Published April 16, 2012
WASHINGTON – The General Services Administration investigator who revealed a wild agency spending spree said Monday he's investigating possible bribery and kickbacks, and has already recommended criminal charges to the Justice Department. The key figure in the scandal invoked his right to remain silent at the House hearing.
Inspector General Brian Miller made clear that he's not done investigating GSA current and former officials, following his lengthy report April 2 on an October 2010 Las Vegas conference that cost taxpayers $823,000.
The regional executive who hosted the Western Regions Conference, Jeffrey Neely, invoked his Fifth Amendment rights and his chair remained empty the rest of the House Oversight and Government Reform hearing. He could face a criminal investigation.
"We do have other ongoing investigations including all sorts of improprieties, including bribes, possibly kickbacks but I'd have to check on precisely kickbacks," Miller told the committee.
He added later, "We have recommended criminal charges."
Toward the end of the three-and-a-half hour hearing, GSA chief of staff Michael Robertson said he had informed the White House of the inspector general's preliminary findings last year. Robertson testified that he told a White House lawyer, Kim Harris, about the report shortly after May 2011 "when I became aware that the IG had briefed (then-GSA administrator Martha) Johnson."
After the hearing, Robertson said in a statement, "To clarify the point I made in my testimony today, I only mentioned in passing the existence of an IG investigation as I bumped into a White House staffer that I regularly worked with on GSA issues."
Committee members from both parties could barely restrain themselves as they sometimes shouted their outrage over the spending. They not only raged on about the overall figure, but at specific taxpayer expenditures for a mind-reader, over-priced commemorative coins, bicycles for a team-building exercise and trips by GSA employees and their family members to the Las Vegas strip.
Lawmakers said they couldn't understand why Johnson, the agency head who resigned after Miller's findings became public, waited for months to take action after receiving a preliminary report almost a year earlier. And demanded to know why Johnson granted Neely a $9,000 bonus after learning of the conference.
"I gave that $9,000 bonus because I was focused on performance and because I, the recommendation came from the buildings commissioner," Johnson said.
Johnson, who said she resigned to allow the GSA to fix its problems under new leadership, said she was "extremely aggrieved by the gall of a handful of people to misuse federal tax dollars, twist contracting rules and defile the great name of the General Services Administration."
She said she learned after taking office that the Western Regions Conference "had evolved into a raucous, extravagant, arrogant, self-congratulatory event."
Before she resigned, Johnson fired two top deputies. Since then, Neely and seven others were placed on administrative leave.
She was not the only GSA executive to apologize. David Foley, deputy commissioner of the Public Buildings Service, said he was sorry that he participated in an awards ceremony at the conference, which became a viral video on social media.
He made a joking reference at the ceremony to Rep. Eleanor Holmes Norton, the District of Columbia congressional delegate, and presented an award to a GSA staff member who made a rap video making fun of the conference spending.
Meanwhile, the GSA has ramped up its disciplinary review. Ten officials are now on administrative leave, two more than previously reported.
On Monday, the agency released letters to one fired GSA executive, Robert Peck, and two on administrative leave — Neely and Robert Shepard, a regional executive — demanding they pay back some of the taxpayers' money for parties held in their rooms at the Las Vegas conference.
The amounts were $922 for Shepard, $1,960 for Peck and $2,717 for Neely.
Previously, Neely had told investigators that the $2,717 party he threw in his Las Vegas hotel suite was an employee-awards event, according to a transcript of the interview.
"This is an award recognition ceremony ...." Neely told an internal investigator. "That's what this was. That's...not a Neely party right. I actually ... it was in a suite that wasn't even mine."
The investigator then confronted Neely with his email saying that he and his wife "are hosting a party in our loft room. There will be wine and beer and some munchies...." There was no mention of awards.
When Neely insisted again it was an awards event, the skeptical investigator told him, "You realize how this looks?"
"I get it that it looks funny," Neely said.