OTR Interviews

Issa: What we know now is that GSA officials stole taxpayer money

Execs testify on Las Vegas spending scandal


This is a rush transcript from "On the Record," April 16, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, a public beating! The outrage over the GSA's colossal abuse of taxpayer money reaches Capitol Hill, Congress finally opening its eyes to what's going on. There was yelling and screaming about the GSA's lavish trips to Vegas, Hawaii and Palm Springs, all at the expense of you, the taxpayers. But then silence, the organizer of the $800,000-plus Vegas conference pleading the 5th!


REP. DARRELL ISSA, R-CALIF., OVERSIGHT COMMITTEE CHAIRMAN: Mr. Neely, did you approve funding for the 2010 western regional conference?

JEFFREY NEELY, GSA PACIFIC RIM REGION COMMISSIONER: Mr. Chairman, on the advice of my counsel, I respectfully decline to answer based upon my 5th Amendment constitutional privilege.

ISSA: Just a few more. Mr. Neely, was the original -- what was the original budget for that conference?

NEELY: Mr. Chairman, on the advice of my counsel, I respectfully decline to answer based upon my 5th Amendment constitutional privilege.

ISSA: Mr. Neely, are you currently employed by the GSA as federal employee?

NEELY: Mr. Chairman, on the advice of my counsel, I respectfully decline to answer based upon my 5th Amendment constitutional privilege.


VAN SUSTEREN: But Jeffrey Neely's stonewalling didn't stop lawmakers from giving him and other GSA officials a tongue lashing. Listen to this!


REP. ELIJAH CUMMINGS, D-MD: Mr. Neely (INAUDIBLE) believe they were some sort of agency royalty, who used taxpayer funds to bankroll their lavish lifestyle. They disregarded one of the most basic tenets of government service. It's not your money, it's the taxpayers' money.

REP. JOE WALSH, R-ILL.: And the $68,000 spent on yearbooks. Do you believe Mr. Neely thought that was his money?

MARTHA JOHNSON, FORMER GSA ADMINISTRATOR: I don't know what he was thinking.

WALSH: Do you think it's your money? Whose money is that?

JOHNSON: It's the taxpayers' money.

REP. JASON CHAFFETZ, R-UTAH: Ms. Johnson, can you tell me about Results.gov? You highlight it as one of the great accomplishments of the GSA. What does it do?

JOHNSON: The Results.gov, among other on-line Web sites, allows federal government employees, as well as U.S. citizens, to look at and access data about their government.

CHAFFETZ: So when I type in www.Results.gov, why does it come up blank?

JOHNSON: I don't know, sir.

CHAFFETZ: Mr. Robertson, you're the chief of staff.

MICHAEL ROBERTSON, GSA CHIEF OF STAFF: I'm unfamiliar with the Results.gov Web site.

CHAFFETZ: So you're citing -- now, this is the disconnect. You're the chief of staff, she's the former administrator, she cites it as one of just a handful of great accomplishments of the GSA, and you don't even know what it is?

REP. TREY GOWDY, R-S.C.: The notion that you have to spend $800,000 to exchange ideas is laughable and perhaps criminal. And the part that galls me the most is the hypocrisy of GSA not even following its own damn rules! You are so quick to make everyone else follow the rules, and you can't follow your own rules!

REP. MIKE KELLY, R-PENN.: I got to tell you, I cannot -- as a guy who's only been here 14 months, thank God some of us are here now because, apparently, you folks that have made a career out of spending taxpayer money have got some kind of a magic shield where you stay inside this bubble that allows you to do those things without absolutely any, any feeling of wrongdoing!


VAN SUSTEREN: So did the House Oversight and Government Reform Committee get any answers? Chairman Darrell Issa joins us. Nice to see you, sir.

REP. DARRELL ISSA, R-CALIF., HOUSE OVERSIGHT COMMITTEE CHAIRMAN: Well, thanks for having me on, Greta. And yes, we did get answers.

VAN SUSTEREN: I was just listening -- I just want to make a comment about the congressman who just spoke, the one -- congressman who's only been here 14 months, talks about spending taxpayer money -- hard not to think it's that he misused ... He should have said stealing taxpayer money!

ISSA: You're absolutely right. And Mike Kelly is a career car dealer, owns several car dealerships, understands a tough business that went through tough times. And he ran for Congress anyway because he felt there needed to be a change in Washington.

And today, he heard the former administrator talk about bonuses as entitlements. He heard a series of those sort of misunderstandings. He saw that they had no answers to questions even from their own opening statements.

VAN SUSTEREN: All right, when you talk about bonuses, last -- one other question I was going to ask you is that last year, the GSA debated whether to give Neely -- that's the man we saw in a suit -- of course, some of us may be more used to seeing him in a bathtub -- we'll get to that in a second -- a bonus for job performance. He was granted a $9,000 bonus over objection of one administrator, Susan Britta, but a $9,000 bonus.

ISSA: Well, clearly, the administrator, the outgoing administrator, Ms. Johnson, doesn't understand that you don't have an entitlement and that when you have clear misconduct, when you have a strong suspicion of misspending and...

VAN SUSTEREN: It's not misspending! You know what? It really isn't! It is so much more than that! Because you know -- look, I mean, like, here's a good example. David Foley, a GSA official who was captured on video joking about the agency spending at the 2010 conference. He said he did not know the over-the-top expenses were being paid for with government money! Now, who did he think was paying for that?

ISSA: Well, clearly, what we know now is that Neely and others, in fact, stole money. They used money that had to be used personally, implied to some people that it was personal, but in fact, used the GSA credit cards for a number of expenses.

The important thing here, though, is what you saw was existing people still on the full payroll either not answering questions or, in fact, answering them as though they did nothing wrong.

This is part of the culture that every president inherits, that the reason we give political appointees the opportunity to work is they're supposed to bring about that kind of change, control and reform. And that's what hasn't happened in this agency for at least the last three years.

VAN SUSTEREN: All right, Jeffrey Neely -- not only did he get a $9,000 bonus, he is still on the payroll. He's on leave, but he's still on the payroll...

ISSA: He'll make $179,000 a year until he is terminated, which could be a very long time.

VAN SUSTEREN: What's it going to take terminating him?

ISSA: Well, you know, hopefully an indictment and conviction. But it seems like short of that, at least this administrator, and hopefully, not the next, imply that you can't get rid of these people any other way.

And that's why we asked, in no uncertain terms, Are you going to be able to make these changes, or do we have to make changes in the statute, including the idea that somebody could absolutely -- the proof is clear. And this individual won't retire, and in fact, when we called him to testify, we, the taxpayers, pay for him to come from San Francisco because he's still a current employee.

VAN SUSTEREN: I can't even -- he's probably at the Ritz Carlton, too, here in D.C., or at least it's...

ISSA: Well, I hope that the GSA found the best rate...

VAN SUSTEREN: I actually...


VAN SUSTEREN: This is appalling. It's so absolutely appalling that it's almost -- I mean, you laugh in horror.

ISSA: You know, this is something. You know, every member of my committee, at least on my side of the aisle, is a volunteer. Every member of my committee chose to be on our committee as the committee that oversees waste, fraud and abuse. And Greta, you held me accountable a few days ago when you said, Why didn't you know?

VAN SUSTEREN: Yes, why -- OK, what's the answer?

ISSA: And a big part -- a big part -- well, why didn't -- we didn't know is because the IG didn't inform us. And the current statute doesn't require him to inform us, but historically, we have been informed. It was one of the topics today...

VAN SUSTEREN: Well, what's wrong with good sense? I mean, like, you know, yes, OK, maybe his -- he doesn't have to tell you, but what in the world is he thinking? He's in charge of -- he's the inspector general! What does he think his job is, to hide it?

ISSA: The amazing thing is, the chief of staff, Robertson, informed a lawyer at the White House in May of last year. So the problem was, he informed staff who informed the White House, who said they did quick action. But very clearly, they let a year pass, and it wasn't until the eve of this becoming public that they began taking action.

VAN SUSTEREN: Well, I'll tell you some more, quote, "quick action." I have here April 13th, 2012, three letters. This quick action -- that's what, three days ago, from the acting commissioner. And one is to Robert Peck, saying that he owes $1,069 for a party he held in his room at the M resort. And the -- and Linda Cherroll, the commissioner, says, It's unconscionable that the taxpayers should bear his cost for his personal party.

Here's one to Jeffrey Nelly that -- three days ago.

ISSA: Neely.

VAN SUSTEREN: ... this quick action -- Neely, the three -- the quick action was three days ago, saying he owes $2,717.09 for a party he had at the M resort. Here's another one to Mr. Robert (INAUDIBLE) $922 for personal expenses at these resorts.

It took until three days ago to figure this one out?

ISSA: Well, more importantly, this is a fraction. You know, the buying of gifts and giving them to people -- this so-called bicycle thing, where they bought these bicycles, and then proceeded to have a catered event to give them to the poor, as though they were being given by the individuals, rather than you, the taxpayers.

But I'll tell you, Mr. Peck and others haven't seen the last of it. He will be before -- and his issues will be before the subcommittee tomorrow with Jeff Denham. And I've got to tell you, there's a lot more that has to be fixed at GSA. We simply had only so much time. And this is only the first of what will be many hearings.

VAN SUSTEREN: Are you going to make a call to the Justice Department to open a criminal investigation?

ISSA: We expect the IG's referral to be acted on. I will tell you...

VAN SUSTEREN: Referral's already been made to Justice?

ISSA: The referral has already been made. The IG will follow up on it. So will we. We expect to have criminal indictments. The IG has done a very good job of making a case for number of items that go far beyond these repayments.

But let's remember, the important thing is change. These individuals, if we're very lucky, in a relatively short period of time, will be dismissed. But under the current law, they'll be dismissed with 30 years worth of retirement. They'll go on to something else.

The question is, how do we change this at 24 agencies? I wrote 23 additional letters to other agencies, asking that they give us a breakdown similar to the GSA on their conferences because this is one of many areas.

VAN SUSTEREN: I'll tell you how you get -- one of the ways you get change is that handcuffs goes on somebody! We have the perp walk, and you see someone who is -- I mean, when -- when you have -- I mean, look, you have an obligation not to steal taxpayers' money. And you know, when it's so blatant when you're doing things that are just so over the top -- $820,000 for a party. And we didn't even get to the fact that they had the one for the interns down in Palm -- some resort...

ISSA: Or for that matter, five people flying out for five days for a one-minute or five-minute ribbon-cutting, but enjoying their family vacation in Hawaii.

You know, one of the things, Greta -- and I'll tell you, we have to be careful in Congress. We were threatened by Mr. Neely's attorney that he was going to try to use the D.C. bar's ethics rule against our counsels, who are members of the bar, for, quote, "bringing somebody who asserted they were going to take the 5th." I made a decision...

VAN SUSTEREN: Who was the lawyer? Whose lawyer?

ISSA: Mr. Burton.


ISSA: At Poe and Burton, I think. But you know, he made it very clear that that was part of it. Now, we went through the details. But I'll tell you, the D.C. bar has to ask a question, if somebody simply threatens to take the 5th, are we just to simply ignore that in our investigation?

VAN SUSTEREN: I wouldn't -- I wouldn't be too worried about them right now. I think there are other, bigger fish to fry than that. But anyway, Congressman, thank you, sir.

ISSA: Thank you, Greta.