OTR Interviews

You, the taxpayer: the GSA's bottomless 'slush fund'

Hawaii, Las Vegas, lavish parties ... evidence of lavish government waste and excess mounts ahead of hearings on agency


This is a rush transcript from "On the Record," April 11, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: From exotic taxpayer-funded vacation to lavish parties, there is more news about the GSA's Vegas convention that will make you spit fire! Word tonight that dozens of GSA employees and bureaucrats got bit cash bonuses for arranging that conference. Yes, they got paid extra for spending your money on clowns and mind readers.

Several congressional hearings on the GSA are set for next week. Congressman Jeff Denham chairs one of the subcommittees that will hold a hearing. He joins us.

Good evening, sir.

REP. JEFF DENHAM, R-CALIF.: Good evening.

VAN SUSTEREN: You're going to have quite a week next week. So tell me, who do you intend to call as a witness before your hearing?

DENHAM: Well, we certainly want to call in all of the individuals that have already been fired or are on administrative leave. But we want to go much deeper. We want the new acting director to come in and explain how he's made the changes so that this will never happen again.

We also want to have the CFO that approved all of these various expenses, everything from the lavish Las Vegas vacation to last year doing a trip to Hawaii. I mean, this is something we've been asking for an audit on for the last year-and-a-half.

I'm a freshman. I chair the committee. We've been asking for this information, and now we're demanding it. We are going to change the culture. It stops with us right here at this committee. We're going to continue to dig, and then we're going to put some transparency in place so that this never happens again.

But people are outraged. I'm home in my district...

VAN SUSTEREN: Oh, they...

DENHAM: ... and people are asking me, How does this happen? When we've got double-digit unemployment, how is government able to do this?

VAN SUSTEREN: Here's -- here's one -- here's another one of my, quote, "favorites." I mean, I keep -- I say it sarcastically. Fifty employees got cash awards of $500 and $1,000 for their work arranging the Vegas conference. So it's not only did people get the free conference, $820,000 conference, and they were handing out iPads and getting clowns and mind readers, but there were bonuses to the ones who -- who were -- I guess swindled us out of this money, bonuses for those who arranged it!

DENHAM: Yes. Absolutely. At a time when the president and his administration have said there are going to be no more bonuses, he made that executive directive two years ago, and yet you're seeing an agency that not only gave out bonuses, but this is corruption. This is fraud. I mean, they are taking taxpayer dollars and spending them lavishly on all these different vacations.

VAN SUSTEREN: If it's corruption, if it's fraud, do you have any back off, if it's -- if you think it's a good thing to do, is to do a referral to the Justice Department. I mean, if they're -- if they're taking money without permission, if there's any way that suggests it's corruption or fraud, as you have described, do you have any problem referring it to the Justice Department for investigation?

DENHAM: No. If there have been laws that are broken, we absolutely need to turn that over to the authorities. And we need to prosecute to the fullest. We need to make an example out of people that, you know, have created this type of distrust with government.

VAN SUSTEREN: I'm particularly curious, so maybe you'll be asking about it next week, about paying this $330,000 to move someone, a realtor - - apparently, they don't have realtors in Hawaii -- to move a realtor from Denver to Hawaii. It cost us $330,000, and then the realtor quits in a year.

I'm curious if you're going to particularly zero in on that one because I don't -- I don't understand how you spend $330,000 in a move like that.

DENHAM: No. It's embarrassing. And we're going to continue to not only dig and get a lot of this out at this first hearing, but we're going to look at possibly holding several hearings. If individuals don't show up to this hearing, we're going to subpoena them. We have the power to subpoena.

But the bottom line is, it's going to stop right here in this committee. We're going to introduce legislation to make sure that we have the transparency so that the American public can see.

I mean, the frustrating thing about this, these are all of our federal properties that we either lease out to other government agencies or private individuals. That money goes back into this public building fund. And now this group in GSA has spent this money -- you know, it's billions of dollars that go into this account with no accountability, no transparency, no budgeting. And we want to know exactly what's been spent, which is why it's so important to have the CFO actually at our hearing to testify.

VAN SUSTEREN: Do you know what account this is, or are there multiple accounts that are paying for these? Is there something like a party account, or -- I don't know, they probably don't call it a party account. Maybe they call it a promotion account or incentive -- do you know what these accounts are called from -- I mean, because the money is coming out of something, and it's being funded from someplace, someplace on Capitol Hill. So I'm curious, do you have any idea, you know, who's writing the checks and who's saying yes and no on these?

DENHAM: Somewhat. And we're trying to clarify that further. But the majority of the money is being spent out of the public buildings fund, which Congress does not get a chance to see. It's not an annual appropriation. It's because we have all of this money coming in by rent that is being paid, and the billions of dollars sit into this account.

You know, it should be used to redevelop buildings or sell buildings off that we're not using. And instead, you know, you can see the wasteful spending here.

VAN SUSTEREN: Who's in charge of the public fundings fund? Do you know?

DENHAM: Well, it went to the director at the time, which was Bob Peck. But certainly, Martha Johnson, who is the president's appointee that was just confirmed by the Senate late last year -- you know, she signs off on everything and signed off on a lot of these things.

VAN SUSTEREN: I mean, literally signed off? I mean, it came to her. Here's a -- here's a -- I shouldn't say party, that's me being sarcastic. But say it's a convention in Las Vegas, we need $820,000. Would that be something she would see and sign off, or is it -- is it more laundered and nuanced so you don't know exactly what you're signing off on?

DENHAM: No, we believe that, according to the inspector's general report, that not only did she have direct sign-off, but she knew exactly what the line items were.

I mean, and this was a party. I mean, we not only have the documentation but the videos to prove that what they were doing was not something that, you know, helped out the taxpayer by any means. This was a party that they got paid to show up to. Their rooms, and you know, expenses were all paid for. I mean, these are penthouse suites at the M Resort, 2,200-square-foot-rooms paid that were paid for by taxpayers.

VAN SUSTEREN: Is there any reason why -- I mean, I don't even know -- scuba diving -- I take it that there's no sort of good business, government reason that we should be paying for scuba diving. We paid probably for their time being there, but I don't even know if we paid for the scuba lessons, but I guess you would agree that that would be sort of an unusual skill that anyone in the GSA would need.

DENHAM: Oh, absolutely. And when they extend their stays, as well, and have their families stay over, and yet that family vacation is paid for by taxpayers -- absolutely, that is all fraud. And certainly, the abuse that, you know, each of these individuals not only should be held accountable for, but should be paying them back.

VAN SUSTEREN: Congressman, thank you, sir. Good luck at your hearings.

DENHAM: Thank you.