Former GSA Administrator Martha Johnson and Jeff Neely, a regional commissioner, are sworn in at a hearing Monday.

Former GSA Administrator Martha Johnson and Jeff Neely, a regional commissioner, are sworn in at a hearing Monday. J. Scott Applewhite/AP

GSA leaders apologize for spending at Las Vegas conference

Regional Commissioner Neely pleads Fifth Amendment at hearing; ex-Administrator Johnson explains resignation.

Jeff Neely, the federal executive at the center of the overspending scandal at the General Services Administration, invoked his Fifth Amendment rights before a congressional panel on Monday while former GSA Administrator Martha Johnson struggled to explain why Neely was given a $9,000 bonus before being placed on administrative leave.

At the first of a series of hearings on the extravagant spending at GSA’s October 2010 training conference in Las Vegas, several top GSA officials apologized to lawmakers, their colleagues, the president and the American people for failing to head off what became a four-day $820,000 entertainment fest for 300 Western Region employees.

“What has come to light surrounding GSA’s activities should give pause to anyone who has opposed cutting government size and spending,” said Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee. “Wasteful spending is a problem that transcends multiple administrations and multiple Congresses, but it’s incumbent on the present administration and the current Congress to mandate a culture that prevents this type of waste and mismanagement, no matter what happened before them.”

Issa set out to answer five questions: why did it take 11 months from the time top GSA officials learned of the misbehavior for them to act against the culprits; why Johnson resigned; why GSA Chief of Staff Michael Robertson didn’t appear to know of the goings-on; why Neely got a bonus; and how newly appointed acting Administrator Daniel Tangherlini can work with Congress to avoid such mishaps in the future. “Solutions won’t come from finger-pointing at current or past administrations,” Issa said, “and it is incumbent on this administration to change the GSA’s culture for the next administration.”

Anticipating that Neely would decline to testify, Issa and ranking minority member Rep. Elijah Cummings, D-Md., made it clear they opposed granting him immunity from prosecution. GSA’s inspector general, it was reported on Friday, has referred some aspects of the case to the Justice Department. Neely took the Fifth Amendment in response to Issa’s questions on his title, whether he attended the Las Vegas conference, whether he approved its funding, what was its original budget, whether he was still employed at GSA, and whether he would answer any questions.

Cummings scolded Neely for reportedly allowing his wife, who is not a federal employee, to participate at the events at taxpayer expense and to impersonate a federal employee to attend a private sector event. He mocked Neely’s emails in which he had joked about spending federal monies, because Neely said, “why not enjoy it while we have it -- it won’t be there forever.” Cummings contrasted his behavior with that of other federal workers’, who “pull money from their own pockets to pay for coffee at the office.”

Johnson, confronted by several lawmakers as to why she gave Neely a bonus, distinguished between the performance evaluation process and the separate conduct evaluation process. She said she didn’t fire Neely because she had to wait for the investigation to be completed. A July 25, 2011, email from the Deputy Inspector General Robert Erickson, said, “Please be advised that the investigation is ongoing and no personnel action should be taken until you have received the final report.”

Lawmakers, however, pointed out that a separate IG report on abuses in GSA’s since-discontinued Hats-Off employee awards program -- in which Neely was reportedly involved -- already was complete when he got the bonus. Issa said he was troubled by Johnson’s ability to “bifurcate” the process.

Overall, Johnson was contrite, though she cited many of GSA’s accomplishments and pointed out that the conference was planned long before she was sworn in for the top job and that spent her first months filling vacancies. “The Western Regions’ Conference, which had been an economical, straightforward set of training sessions in the late 1990s, had evolved into a raucous, extravagant, arrogant, self‐congratulatory event that ultimately belittled federal workers and would stain the very work that other committed staff and I were preparing to do,” she said.

“I personally apologize to the American people for the entire situation. As the head of the agency, I am responsible. I deeply regret that the exceedingly good work of GSA has been besmirched. I will mourn for the rest of my life the loss of my appointment and its role in leading a vital and important part of the government.”

Most lawmakers complimented Johnson for her courage in resigning while those responsible for the scandal remain on the payroll. She said she reached her own decision to leave about three or four days before the final IG report came out.

GSA Inspector General Brian Miller, whose April 2 report provided the damning details about the misadventure, diagnosed the problem as follows: “In attempting to model the entrepreneurial spirit of a private business, some in the Public Buildings Service seemed to have forgotten that they have a special responsibility to the taxpayers to spend their money wisely and economically. While a private business may use its profits to reward employees in a lavish fashion, a government agency may not,” he said.

Miller said his office is still receiving evidence to be used in further investigations that “perhaps involve kickbacks and bribes.”

David Foley, deputy commissioner the Public Buildings Service, apologized for the joking remarks he made while addressing the conference, which were captured on video and circulated, saying he was not aware of the array of spending excesses using public funds -- such as tuxedos and after-hours parties -- on the night in question. He said he should have used his time on the stage to remind employees of the serious job they have to do for the taxpayers.

GSA Chief of Staff Robertson said he was “appalled and disappointed by the indefensible conduct.”

Several lawmakers raised their voices in disgust, castigating Robertson for being unaware of the event’s nature and aftermath. “It’s no wonder the American people have lost faith in the American government,” said Rep. Mike Kelly, R-Pa.

Rep. Mike Turner, R-Ohio, held up swag given out at the conference, including commemorative coins; a photo book; and a black vest, like that warn by a Vegas blackjack dealer, imprinted with the conference logo. He pointed out that some of the items were made in China and not in the United States and suggested that they were paid for using stimulus money from the Recovery Act. (Miller explained that no stimulus money was used, but the items were bought on government purchase cards on building operations accounts.)

Past Western Region conferences in Oklahoma City and New Orleans cost less than half the Las Vegas one, Rep. James Lankford, R-Okla., pointed out.

Rep. Gerry Connolly, D-Va., suggested that part of the problem at GSA is that its regional structures operate with too much autonomy. Johnson noted one of the recent reforms is to better centralize the authority.

Acting GSA leader Tangherlini sent testimony saying he had known only brief details of the event when he arrived, but as he learned more he found the conduct “shocking” and “appalling,” pledging to work with the inspector general to recover money spent on such activities as in-room receptions.