Lavish Las Vegas conference costs top GSA officials their jobs

This story has been updated.

Top officials of the General Services Administration left the agency Monday as the GSA inspector general’s office readied a “scathing” report on wasteful spending at a Las Vegas training conference in 2010.

As first reported by The Washington Post, Martha Johnson submitted her resignation, and Public Buildings Service Commissioner Robert Peck and senior counselor Stephen Leeds were terminated. Other managers were put on administrative leave.

The IG report will reveal that organizers spent $835,000 for a conference for 300 employees held at a luxury hotel, the Post said, including $147,000 in airfare and lodging for six planning trips. The conference tally also included $3,200 for a mind reader; $6,300 on commemorative coin set in velvet boxes; and $75,000 on a training exercise to build a bicycle.

White House Chief of Staff Jack Lew told the Post that President Obama was outraged by the “excessive spending, questionable dealings with contractors, and disregard for taxpayer dollars and called for all those responsible to be held fully accountable.”

In her resignation letter, Johnson wrote, “Reports of an internal conference in which taxpayer dollars were squandered led me to launch internal reviews, take disciplinary personnel action and institute tough new controls to ensure this incident is not repeated. In addition, I feel I must step aside as administrator so that the agency can move forward at this time with a fresh leadership team.”

GSA spokesman Greg Mecher issued a statement saying, “When it was brought to her attention that a potential misuse of funds may have occurred with regard to the Western Regions Conference, the GSA deputy administrator asked GSA's inspector general to look into the matter. The IG spent over a year conducting this inquiry. Having now received the IG’s report, GSA concurs with the IG's recommendations and is appalled by its findings.”

After confirming that Johnson’s resignation takes effect at the close of business Monday, Mecher added GSA will review potential further disciplinary action if warranted, implement reforms to its accounting procedures, and increase the contracting and conference oversight protocols. “The General Services Administration has made eliminating excessive spending and promoting efficiency … top priorities and is taking steps to ensure that nothing like this ever happens again,” he said.

Corrective actions include:

• Removing two senior political appointed members of staff;
• Placing four regional commissioners on administrative leave;
• Directing the GSA Office of Administrative Services to provide greater oversight and accountability for the agency’s administrative functions (including accelerating changes, already planned), to include oversight of contracting for all conference-related activities and budgets, and their alignment to GSA's mission, effective immediately;
• Requiring mandatory annual training for all employees regarding conference planning and attendance;
• Directing GSA's Public Buildings Service to cancel all future Western Regions Conferences;
• Reducing the PBS fiscal 2013 travel budgets for Regions 7, 8, 9 and 10, while shifting reporting and oversight of regional PBS budgets to the central office in Washington;
• Exploring every opportunity for funds recovery in this matter.

Dan Tangherlini, an assistant secretary in the Treasury Department and former city administrator for the District of Columbia, will take over for Johnson as acting administrator.

These events came at a time when the White House, for nearly a year, has been pursuing a Campaign to Cut Waste that applies governmentwide and is enforced by Cabinet secretaries. In September 2011, the Obama administration specifically ordered all federal agencies to review conference spending in the wake of a report on potentially excessive spending on a Justice Department event.

Johnson was sworn in as GSA’s 19th administrator on Feb. 5, 2010. She previously worked at Computer Sciences Corp. as vice president of culture and before that as GSA chief of staff and earlier as assistant deputy Commerce secretary. During her tenure, she focused on advancing telework; advancing mobile communications devices; sustainable purchasing; and increased use of GSA services by other agencies.

In what would become her final speech, Johnson on Thursday told a conference of agency and industry acquisition professionals: “Why us? Because we’re the expert shoppers. We’re the folks you want on your team when budgets are tight, you’re making purchases, and there’s no room for error. We can cut costs, drive bargains and deliver cast-iron value. It’s what we do, and we do it well.”

Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee, said the staff departures were appropriate, given the circumstances. “This was a stupid and infuriating waste of taxpayer dollars,” he said in a statement. “The people responsible for it should be held accountable.”

On the House side, Rep. Elijah Cummings, D-Md., ranking member of the Oversight and Government Reform Committee, said he has asked GSA’s inspector general for a briefing on the report.

Panel chairman Rep. Darrell Issa, R-Calif., said the committee will have questions for the IG. “After President Obama lectured the private sector about not wasting funds on Las Vegas conventions, it’s hypocritical that such a large agency with critical management responsibilities across government would hold this luxurious conference at the height of the recession and even spend thousands on custom made coins touting the stimulus,” Issa said in a statement.