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GSA Scandal Worsens

The Capitol building is seen at sunrise on Capitol Hill in Washington, November 17, 2010.   REUTERS/Jim Young   (UNITED STATES - Tags: POLITICS)

The Capitol building is seen at sunrise on Capitol Hill in Washington, November 17, 2010. REUTERS/Jim Young (UNITED STATES - Tags: POLITICS)  (Reuters)

GOP congressmen probing the growing scandal at the General Services Administration about its waste of taxpayer money now tell FOX Business that they've uncovered evidence that a top ranking GSA official fraudulently overbilled taxpayers for a personal hotel stay at the luxury M Resort Spa and Casino in Las Vegas.

And a transcript of federal interviews of a GSA whistleblower in 2011 that FOX Business has obtained shows the unnamed whistleblower had raised concerns about “extravagant” waste at the agency to the GSA board of directors, but there was fear of retaliation, of “being squashed like a bug.”

The transcript also shows that the GSA’s Las Vegas junket was not the first time the GSA blew taxpayer money on lavish hotel accommodations for federal workers.

The government agency, which oversees federal real estate, is now under fire for wasting more than $822,000 in taxpayer money on a lavish conference in 2010 at a luxury resort in Las Vegas for 300 federal workers that included penthouse suites, a mind reader, a clown, a bicycle training exercise, and expensive catering -- spending that was mocked by the GSA’s own workers in videos.

The GSA official, who is not named, allegedly paid the lower $93 government rate for an additional night’s stay at the hotel, which costs $1,000 a night. But he then charged federal taxpayers for the full $1,000, and pocketed the difference, Reps. Jeff Denham (R-Calif.) and John Mica (R-Fla.) charge.

The two Congressmen also say 50 GSA officials got bonuses amounting to $500 to $1,000 each for arranging this conference, now dubbed the "Vegas Vacation," which wasted taxpayer dollars.

GSA workers also received “awards” that included free Ipods, gift cards, and DVD players.

And the two Congressmen have documents that confirm GSA officials blew at least $1,000 for shuttle buses to the Vegas strip when there was no work function.

Transcripts of federal interviews with a GSA whistleblower in 2011 that FOX Business has obtained shows the GSA whistleblower had raised concerns about “extravagant” spending on lavish conferences at the agency to the GSA board of directors, but there was fear of “being squashed like a bug”:

GSA Employee: “You know, (redacted), (redacted) I think she was -- she’s been trying to bring this stuff up at the board of directors meeting and she’d promptly get squashed like a bug when she brought up any kind of things concerning the conferences and the extravagances and the suites and the, you know, the hotel suites, because typically at any conference, I mean, the WRC (Las Vegas conference) was not a one-time thing where certain people got these very extravagant accommodations.”

Staffers for the two congressmen are poring through documents from the GSA’s inspector general’s office, and plan to release details at a hearing next Tuesday, April 17. Another hearing will be held April 16.

Because of the conference, three GSA officials lost their jobs, including former administrator Martha N. Johnson, and five others were suspended. Ms. Johnson has been invited to testify next week.

Dan Tangherlini, acting administrator of the GSA, says in a statement: “What took place was completely unacceptable, there were violations of travel rules, acquisition rules and good conduct,” as well as violations of “rules of common sense, the spirit of public service and the trust that America’s taxpayers have placed in all of us.”

Tangherlini notes that the GSA “creates and manages the rules and regulations governing travel and conferences” for federal agencies, no small irony in the wake of the GSA’s scandal.

The GSA’s waste of taxpayer money on things like federal junkets has embarrassed the White House, as President Barack Obama hits the campaign trail with speeches that attempt to justify raising taxes on Americans who are already tightening their budgets, at a time when many people feel government spending has veered out of control.

The president now seeks higher taxes on Americans via health reform and on the upper brackets, at a time when Government Accountability Office and other federal reports show the government routinely wastes hundreds of billions of dollars, and the federal deficit is about to surpass the gross domestic product, at $15 trillion.

Since President Obama took office, the federal government has added about $5 trillion in spending to the federal deficit.

"There must be serious action for the outrageous spending habits of the General Services Administration,” said Rep. Denham (R-CA), who is probing the matter.

“GSA bureaucrats who helped arrange the Las Vegas junket were handed cash bonuses for their work in wasting the better part of a million dollars,” Rep. Mica said. The Washington Post has reported that the GSA has cancelled an upcoming conference in Vegas on April 25.

One video played at the Vegas conference shows GSA workers touting their energy-saving efforts to help the agency “go green,” with signs and songs with lyrics that read: “POTUS [the president of the United States] wants a press event, a project he can show.” Another video shown at the conference and released by Congress last week shows a ukulele-playing GSA worker mocking GSA spending.

There is a move now afoot to abolish oversight duties of the GSA and privatize sections of the agency. A bill sponsored by Rep. Denham would attempt to privatize oversight of the GSA’s real estate portfolio of federal buildings.

The debate is now on whether private Realtors would do a better job saving taxpayer money, plus unload hundreds of billions of dollars in federal real estate the government doesn't need or use.

"The GSA is a slush fund for federal workers and politicians," says Rep Denham.

Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).