanding that after the White House received the final 
report, the Administration took swift action. A new Acting 
Administrator was appointed, senior officials were fired and 
one resigned.
    Finally, the system has been strengthened by the release of 
the report. The public attention it received in the media and 
from both Houses of Congress and the strong commitment to our 
efforts demonstrated by the Acting Administrator, Dan 
Tangherlini, while not one of many career employees and 
political employees who were involved in the Western Regions 
Conference ever came forward and reported the waste and abuse 
that occurred, perhaps for fear of reprisal, GSA's honest, hard 
working employees now have been empowered to bring issues to 
our attention, and they are doing so. We have more work than 
ever.
    I look forward to answering all of your questions. Thank 
you.
    [The prepared statement of Mr. Miller follows:]
    
    
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    Senator Boxer. Thank you so much, Mr. Miller.
    Mr. Tangherlini.

  STATEMENT OF DANIEL TANGHERLINI, ACTING ADMINISTRATOR, U.S. 
                GENERAL SERVICES ADMINISTRATION

    Mr. Tangherlini. Good morning, Chairman Boxer, Ranking 
Member Inhofe, members of the Committee. My name is Daniel 
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 America's taxpayers have placed in us.
    I speak for the overwhelming majority of GSA staff when I 
say that we are 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 irregularities.
    I will also immediately engage GSA's Inspector General. As 
indicated in the joint letter that Inspector General Brian 
Miller and I sent to all GSA staff, we expect an 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 will ever happen 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 who 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 Western Regions Conferences. I have also canceled 
35 previously planned conferences, saving nearly a million 
dollars in taxpayer expense. I have suspended the Hats Off 
stores and have already demanded reimbursement from Mr. Peck, 
Mr. Robert Shepard, and Mr. Neely for private, in-room parties. 
I have canceled most travel through the end of the fiscal year 
agency-wide and 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 make sure 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 and effectively 
disposing of unneeded government property.
    We believe that there has seldom been a time of greater 
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 the basics, conduct this work better than ever.
    At GSA our commitment is to our service, our duty, and our 
Nation, 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. 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 refocus this agency and get back to the basics: 
streamlining the administrative work of the Federal Government 
to save taxpayers money. I look forward to working with this 
Committee moving forward, and I welcome the opportunity to take 
any questions at this time.
    Thank you.
    [The prepared statement of Mr. Tangherlini follows:]
    
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    Senator Boxer. Thank you both very much.
    As Senator Inhofe said, you are the good guys in all of 
this, and Susan is a good gal, Susan Brita, who came forward, 
as a political appointee, to blow the whistle. And it resulted 
in the President's Administrator resigning, as she should have, 
and two people being fired.
    And again, I say to Ms. Brita, thank you for your courage. 
This is not easy. I have done a lot of work on whistleblower 
protection. And I know how hard it is, and the scorn that is 
oftentimes heaped on those who have the courage to step 
forward. And you did it for your country, and we appreciate it 
at this Committee.
    As I researched this and I realized how many scandals there 
have been involving GSA, it really shakes you up. Because when 
you look back, President Carter thought he cleaned up the mess 
way back in the 1970s. And they put people in jail for bribery 
and fraud, and they put in whistleblower protection and all of 
that. So now you move forward, then you see two scandals under 
George Bush, and now this horrible scandal under President 
Obama. This is decades long.
    So I guess the question I have for you, and I don't expect 
you to have a pinpointed answer, but what is it about the 
structure of the GSA that leads us back to these scandals? In 
other words, the expression is, fool me once, you know, OK. But 
again and again, four scandals? Three Administrations?
    So is it, do you think, as I read your recommendations, I 
say to the Inspector General, and I ask Mr. Tangherlini as 
well, is it the fact that there hasn't been a centralized check 
and balance so that you have these regional offices gone wild 
here if they have the wrong leadership? Is that what we need to 
fix?
    How many regions do we have in GSA, Mr. Miller? And are you 
enforcing more of a centralized, at this point, checks and 
balances system, right away, for all the regions, or if you 
have just gone after the Western Region?
    Mr. Miller. Madam Chair, there are 10 regions of GSA, plus 
the District of Columbia, so essentially 11 regions. The 
Western Region is made up of 7, 8, 9 and 10, and they 
informally call themselves the Western Region. They have this 
conference. There is no Eastern Region, Northern Region, 
Southern Region. They don't, as far as I know, have these 
conferences.
    Senator Boxer. I don't want to just dwell on the 
conferences. Because if there are people who are cheaters, and 
there are people who are bad actors, they are going to figure 
out another way to steal. Forget the conferences. So my point 
is, you are telling me there are 10 regions plus DC, I 
understand there are 12,000 employees, is that correct?
    Mr. Miller. Over 12,000, and I guess Willie Sutton was 
asked, why do you rob banks, he said that is where the money 
is. And part of the problem is, part of the reason there is a 
lot of crime and fraud, waste and abuse at GSA is a lot of 
money flows through GSA. It handles money on behalf of other 
agencies. It has millions of dollars flowing through it. And it 
has over 12,000 employees. In any town that you have in the 
United States of 12,000 or more, you always have a jail. So you 
will always have people doing criminal things and dumb things 
and silly things. It is no different, unfortunately, in the 
Federal work force, you have people doing criminal things and 
dumb things. That is why you need inspectors general to monitor 
for fraud, waste and abuse.
    Senator Boxer. I agree. So what I am trying to say is, have 
you looked at this notion, you have looked at this notion of 
more centralization and checks and balances. Have you done that 
for every region or have you just now done this for the western 
areas because of this problem? Obviously a lot of them, I 
think, think this is a systemic problem. So I am asking you if 
these reforms are going to go forward. Are you recommending to 
Mr. Tangherlini that he centralize most of the operation?
    Mr. Miller. As you can tell from my supplemental statement, 
that is the direction we think the GSA should go. But how GSA 
is managed is essentially an agency function and is at the 
discretion of the Administrator. It is a little out of my lane.
    Senator Boxer. So given the recommendations of the 
Inspector General that there be more checks and balances and 
more centralization, what is your take on it at this point, Mr. 
Tangherlini?
    Mr. Tangherlini. I already, with only a couple of weeks of 
experience with the organization, already have strong 
indication that we need to centralize certain functions. Late 
last week, I took administrative steps to centralize the 
finance function so that our Chief Financial Officer of the 
General Services Administration can actually serve in that 
capacity straight out to the regions as well. From what I 
understood, the regions had some autonomous ability to, once 
their budgets were allocated, spend within those allocations. 
And so one of our initial moves is to make sure that that Chief 
Financial Officer actually has visibility straight down into 
the expenditures at the regional level. There is a lot of work 
we have to do build the systems necessary to have visibility 
into the regional expenditures.
    We have also taken steps to consolidate the procurement 
oversight function as well. What we think we can do is continue 
to have some level of autonomy so that there is innovation and 
that the regions can reflect the needs of the local area. But 
we need to have clear accountability. Now, we are going to look 
at the entire structure of the agency top to bottom, we are 
going to undertake a process, we are already involved in that, 
to look at the way the system is structured so we can ask 
ourselves the kind of clean sheet of paper types of questions, 
how should it be structured.
    Senator Boxer. Good. Well, I want to say this, and I will 
hold for my next round, but Senator Inhofe alluded to this, as 
did others. We are going to need to have more oversight. So how 
many months do you think it will take you before you are ready 
to put these new systems in place? Because we would like to 
have you back to give us a progress report.
    Mr. Tangherlini. I think--we have already started making 
changes. So that is part of what I am here to report on today. 
We have the good fortune of having the budget process, the 2014 
budget development process, we are entering into that now. So I 
think we are going to use our 2014 budget development process, 
which culminates in recommendations to OMB in September and a 
budget in February, we are going to use that process to start 
building into this.
    But that doesn't mean we are going to wait until the 
outcome of that process to make necessary changes.
    Senator Boxer. Good. So let me just say, I will discuss 
this further with my Ranking Member, whom I respect so much. 
And I think around September, perhaps late September, we ought 
to have you come in to talk about this. Because we have to stay 
on this. In one sense you are fortunate, because you are coming 
in on the heels of this, and everyone is going to give you the 
latitude. Don't listen to those voices who say, we can't 
change.
    Senator Inhofe.
    Senator Inhofe. Thank you, Madam Chairman. Senator Johanns 
has an ag commitment he needs to get to, and I don't, so I 
would like to have you go ahead of me in line here.
    Senator Johanns. Thank you very much. That is very kind of 
you. I appreciate the courtesy.
    Mr. Miller, let me start with you. I have to assume that 
with everything that has happened, that has transpired, that 
you are also looking at other areas within the GSA. As you have 
gone through this, in your thinking about what happened and 
going forward, what thoughts would you have, what 
recommendations would you have in terms of how the GSA just 
better manages what is happening? Because this is beyond 
normally what an inspector general would run into. I think 
everybody would agree on that.
    How do we stop this? How do we put the right structures in 
place to empower the leadership at GSA to make sure that we are 
not back here again?
    Mr. Miller. Thank you for the question. We have to deter 
others from committing criminal acts, from committing fraud, 
waste, and abuse. We had a region and a regional commissioner 
that was doing all sorts of things that are documented in our 
report and we produced to Senate committees and House 
committees.
    But the ultimate deterrent is criminal prosecution. And we 
are doing all that we can to identify those committing fraud 
and crimes and referring them to the Department of Justice for 
prosecution. We are doing all that we can to hold them 
accountable for civil liability, not just in terms of employee 
misconduct but people who do business with the GSA. Oracle paid 
$199 million back recently because of the work of our auditors.
    And so we are doing our best to hold people accountable. I 
know Mr. Tangherlini has some ideas about changes. You have 
heard my general recommendation that we need to have a strong 
system where people are held accountable. Regional people need 
to be held accountable, and people need to manage. You can't 
legislate good management and good judgment. But you can try 
and put into place some systems where people do manage. And I 
will let Mr. Tangherlini speak more about that.
    Senator Johanns. Go ahead; offer your thoughts.
    Mr. Tangherlini. Thank you very much, Senator.
    I think the Inspector General described it very well. I 
think we need to look at the way we have structured the 
organization, look at their reporting lines of authority and 
ask ourselves, is this a structure that will ensure clear 
accountability. Again, autonomy allows for the opportunity for 
a certain amount of innovation. The point, though, is that that 
innovation has to happen within the constraints of 
accountability so we know what is taking place, we have a 
shared view of what is taking place, that there are appropriate 
checks and balances so that nothing like this can happen again.
    Senator Johanns. Let me ask both of you--Mr. Miller, 
something you said triggered this thought. Is this, based upon 
what you have seen so far, is this a regional issue? Or is this 
a system-wide GSA issue that you are facing? Or is this just 
simply a situation where the regional leadership was so lax, so 
whatever, that this just spun totally out of control? What are 
your thoughts on that?
    Mr. Miller. I am a former prosecutor. I tend to see 
misconduct in a lot of places. I would say yes to all of the 
above. Obviously there is misconduct on the part of regional 
officials. But there was a national central office official, 
the commissioner of PBS, that threw a party in his loft suite 
and charged the taxpayers over $1,900 for food. That is a 
central office, high ranking, senior official. So I think that 
there is a problem throughout.
    But as an IG we do reports based on specifics. We have done 
a report specifically on the Western Regions Conference. We are 
reluctant to make generalizations, but I do throw those 
particular facts out to you about the party, and you can draw 
your own general conclusions.
    Senator Johanns. OK.
    Mr. Tangherlini. I think the events in the Western Regions 
Conference speak for themselves, that there was clearly a 
leadership issue happening, particularly out there in Region 9 
at the time that this conference was planned and certainly 
undertaken. I haven't been there long enough to really get a 
sense organizationally whether this is a broader cultural 
problem or not.
    And that is why we want to look top to bottom at the 
organization and ask ourselves the clean sheet of paper type 
questions: are we structured in such a way, have we built 
ourselves a culture in such a way that it encourages this kind 
of activity. Although I don't think there is any evidence that 
there is, beyond what we have seen in Region 9 and what 
happened with this particular leader, that this is endemic. But 
we are open to that possibility, and we will work very closely 
with the IG.
    I think equally important, frankly, is making sure we build 
a system with appropriate accountability, appropriate checks 
and balances, appropriate visibility into the actions that 
people will have opportunities to stop this kind of thing 
before it happens.
    Senator Johanns. I don't want to abuse my privilege here by 
extending this, because I am out of time. But I do want to just 
offer a thought. It would seem to me that an auditing process 
of some kind either wasn't working, if it was in place, or in 
the alternative, if it is not in place, it needs to be. You 
would think just a regular auditing process would have picked 
out these issues and said, whoa, wait a second, time out here. 
You are heading off in a wrong direction. For whatever reason, 
that didn't seem to happen here, which I find very, very 
surprising.
    So maybe a fix going forward is to fix whatever is there 
that wasn't working, or in the alternative put in place an 
auditing process to catch these things. Thanks.
    Senator Inhofe. Mr. Tangherlini, kind of putting this in 
perspective, the event took place in October 2010. This interim 
report came in May 2011, I understand. So then you had another 
11 months. If you had been in the position of Ms. Johnson at 
that time, the position that you are acting in now, what would 
you have done when the interim report came out? How would you 
have handled that?
    Mr. Tangherlini. It is very hard to conceive of the 
response to such a hypothetical. However, it is also easy to 
use 20/20 hindsight. I think going forward the best thing to do 
is build the kind of relationship that I tried to start on day 
one with our Inspector General. My first day into the office I 
came in and I met with Brian and his team. We subsequently had 
a one on one in which I sat with his entire leadership team and 
worked with them to try to understand what are the big 
challenges.
    I would like to build the kind of relationship where we 
have continued and direct communication, and as a result of 
that communication, we have swift and immediate action on the 
part of the Administration.
    Senator Inhofe. It was my understanding, maybe you can 
clarify this, Mr. Miller, it was after that interim, that May 
2011, that Mr. Neely actually went on several trips, after that 
report came out. I am talking about two trips to Hawaii, a trip 
to Saipan, a trip to Guam, a trip to Napa Valley, and several 
other places. Is that correct?
    Mr. Miller. That is correct, unfortunately, Senator.
    Senator Inhofe. All right.
    Mr. Tangherlini, there are a total of 11 regions, if you 
count Washington. And this was 8, 9, 10 and 11. Are you aware 
of, in the other areas, any other ongoing investigations that 
you would feel comfortable talking about? Do you know of any 
others that are taking place, of other regions other than this? 
Is this an isolated case for right now?
    Mr. Tangherlini. Let me just, if you don't mind, reiterate 
that it is 7, 8, 9, 10, Region 11 is actually the National 
Capital Region, Washington, DC.
    Senator Inhofe. I see. That is fine.
    Mr. Tangherlini. But as far as ongoing investigations, I 
think it is actually better if the Inspector General speaks to 
that.
    Senator Inhofe. OK; that is fine.
    Mr. Miller. Senator, yes, there are ongoing investigations, 
some involving other regions.
    Senator Inhofe. And were they stimulated because of this 
problem coming up, or where they already under investigation?
    Mr. Miller. Some were stimulated because of this. I would 
have to check on exactly how many.
    As I said in my opening statement, the result of the 
release of this report is that people are coming forward now, 
they are calling the hotline. And as a result of Administrator 
Tangherlini and my joint appearance before GSA, encouraging 
people to come forward to my office, people are coming forward 
and reporting things.
    Senator Inhofe. I understand you had a letter that went to 
you, Mr. Tangherlini, that went to the Neely, Shepard, and I 
guess Peck was the other one, requesting return of funds that 
should not have been spent. Is that correct? And are they 
complying with that?
    Mr. Tangherlini. It was our acting Public Buildings 
Commissioner, Linda Chero, who sent a letter to those three 
individuals demanding return of funds associated with those 
events. We have also begun the process using the Inspector 
General's report to go down the list of other places where we 
believe the Federal Government and the Federal taxpayers 
inappropriately paid for ineligible items.
    Senator Inhofe. Let me just conclude by kind of backing up 
the Chairman in this case, because we have had so many 
experiences where oversight has just been neglected. I think we 
were perhaps in neglect for not doing more. So I think we will 
kind of serve notice, there are going to be a lot more 
oversight hearings, not just with GSA, but with other areas in 
this huge jurisdiction of this Committee.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you very much.
    Senator Barrasso.
    Senator Barrasso. Thank you, Madam Chairman.
    The issue continues to arise, should there be a 
termination, additional people suspended. In response to the 
Inspector General's report the Administrator resigned. We 
talked about officials who have been fired. And we get into 
Senior Executive Service employees who can only be removed from 
the civil service or suspended for more than 14 days ``only for 
misconduct, neglect of duty, malfeasance, or failure to accept 
a directed reassignment or to accompany a position in the 
transfer of function.''
    As the new Administrator, looking at this, you mentioned 
taking strong action. Have these procedures to remove an SES 
employee be set in motion to terminate Jeff Neely?
    Mr. Tangherlini. I think I want to try and avoid anything I 
would say that could impact the ability for us to see through 
the administrative actions against those accountable all the 
way to completion. Because the personnel rules are rather 
strong, the Privacy Act also is implicated in discussing these 
items. I want you to know, though, I would like the Committee 
to know, that we do have a team of folks from our Human Capital 
Office, our Deputy Human Capital person, and from our legal 
office, pursuing the full measure against all those responsible 
for planning this event and undertaking this event and leading 
this event.
    Senator Barrasso. Thank you. It is interesting, when you 
look at some of the policies we have with regard to credit card 
and contracting warrant policies, and learn that a number of 
GSA employees actually had their Government credit card 
privileges temporarily terminated, related specifically to this 
conference, way back in 2009, and then just 2 weeks later, the 
privileges were reinstated. So you scratch your head and say, 
what exactly has happened here, and is that something you are 
going to look into as well?
    Mr. Tangherlini. Actually, I took action over this weekend 
to vest the authority in our senior procurement executive for 
removal and reinstatement. In the past, that was another 
delegated authority, out to the regional areas, where people 
could provide that warrant authority, they could remove the 
warrant authority, they could re-provide the warrant authority. 
All of that needs to go through our senior procurement 
executive now, and all of it needs to be justified.
    Senator Barrasso. Good.
    I would ask you, Mr. Miller, looking at this as a 
prosecutor, as you said you do, are there things that we should 
expect in the new few weeks or months that we are going to 
learn more additional things, or is this pretty well complete? 
Are you continuing an ongoing investigation?
    Mr. Miller. Senator, we are continuing ongoing 
investigations. As I said in my opening statement, every time 
we turn over a proverbial stone we find 50 more, and we find 
things crawling out from under them. I don't know what we are 
going to find, but it has not been pretty.
    Senator Barrasso. Just having gone through a number of the 
documents and the depositions, the invoices, looking through 
this, it does look like you question how certain vendors were 
chosen, when it would have been a lot easier to choose others, 
there are potential allegations of illegal relationships 
between vendors and those doing the procuring. Is that the sort 
of thing that you are referring to?
    Mr. Miller. We are looking at all those things, yes, 
Senator.
    Senator Barrasso. There was a mention made of fining some 
individuals, making them reimburse for money already spent. It 
is interesting how you look through some of these hotel bills, 
and even though someone may have stayed a little longer and 
paid the $93 bill, as Mr. Neely did, the cost of the room that 
night, and it was kind of a high roller suite, it would have 
been over $1,000, he said, well, just add that additional money 
to the overall invoice for the overall convention, that has 
come out in deposition.
    Mr. Miller. The taxpayers paid for that.
    Senator Barrasso. Yes, because that is an extra $1,050 for 
additional time. You look at all of this, and it makes you 
wonder, because Chairman Boxer mentioned, under both 
Republicans and Democrats there has been abuse throughout the 
GSA over a number of decades. Would it not be fair to ask, has 
GSA outlived its usefulness as a Federal agency? Is this 
something that should be done in the private sector, rather 
than the Government sector, since there are so many challenges 
here for the GSA?
    Mr. Tangherlini. I think, if you want these activities to 
happen, if you want fleet management, building management, in 
fact, most of the work we do is actually provided through the 
private sector. What we simply do is act as an intermediary. 
What we need to do is create the appropriate sets of checks and 
balances, the appropriate sets of oversight systems, the clear 
lines of accountability that can make sure that this kind of 
thing can't happen again.
    That having been said, having a single accountable agency 
that can aggregate the expenses of the Government and use the 
scale of the Government to get the best possible price for the 
Government, I think that has value today as much as it did back 
when the Hoover Commission first proposed it and President 
Truman set up the GSA.
    Senator Barrasso. Because if you go back to the definition, 
the goal to provide superior value to the American taxpayer, we 
have fallen so far away from that that the taxpayers of this 
country are just appalled.
    Thank you.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you.
    Senator Boozman.
    Senator Boozman. Thank you, Madam Chair.
    Mr. Miller, what were some of the red flags that were 
overlooked in regard to this? This stuff is pretty blatant. 
What was there that people didn't pick up that they should have 
picked up?
    Mr. Miller. Almost everything, Senator. When you have a 
select number of individuals invited to a party where food is 
paid for by the taxpayer, somebody somewhere should have--some 
red flag should have popped up and said, oops, this isn't 
right. That didn't happen. And we had some of our highest 
ranking officials attend these networking parties and private 
receptions in these rooms.
    Senator Boozman. So was that budgeted, or are there 
receipts?
    Mr. Miller. Yes.
    Senator Boozman. Were those things falsified?
    Mr. Miller. We went through all the receipts. It was billed 
to the Federal Government. It took a long time to find, because 
some of the bills are on purchase cards, credit cards. Some of 
the bills are in the budget for the conference. Some of the 
bills came out of the operating fund for the public buildings. 
They were all over the place.
    So I commend our forensic auditors and special agents and 
auditors for finding these.
    Senator Boozman. So within the agency, who is responsible 
for saying, there is something amiss here?
    Mr. Miller. Dan, do you want to take that?
    Mr. Tangherlini. I think actually that is part of the 
problem. I think that was part of our concern, was that we 
didn't have a strong, centralized financial management 
organization that could see these things beginning to start 
coming through the system and start raising questions. It was 
all held within the region, and that region was being led by 
this individual who is the main leader of this activity. So 
that we identify very quickly as an issue, coming out of the 
Inspector General's report. We have taken immediate action to 
begin to change that structure. But we think that that is just 
the beginning and why we need to take a good look, top to 
bottom, the way we structure and organize and operate this 
agency.
    Mr. Miller. And Senator, somebody was approving the travel 
vouchers for those people traveling to this conference. So 
there is responsibility all throughout GSA.
    Senator Boozman. As you have unturned these stones, are you 
finding--is this more an individual thing, or is this the 
culture of GSA?
    Mr. Miller. We are finding a lot of things.
    Senator Boozman. But is it more a cultural thing, or this 
has been going on so long that it is business as usual?
    Mr. Miller. As an inspector general, I am reluctant to make 
generalizations without having facts to support them. I will 
say that when we uncover things, we disclose them; I gave the 
Administrator an interim report because we had investigations. 
And it got so bad that we thought, we have to tell the 
Administrator so that they can stop this abuse. Normally we 
don't do that when we are investigating.
    But we put together this interim report. And I briefed the 
Administrator in May 2011 about the abuse. We also had another 
problem with the employee rewards store, the Hats Off store; we 
gave her a draft of that, too. So we gave the managers 
information so that they could stop this.
    I don't know what actions were taken. I will let the 
Administrator talk about that. But we were trying to get people 
to stop this. And then in August, there was a new regional 
administrator sworn in in Region 9. I personally met with her, 
went through the interim report with her and asked her to get a 
handle on the regional commissioners' travel. I even suggested 
perhaps she could have her CFO take a look at past trips.
    And then we are faced with a 3-week trip of the regional 
commissioner to Saipan. We went to the Deputy Administrator, 
Susan Brita, and said, what is going on? Do you know that he is 
about to take another trip? She contacted the regional 
Administrator and the result was, he went on the trip.
    Senator Boozman. So that is kind of cultural.
    Mr. Miller. I will let you draw the generalization.
    Senator Boozman. Exactly. The GSA evidently is a very 
troubled agency. Do you know perhaps some of the better 
agencies--our leadership who has been here a while mentioned 
that have these recurrent things going on at GSA. What are some 
of the agencies, what can we use as model within Government to 
try and model this after so that we don't have this in the 
future? Some of the agencies that seem to function without 
these problems, is there one that comes to your mind?
    Mr. Tangherlini. I would say, I just want to, if you don't 
mind, add quickly to the IGs, Mr. Miller's comments about 
culture and say that at the same time, I have received dozens 
and dozens of e-mails from GSA employees who are as outraged 
and horrified and disappointed and disgusted, and frankly, even 
some level more, because they have associated their public 
service careers with this organization. And they are now 
embarrassed about being GSA employees.
    They are committed, the e-mails I get from people, they are 
committed to redoubling their efforts to do what the GSA is set 
up to do, which is save taxpayers money, which makes these 
events even more unconscionable.
    Now, what are the good agencies out there? I really think 
that the Administration has done a very good job of moving 
forward on a number of systems, accountability systems, 
performance accountability systems, that we really need to look 
at other agencies, how they set things up so that they have a 
continual quarterly accountability review of the actual 
performance and expenditures of their component parts. I think 
there are a lot of lessons we can learn from that.
    Senator Boozman. Thank you.
    Thank you, Madam Chair.
    Senator Boxer. Thank you, Senator.
    I just want to thank all my colleagues, because I think 
every one of these questions is important.
    So it is really good to see both of you working together. I 
can't tell you how much it means to us. Because without that, 
we are not going to get anything done. I think the last 
Administrator should have listened to you a lot more when she 
saw the draft report.
    Mr. Miller. Thank you.
    Senator Boxer. I think that was a huge mistake. And if it 
wasn't for Ms. Brita, we might not even be here.
    So I think what is really important is for the public to 
understand, as you said, Mr. Miller, in your opening, what went 
wrong and what went right. But now, we have no excuses going 
forward not to fix this nightmare. And I have to say, it starts 
with the two of you working together. It really does.
    Now, that doesn't mean you are going to agree on every 
single thing, no two people agree on every single thing. But 
the motivation of cleaning house is key. And putting in those 
checks and balances so that, look, we can never stop every bad 
thing from happening, but we know we can stop most. It starts 
with accountability for those who committed these, I would say, 
possible criminal acts. I believe it is very possible. I know 
you are looking at more.
    So I think this is so damaging that Mr. Tangherlini, I want 
you to be more sweeping in your reforms, perhaps, than people 
will be comfortable with. You have to. You have no other 
option. You can do something here that will last for 
generations if you do it right.
    I think Senator Boozman's question was good, is there 
another agency. Well, there is really not another agency that 
has quite the same function. This is a different type of a 
function. Most of our agencies really deal with performing a 
particular service. You have to deal with so many outside, 
inside people, it is different. But we have to protect against 
bad people, because there are always going to be bad people.
    So the last Administrator before this one, the 
Administrator under George Bush, compared you, Mr. Miller, your 
tactics, to terrorism. I assume that was not a good working 
relationship. Right. So she is gone, now the next one is gone, 
and now we have this camaraderie based on not personalities or 
power, but doing the right thing.
    So I would like to offer a couple of thoughts and have you 
respond. I think all of us who have led organizations, be they 
small or large, know that the tone set at the top is critical. 
There is a very kind of a coarse expression, which I will say 
at my own risk, which is the fish sinks from the head. It makes 
sense. If the person at the top is not good, it filters down, 
the ugliness. And we have a good person at the top, we have a 
great Inspector General who has proven himself through various 
and sundry Administrations.
    So are you considering, Mr. Tangherlini, or have you done 
this, personal town halls with the GSA employees? Now, it is my 
understanding that the good people there, and you point to 
them, are being forgotten. That is the saddest, saddest, 
saddest thing. Because my understanding, and you can confirm 
this if I am not correct, is that these current GSA employees 
following Obama's directives have saved more than a billion 
dollars for taxpayers. Am I right on that?
    Mr. Tangherlini. They have helped us save a million dollars 
by following----
    Senator Boxer. No, I don't mean this. I mean by putting in 
energy efficiencies, and putting in better computing and better 
printing.
    Mr. Tangherlini. Absolutely. The value proposition goes 
well beyond that when you start looking at what we do in terms 
of competing travel, what we do in our procurement areas, in 
terms of strategic sourcing. It is really a great story.
    Senator Boxer. So let's be clear here for the taxpayers to 
know, because of the President's directive to become efficient 
and save money, we have saved, is it fair to say, more than a 
billion dollars for taxpayers?
    Mr. Tangherlini. I think it is fair to say.
    Senator Boxer. OK. So let's not lose that. Because that 
gets lost.
    How many people sitting here today work for GSA? Could you 
raise your hand? I know what a painful thing this is. Every 
time there is a scandal in the Senate, it hurts everybody, and 
we have them. It is ugly. And I know what you are going 
through. But I think what we can't lose sight of is the good 
people there. And in order to make sure that they are 
supported, so are you considering having these types of 
meetings, whether it is large ones out in the region? What are 
your plans to exert that type of leadership?
    Mr. Tangherlini. Well, already, on my second and third day 
at GSA, I went through the Public Buildings Service, the local 
Public Buildings Service, I went out to our region 11 office 
here in Washington, I went to our FAS, and I went floor to 
floor and addressed GSA employees. I have already been on what 
we call Chatter, which is our internal social networking 
dialogue opportunity to take questions from GSA employees. In 
my letter to GSA employees on my first day I asked them to 
reach out to me. They have not been shy. They have been 
reaching out to me.
    And in our joint letter we asked employees to reach out to 
both of us if they have an issue.
    Senator Boxer. I think what is important, and this is my 
opinion, is for you and your trusted people at the top to meet 
with groups of people, large groups of people, and just let 
them know that we are going to deal with this matter, we are 
going to straighten this out, we are going to be known as the 
GSA team that cleaned up a mess that has happened over four 
decades that keeps on happening, and we are going to clean it 
up.
    It also seems to me, you talk about innovation. Innovation 
needs to be coming from the grass roots up. But if it has a 
cost to it, it needs to go to the central place here. Because 
that is what you need. You need cost controls right now, on 
everything. I think you should overdo it. There is always a way 
that you can later on say, maybe we have overdone it.
    But in my opinion, for example, these guys did pre-
convention trips to try out the resort with their friends. That 
is disgusting. And it has to stop. So any travel budget, it 
seems to me, needs to be looked at by your trusted people, 
every travel budget. And all the expenses, all of that has to 
be instituted, I think, to regain control over these runaway 
regions. I say regions plural, I may be wrong, I don't mean to 
impugn anybody else.
    But your leadership in terms of reaching out to the good 
people is just as important as your leadership in punishing the 
bad people. It is a big job. And you have trusted people.
    So I want to help you. I know Senator Inhofe does, I know 
members of the Committee want to help. Because it will rebound 
to our benefit, if we can help you straighten this out. We are 
the biggest landlord, we have a lot of property. We can really 
make it work for the taxpayers if we do it right. If we do it 
wrong, it is not going to be good.
    So you have my full support here. Come September, we will 
take another look-see on how everything is going.
    I am going to turn it over now to Senator Barrasso.
    Oh, Senator Carper, I am so sorry. You were gone and now 
you are back.
    Senator Carper. I am happy to yield.
    Senator Boxer. No, go ahead, because he will take his 
final.
    Senator Carper. Thank you for joining us today. Let me just 
say, I spent a lot of years in the Navy. We were trained from 
an early age that leadership by example is one of the best 
forms of leadership. People may not believe what we say, they 
will believe what we do. We are entrusted with positions, none 
of us is perfect; we all make mistakes.
    I think it was Richard Nixon who used to say that people 
who don't make mistakes are people who don't do anything. My 
father used to say, just use some common sense. I think what 
happened here is common sense was not used, and leadership by 
example certainly was not pursued. It is a reminder for all of 
us that the positions that we are entrusted with, that we need 
to use some common sense, and we need to remember that there 
are people looking at us and watching us. That brings with us a 
special responsibility.
    I have a couple of questions I want to ask. Mr. Miller, it 
appears that, the irony of it is that we are focused here on 
the expenditure of less than a million dollars, and there is 
the issue, a much larger issue pointed out every year by GSA 
that involves surplus property, that we have great potential 
savings with respect to surplus, thousands of pieces of 
property that are owned by the Federal Government that in some 
cases we don't need. We spend a lot of money for utilities and 
security and so forth.
    The Administration is focused on this, your agency has been 
part of this, and we need to be part of the solution. I think 
we will be moving legislation later this year, not just focused 
on the expenditure of $800,000, which is not insignificant, but 
also to focus on the expenditure, wiser expenditure of billions 
and billions of dollars, which is part of your 
responsibilities.
    Mr. Miller. Indeed.
    Senator Carper. Mr. Miller, it appears the system that is 
designed to uncover such wrongdoing actually worked as it is 
intended. According to your report, you were informed of 
excessive spending and potential employee misconduct in 
conjunction with the conference I think by a GSA Deputy 
Administrator, is that right?
    Mr. Miller. That is correct. Susan Brita, who is sitting 
behind me.
    Senator Carper. Would you raise your hand, Susan? OK, thank 
you.
    And that prompted you to launch your investigation?
    Mr. Miller. Yes, sir.
    Senator Carper. And once you revealed the findings of your 
investigation to GSA leadership, how quickly did they respond?
    Mr. Miller. Well, I think former Administrator Martha 
Johnson is the one to answer that question. I went through the 
interim report in May 2011 with Administrator Johnson and her 
senior staff. I also in August 2011----
    Senator Carper. Could you just back up? Will you start the 
time line for me?
    Mr. Miller. The time line is the Deputy Administrator 
contacted our office around December 2010. The actual 
conference was October 2010. So somewhere around December 2010, 
the Deputy Administrator came to our office. We began the 
investigation immediately.
    And in May 2011 we were finding such outrageous conduct 
that we took the unusual step of preparing an interim report. 
We don't usually do that with investigations. But we prepared 
an interim Power Point to share with the Administrator. We gave 
that to her and her staff.
    Senator Carper. That was May 2011?
    Mr. Miller. May 3rd, 2011. And then on May 17th, 2011, I 
met with her personally, went through the Power Point.
    Senator Carper. What was her reaction?
    Mr. Miller. She appeared to be disgusted by the Power 
Point. But we went through it. I also went through another 
draft report that we had on what is called the Hats Off 
program; it is an employee reward program. And I won't bore you 
with the details, but it was a draft, I went through that with 
her as well. In June 2011 the Hats Off report became final. And 
that indicated wrongdoing on the part of various GSA employees, 
especially the regional commissioner.
    Then in August 2011 I personally met with the newly 
appointed regional administrator for Region 9.
    Senator Carper. And the administrator had been removed, 
stepped down?
    Mr. Miller. There was a vacant regional administrator for 
Region 9, and that was vacant for a long time. The regional 
commissioner, Jeff Neely, was acting regional administrator at 
the same time, which may be part of the problem. But 
Administrator Johnson made it a point to find someone, and 
appointed someone to take charge as regional administrator. And 
so I personally briefed regional administrator in August 2011 
and suggested that she get a handle, get control of the 
regional commissioner's travel, and that perhaps she could 
employ her financial officer to help do some historical work as 
well to let her know what the true story was.
    So that is the time line. We came out with a final report, 
and I delivered it to Administrator Johnson on February 17th. 
The way our system works is, we will do essentially what is a 
final report. We give it to the agency to make comments, so 
they tell us whether we got the facts wrong, or there is 
something wrong, or they say, no, it is exactly right. Either 
way, we publish their response, and the whole thing is 
published.
    So I gave her what is technically called the draft final 
report February 17th. And I gave her 30 days to prepare a 
response that we would publish with the report. She asked for 
an additional 30 days. But it was clear all along that we would 
publish whenever we received her response. And ultimately, we 
received her response on April 2nd, and that is when we 
published the final report.
    Senator Carper. All right, good. Thank you.
    Are you satisfied with the corrective measures that have 
been taken? Just be very brief. Are you satisfied with the 
corrective measures that have been taken?
    Mr. Miller. I think more needs to be done, Senator.
    Senator Carper. Give us some idea what that might be.
    Mr. Miller. There are a lot of challenges, perhaps the 
Acting Administrator wants to address those.
    Mr. Tangherlini. I agree with the Inspector General; more 
needs to be done.
    Senator Carper. Can you give us some idea what that might 
be?
    Mr. Tangherlini. We mentioned some around the stronger 
oversight and accountability of the regions, better and 
stronger financial management systems that reach into the 
regions so we have clear visibility what is taking place there.
    Senator Carper. The issue, Madam Chair, did you all get 
into the question, and I will just ask you really, did the fact 
that there was not a regional administrator for apparently a 
significant period of time, is that symptomatic? Are there 
other regions, are we having extended periods of time where you 
don't have somebody literally there in charge in the regions? 
And what should we be doing about that? What should the 
Administration be doing about that?
    Mr. Tangherlini. Some of that has to do with the changeover 
between Administrations this year, trying to appoint these 
positions. But also some of it had to do with the fact that the 
accountability of the regional commissioners had been 
transferred away from those regional administrators and sent 
directly to the commissioner of the Public Buildings Service. 
We learned yesterday in one of the hearings that there is 
almost some confusion about the organizational structure of 
GSA. And we need to make that very clear and very obvious so we 
can have the kind of accountability we need.
    Senator Carper. All right.
    Thank you, Madam Chair.
    Senator Boxer. I think that was an important question, so 
thank you for pursuing it.
    Senator Barrasso, then Senator Udall.
    Senator Barrasso. Just to follow up on Senator Carper's 
point about bringing back the accountability, the question to 
the Inspector General is, do you have the resources that you 
need? You said there is more that needs to be found. Do you 
have all the resources that you need to bring back the 
accountability that taxpayers demand and deserve?
    Mr. Miller. We are always doing the best with what we have. 
We have 70 special agents, special agents do the interviewing, 
they have law enforcement authority. We have a number of 
auditors, we have a total of about 300. We have a number of 
vacancies. And of course because of appropriations, we are not 
filling many of those vacancies.
    But as everyone in the Federal service is doing, we are 
doing as much as we can.
    Senator Barrasso. Thank you, Madam Chairman.
    Senator Boxer. Thank you so much.
    Senator Udall.
    Senator Udall. Thank you, Madam Chair, it is good to be 
with you today, and I really appreciate you doing this hearing. 
It is tremendously important to focus on the issues that the 
GSA does focus on, and I am going to talk a little bit about 
New Mexico here.
    At the House hearings and our hearing today, many listed 
the outrages in this wasteful, over the top conference. I am 
not going to spend a lot of time on that, but a mind reader, 
sushi, luxury suites, when you are wasting taxpayer money, what 
happens in Vegas does not stay in Vegas.
    So let's take a little bit more of a look here at this 
conference in terms of the big picture. My first question is 
going to focus on all these things you have done in the past. 
But first, to hit on New Mexico. From a New Mexico perspective, 
this conference scandal is also especially worrisome for two 
reasons. First, I am disappointed that this conference involved 
the western regions of GSA, of which New Mexico is a part, 
which is within the southwestern region, Region 7.
    And second, more importantly, this scandal is distracting 
from the urgent GSA pending project in New Mexico, the Columbus 
Land Port of Entry. Columbus, New Mexico, is a border town 
across from Palomas, Mexico. GSA included a $60 million new 
land port of entry facility in its 2012 budget. In December 
this Committee approved a resolution authorizing construction. 
This facility is extremely important to security, U.S.-Mexico 
trade and economic development in southwest New Mexico. I was 
in Columbus last week and heard about the importance of this 
project. We need to root out the waste and abuse at GSA and get 
back to the work that taxpayers want us to do, like economic 
development and border security.
    So Mr. Miller, you have talked a lot about the report your 
office did regarding this wasteful conference in 2010. I would 
like to hear some more about your other works on wasteful 
spending, so that we can put this current controversy into 
context and into perspective. Here are a number of figures from 
your most recent semi-annual report. I hope you can tell us 
really what they mean. First of all, $460 million in questioned 
funds are recommended for better use; $370 million in criminal, 
civil, and administrative recoveries; 260 new investigations; 
71 cases accepted for prosecution; 85 indictments and 64 
successful prosecutions; 88 contractors suspended and 61 
contractors disbarred.
    Now, there are similar figures in all the semi-annual 
reports going back to President Bush. Could you put this in 
perspective? We have this conference that is obviously a real 
waste of taxpayers' funds. But some of the other things you are 
doing here I think are very important, and the dollar amounts 
are huge. Could you put that in perspective?
    Mr. Miller. Thank you, Senator, for noticing. Our office 
does a lot of great work. We have great auditors, great special 
auditors, forensic auditors, and lawyers. They do a tremendous 
amount of work. I will just start backward.
    I made it a priority when I became Inspector General in 
2005 to make referrals for suspension and debarment. We have 
referred over 1,000 individuals and companies for suspension 
and debarment so far. We have indicted a number of individuals 
and companies. This year alone we indicted a group of 
individuals who were producing counterfeit integrated circuits, 
claiming that they were Cisco integrated circuits, and then 
upgraded integrated circuits. They broke the code that Cisco 
had to upgrade them, and they would upgrade sometimes real 
Cisco integrated circuits with counterfeit parts and sell them 
at a profit to the Government and to others. We convicted those 
individuals; they were convicted in the Eastern District of 
Virginia by the U.S. Attorney's office there.
    We also investigated--which led to the conviction of 11 
individuals involved--property managers managing properties in 
the DC area, including a manager of White House facilities. 
They were taking bribes. For example, they would have an 
arrangement with a contractor to replace an exhaust fan. And 
they would use their purchase card to charge $2,000 or $1,000 
for replacement of a fan. In reality, the fan cost $80. So the 
contractor then would kick back a part of that money to the 
property manager.
    So 11 property managers and contractors were convicted 
earlier in this year, I guess 2011.
    Senator Udall. Mr. Miller, in terms of perspective, is the 
waste, fraud, and abuse at GSA improving, or is it getting 
worse overall? You've had a real perspective here looking at 
this big picture issue.
    Mr. Miller. We continue to look at the larger systems, too. 
Because we do audits of programs of GSA. And GSA, we do audit 
programs regularly at GSA. Having conferences is not a program 
of GSA, so it is not one of the regular things we audit. We 
will start now. But we audit their systems, and we look at 
their work yearly. And we find more and more fraud, waste, and 
abuse.
    I don't know that we have sat back and compared how much 
fraud there is year by year. Fraud by its very nature is 
hidden. I am happy that, thanks to the hard work of our special 
agents, auditors, forensic auditors, and lawyers, we are 
uncovering more and more fraud.
    Senator Udall. The last GSA Administrators have had to 
resign. Is there something about GSA, could you tell us why we 
are seeing that many scandals at GSA? What can you enlighten us 
on there?
    Mr. Miller. GSA handles a lot of money. Millions, maybe 
billions of dollars, flow through GSA. It handles a lot of 
money, handles a lot of property. There are a lot of contracts 
that it controls. There is a lot of temptation. And with over 
12,000 employees you are going to find criminal conduct, stupid 
conduct, and just plain negligence. So it is a large operation 
with a lot of employees, so you do have criminal activity.
    Senator Udall. Madam Chair, I see I am out of time. I just 
have one more question, if I could have your indulgence here. I 
would like to ask the Acting Administrator, is this scandal 
going to distract GSA from doing its job, such as constructing 
essential Federal facilities like the Columbus, New Mexico, 
border crossing land point of entry?
    Mr. Tangherlini. We hope it won't. Because that would add a 
very bad outcome to an already unacceptable situation. We need 
to make sure the GSA, the nearly 13,000 GSA employees stay 
focused on their core mission and save taxpayers money. If we 
are diverted from that, then we are only compounding the 
mistakes that were made at this conference.
    Senator Udall. Thank you.
    Madam Chair, I know that you are a real watchdog over the 
Treasury, and I appreciate your holding this hearing and making 
sure that we don't see these kinds of wasteful expenditures of 
taxpayer money.
    Senator Boxer. Thank you, Senator, for joining us. I think 
we have had a good, a very important hearing. We are not 
looking for photo ops of people taking the fifth. We are trying 
to now move forward and make sure this doesn't happen again.
    Now, the Inspector General, in answer to Senator Udall's 
question. He is uncovering more and more fraud. It just seems 
like it is a never ending thing.
    So Mr. Tangherlini, you are sitting next to a man who is 
saying he is uncovering more and more fraud. So again, I am 
trying to encourage you to do far more than even you thought 
you had to do. You need to, because we are not going to change 
this.
    So I am encouraging you here, I am supporting you in that 
effort. As I think of ways, if I was in your seat, again, I 
would communicate with every single employee. Have you done any 
type of an e-mail or any type of a letter or any type of a 
little chat? You said you chatted.
    Mr. Tangherlini. Yes.
    Senator Boxer. Have you made a statement that all GSA 
employees from the top to the bottom can hear you talk about 
(A), how much you respect the work they do and (B), how we have 
zero tolerance for fraud in any way?
    Mr. Tangherlini. We need to continue to do that. But on my 
first day I sent a letter to all GSA employees, I followed it 
up later in the week with a joint letter with the Inspector 
General. I have also done a video for all General Services 
employees.
    Senator Boxer. Good.
    Mr. Tangherlini. We started the social media, the chatter 
conversations. There is going to be more of that. I like your 
idea of maybe using something like telepresence to get out to 
the regions.
    Senator Boxer. Very important.
    Mr. Tangherlini. And to talk to folks.
    Senator Boxer. Because you know what is going on right now 
around the water cooler. Not a lot of work.
    Mr. Tangherlini. Right.
    Senator Boxer. And I think people have to know we have a 
job to do; it is our job to prove to America that this agency 
is filled with patriotic, loyal Americans who want to do the 
right thing. And that is critical.
    What is so outrageous about this is how these bad actors, 
very bad actors, perhaps criminal actors, have sullied the 
reputation of so many people. It really is so disturbing. And 
they tried to also sully the reputation of our President, these 
people, in some of the things that they did. So I think a 
reach-out here is critical.
    I also think--you have 11 offices, right? Ten plus DC, 
right?
    Mr. Tangherlini. Yes.
    Senator Boxer. So I would, if I were you, I would find 11 
of the best people I could find, seriously, the top notch 
people, whether they are in the agency, and you have good 
people there, or find these people. I would at this point send 
them out to each of these offices, and I think they ought to be 
special oversight officers, there to make sure people get back 
to work, do their job, and before all these papers go off to 
the central place, which I think is important, that there is 
somebody there who can liaison with you, so you don't have a 
situation where you have the same people sending you the papers 
and you don't have that much confidence.
    I think that ought to be something you consider. Now, it 
may not be necessary to do it in every one of these offices. 
But I will tell you right now, from what I heard about the one 
in my State, it ought to be done.
    Mr. Tangherlini. Right. Already in regions 7, 8, 9, and 10, 
in the Public Buildings Commission we are sending out new 
acting public buildings commissioners. But I also took away 
from here that we need to very quickly focus on the role of the 
regional administrator and the clear accountability that those 
folks need to show over those regions.
    Senator Boxer. Yes. And sending someone out there to 
oversee it, whether that is a 6-month assignment, plucked from 
the best of your best, it is up to you. When I hear the 
Inspector General, whom I admire so much, who had to take so 
much verbal abuse in the past, and who stuck with it, when I 
hear him say he is looking, he is turning over rocks, and every 
time he turns over a rock, something crawls out, that does not 
give me heart. I do not feel good.
    I am so happy that you are both there. But I am worried 
about what is to come. You are there now, and you have nothing 
to do with it. But from this point forward, you do. So don't 
underestimate this job that you have in terms of shaking this 
tree, and let these bad apples fall. Have your best people in 
these regions.
    We become Washington-centric sometimes in Federal 
Government. We really do. And one of the things I learned, 
being in my job for a long time, thanks to the good people of 
my State, is that in the beginning, there was always tension 
between my regional offices at home and my main office. My main 
office thought they were the best, the best, and everybody was 
doing things out there wasn't so important. Baloney. The people 
on the ground are the ones who are meeting my constituents, are 
the ones who are bringing the issues to me, are the ones with 
the face of my office.
    So we had a lot of heartfelt meetings. And now we are a 
seamless team. But it takes a lot of time. But I think that 
these regions have gone wild. This region went wild on you. 
They went rogue. It can't happen, and there are still ugly 
things that are going to come out, let's face it. Because we 
know that Mr. Miller isn't going to stop until he knows every 
single thing.
    So will you consider this idea of, I am not just talking 
about a person of public buildings, I am talking about an 
overall good person to get in there and say to the region, we 
need to change, and this is how it has to be, this is what our 
leader in Washington said we are going to do, and we are going 
to do this for him, we are going to do this for the country. So 
would you consider that type of approach?
    Mr. Tangherlini. Absolutely, Senator.
    Senator Boxer. Excellent. I think it would really help. 
Because the big word here is accountability and checks and 
balances.
    You know the expression they used to say back in the 
founding days, we are a Government of laws, not men, well, we 
would say today we are a Government of laws, not people. But we 
are a Government of laws and people, as the Inspector General 
said. We have the laws on the books. We have the rules on the 
books. And these people skirted them, disobeyed them, and it 
will happen until the end of time. But we have to get to the 
bottom of this. I think it is going to take your most trusted 
people, with the most integrity, to get out to these areas and 
make them understand, they don't just do anything that comes 
along. They have to carry out a very important mission and do 
it with the highest integrity.
    So I have one more sticky wicket, which is not a hard 
question for the Inspector General at all. Has anyone in any 
way ever tried to stop you from this investigation in the 
Senate or in the House?
    Mr. Miller. No.
    Senator Boxer. Has anyone called you and said, go easy on 
this?
    Mr. Miller. No.
    Senator Boxer. Has anyone called you, Mr. Tangherlini, a 
Senator or House member, and said, go easy on this?
    Mr. Tangherlini. No.
    Senator Boxer. OK. I want that clear, because we have a 
chairman over in the House who was saying that one of the 
Senators is trying to stop this investigation. And that is an 
outrage.
    So I am going to read in our close what the Inspector 
General said. ``There is a glimmer of good news. The oversight 
system worked. My office aggressively investigated, audited, 
interviewed witnesses and issued a report. No one stopped us 
from writing a report and making it public.''
    And the whole ugly event is now laid bare for all to see. 
Justice Brandeis said that sunlight is said to the best of 
disinfectants; how true.
    So let the record be clear: there isn't one Senator or no 
Member of Congress who is trying to do anything other than get 
to the bottom of this. And the two of you, and I have to say 
Ms. Brita, you are the good guys and you are the heroes of 
this. We should never forget that. We stand with you, and we 
will be with you every inch of the way. Don't let anyone stop 
you from doing the right thing here. Because the days are over 
of these parties, they are over. The days of being 
unaccountable at GSA are over.
    And we have to make sure they are over long after none of 
us is sitting in these rooms. That is what the Carter 
administration thought. They put people in jail, there was 
fraud, they protected whistleblowers, and we got back again and 
again and again. So let's make it this time, set into place a 
system that is going to stop all these bad things that have 
happened and more. And I think you do it with the best people, 
and you do it with the kind of an organization that builds in 
the checks and balances. So if you have a bad actor, that bad 
actor is found out. There is a layered system.
    One of the things about the defense at the airports, and we 
are all critical, and we don't think they work, and sometimes 
they are abused and so on, it is a layered system of defense. 
It is a layered system. You buy the ticket; you are checked 
out. You go through; you are checked out. You go to the desk; 
you are checked out. Your baggage is checked; everything is 
checked. So if you have multiple checks, then you are doing 
your best.
    Does it mean it is perfect? Does it mean it is foolproof? 
No, because we are humans. But I think you can do it. If ever I 
saw two people, three, if I might add, who have the integrity 
and who have the will, it is the three of you. And the others 
here, who I don't know, who I believe want to help you do it.
    So let's show the world, let's show our taxpayers that we 
are going to fix this. And although this is a horrible 
situation, and we could see more parade of horribles, we are 
going to change it, and we are going to make sure that we 
change it for good.
    Thank you very much. We will stay in touch. Thank you.
    [Whereupon, at 11:45 a.m., the Committee was adjourned.]

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