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AP source: Watchdog suggests criminal probe of GSA

A top official of the General Services Administration, already on leave for his role in lavish agency spending, has been referred to the Justice Department for a potential criminal investigation, a congressional committee official said Friday.

Whether the referral was directly connected to the activities of the GSA executive, Jeffrey Neely, in an $823,000 GSA spending spree for a 2010 conference at a Las Vegas resort wasn't known, the committee official told The Associated Press. The official was not authorized to publicly discuss the referral and requested anonymity.

Neely, a senior executive at the GSA, was placed on leave by the agency's new management from his job as regional commissioner of the Public Buildings Service for the Pacific Rim. He was largely responsible for the Las Vegas conference.

Neely's attorney, Robert DePriest, did not immediately comment.

GSA Inspector General Brian Miller has told several congressional committees investigating the agency that there have been criminal referrals.

An internal government memo released Friday shows officials of the GSA were aware of a spending problem months before the scandal burst into public view this month.

The GSA's deputy administrator, Susan Brita, emailed agency officials last July that the inspector general found no substantive agenda for the conference. She said that expenses for a clown suit, bicycles used for a team-building exercise, tuxedos and a mind-reader didn't lend themselves to the claim of a substantive conference.

Brita also questioned why a regional administrator in charge of the conference received only a disciplinary letter that "is not even a slap on the wrist."

A major concern in the memo was how The Washington Post, with thousands of readers who are federal employees, would report the story.

A GSA spokesman declined to comment, saying the agency preferred to let the email speak for itself.

The email was sent to Robert Peck, then the head of the GSA's Public Building Service, with copies to his deputy, David Foley, and another top agency official, Stephen Leeds.

Peck and Leeds were fired after the inspector general issued a stinging report earlier this month on the cost of the conference to taxpayers.

GSA administrator Martha Johnson resigned in the wake of the report. Eight GSA employees have been placed on administrative leave, including Foley. He is seen in a conference video giving an award to an employee who produced a rap video bragging about the conference spending.

The email by Brita, who remains at GSA, was made public by the House Oversight and Government Reform Committee, which will conduct the first of four hearings on GSA's spending practices next week. The agency is in charge of federal buildings and supplies, and part of its mission is to save taxpayers money.

"The Obama administration has not been upfront with the American people about how long they've known about lavish spending abuses at GSA," said the committee chairman, Rep. Darrell Issa, R-Calif.

"It's clear that they were fretting about the political consequences and preparing for media scrutiny on abuses many months ago, but didn't seem to take real actions until the release of the inspector general's report couldn't be delayed any longer," Issa said.

Brita wrote that a letter to Neely "should be crafted with a WAPO (Washington Post) mind frame." She said she had no doubt the Post would connect the lavish conference spending to a period of high unemployment and a down economy. She wondered what the reaction to the story would be from the public and Congress, and questioned how GSA's political leadership would respond.

"Jeff is a seasoned SES (senior executive service employee) who is expected to display the highest standards of common sense, and prudent financial management," she wrote Peck.

"He did neither. Sorry, but your letter is not even a slap on the wrist," she wrote.

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