[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
__________
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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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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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