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Looking Back at the GSA Scandal: Did the Administration Overreact?

Some say the response to lavish spending in Las Vegas was too heavy-handed, given the limited scope of the problem.

On April 2, 2012, the General Services Administration’s inspector general released a report that would change the fate of the agency -- and in some ways, that of the entire federal government.

On that day, GSA’s watchdog released the now infamous Management Deficiency Report , one of the most explosive looks at a federal conference in the history of such publications. The IG unearthed details of wasteful spending complete with luxury hotels, hot tubs and mind readers.

In the aftermath of headline-grabbing, nationally stoked outrage that shook GSA to its core, heads rolled and laws were changed. Administrator Martha Johnson was forced to step down, and the agency cleaned house at its Public Buildings Service, which put on the conference.

Just one month after the report came out, the Obama administration released a memorandum demanding all agencies reduce spending on conferences, travel and other “administrative costs” by 30 percent. Since that memo’s release, all conferences across government with a price tag of more than $100,000 must be reviewed by agency deputy secretaries or their equivalents. All single conferences costing more than $500,000 (GSA spent more than $800,000 on its Vegas affair) are banned.

The Office of Management and Budget also called for increased transparency, demanding agencies post information about conferences publicly.  While some say these spending caps attempted to create a one-size-fits-all solution to a problem that was limited in scope, they have -- as of January 2014 -- saved $3 billion, according to OMB. The Defense Department alone saved $69 million in fiscal 2013, simply by tightening restrictions on conferences that cost more than $100,000.

“The administration remains committed to responsibly managing conference activities and ensuring that conference spending across the government supports mission critical activities,” Beth Cobert, OMB’s deputy director for management, told a Senate committee last year.

GSA itself underwent a major overhaul when its outgoing Administrator Dan Tangherlini took charge following the scandal. The agency has saved $30 million in conference and travel spending since 2012 “as a result of strict internal reforms and oversight,” according to GSA spokeswoman Jackeline Stewart.

“Under Administrator Dan Tangherlini's leadership we have implemented strong policies to improve oversight and strengthen controls on any spending for conferences or travel, saving millions in taxpayer dollars,” Stewart said. “Our agency remains committed to eliminating excessive federal spending and promoting government efficiency.”

Where Are They Now?
Where the major players in the GSA scandal have landed.

Those changes have not come without significant commitments of personnel and funding: Tangherlini’s overhaul came after a “top-to-bottom” review of the agency to find ways to reorganize, eliminate waste and reduce inefficiencies. The GSA inspector general initiated an audit of 77 different conferences that took place between 2010 and 2012 and cost more than $10,000 to find any examples of abuse. In its fiscal 2014 budget proposal, GSA asked for a $5 million appropriations bump for its inspector general, citing the work it did outing the Vegas conference to justify the increased allocation. Congress complied with the request.

To some, the White House and GSA responses were heavy handed. In fact, the Merit Systems Protection Board confirmed as much last month when it exonerated two employees who were placed on administrative leave following the report’s release, and later fired. MSPB found GSA management was overzealous in its pursuit to punish regional commissioners James Weller and Paul Prouty, who have since returned to the agency.

“Both of these guys are exemplary leaders,” Robert Peck, the former PBS chief fired in the wake of the scandal, told Government Executive . “These are guys who are totally dedicated to the organization.”

To Peck, the extent of GSA’s missteps has been overstated. Very few employees were involved in the planning of the lavish conference, he noted. Conference spending reformers were emboldened, however, when the Internal Revenue Service’s inspector general found the agency spent $4.1 million on a two-day event in Anaheim, Calif., including a parody Star Trek video.

Still, Peck, who now works in private-sector real estate, said the across-the-board approach to conference spending was sort sighted. The “sweeping” policy changes are not the best way to address a problem “in government or any enterprise,” he said.

Of course, when an agency is forced to reduce administrative spending so dramatically, it will inevitably lead to fewer employees attending a conference, or the event’s cancellation altogether. The loss of knowledge sharing that results can take its toll.

“People need to meet face-to-face,” Peck said. “If you have a nationally dispersed organization -- I don’t care what it is -- you need to bring people together.”

Scott Amey, general counsel for the Project on Government Oversight, told Government Executive the major scandals served as a “wakeup call” to agencies that certainly had fat to trim. Sure, the ensuing budget cuts were reactionary, Amey said, but that is just how Washington works.

“At this point,” Amey said, “it’s put people in a position where they should have been before, where they are a little more conscious” about which conferences they attend.

GSA clarified in a December 2013 memo that certain “mission critical co-location events” were never intended to be included in restrictions. OMB has emphasized the answer is not no conferences, just smarter ones.

“Moving forward,” Cobert told the committee, “we are continuing to sharpen our understanding of both the value of conference attendance to mission critical departmental activities and the opportunities to reduce expenditures -- both of which are central to continued good stewardship of the taxpayer dollar.”

Click here to see where the major players in the GSA conference scandal are today.

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