House for Sale

rivate enterprise, in the form of Fernando Bernardes, is establishing a foothold in the House of Representatives. A new regime is managing institutional services for the House these days, and he is happy to be a part of it.

"It's a wonderful country, where I can do this," Bernardes says, smiling broadly and gesturing with a polishing cloth toward his place of business, a three-seater shoeshine stand in a corridor connecting the Longworth and Cannon House Office Buildings. It is one of two stands Bernardes operates on the premises. The other is in the Rayburn House Office Building near the subway that runs under Independence Avenue to the Capitol.

Bernardes is one of a growing number of independent contractors offering services on Capitol Hill that were once provided exclusively by salaried federal employees. The new entrepreneurs are byproducts of the Republican revolution that brought new leadership to the 104th Congress-and of a series of scandals in the early 1990s.

Bernardes is aware that he may be viewed as a pioneering symbol of the free market in an institution where, until recently, the kind of work he does was paid largely from public funds. But he doesn't dwell on the poster-boy role. "I just want my business to be successful," he says.

"Oh, I think he'll do well," volunteers a customer whose boots are being buffed by a young assistant working under Bernardes' watchful eye. "The business is here. This shine costs $3.50, about a dollar more than it used to, but it's more convenient. Before, I would have to walk over to Rayburn from my office in Cannon, and sometimes the shoeshine guy would be there and sometimes he wouldn't. Now all I do is come downstairs."

Bernardes came to the United States from Brazil and worked in Washington area hotels, mostly as a bellman, for l6 years before starting his own business, Kiko's Shoe Shine Service, about five years ago. "Kiko is my son's nickname," he explains. Bernardes owns other locations around town, but this is his newest venture, started under a contract with the House last fall. Before then, professional in-House shoe shining was done by an employee of the institution who had a one-man stand in the Rayburn Building barber shop.

The contract with Kiko's was negotiated by Scot M. Faulkner, chief administrative officer (CAO) for the House. "Bernardes is one of our most enthusiastic vendors," Faulkner says, "all of whom seem to be doing well."

House leaders certainly hope so. In an effort to put the recent history of scandal in the House bank and post office behind them, Members of Congress have ordered a thorough overhaul of administrative operations in their own place of residence. Much of that agenda centers around privatizing functions.

The New Vendors

Besides the shoeshiners, other new House vendors include the Marriott Corp., which provides a catering service and runs a dining room, three cafeterias and three carryout eateries; the U.S. Postal Service, which took over mail handling from an in-House unit; and two barbers, Nurney Mason and Joseph Quattrone, who work in the Rayburn shop. Both were employees of the House for years, and when the decision was made to contract out the barber shops, they decided to stay on as subcontractors to Gino Morena, a Californian who runs such shops in other federal institutions.

Mason and Quattrone charge $10 per haircut; the money goes to Morena, who returns to them 63 percent of their take. When they were House employees, the fees were the same, and the money went to the House, which paid them modest salaries plus 30 percent commissions.

The contractors use House space free, and keep the profits from sales. Contracts usually are written for two years and may be renewed on an annual basis. The vendor arrangements, Faulkner's staff points out, enable the House to save some of the money it used to pay in salaries and employee benefits. Indeed, says Mason, the big difference for the barbers is not so much income, but loss of relatively generous government pension and health benefits.

Faulkner, the first House CAO, is part of a management team brought in by leaders of the House's new majority a year ago. Other members of the team are House Clerk Robin Carle-the first woman to become an officer of the House-and Sergeant-at-Arms Wilson (Bill) Livingood.

The reorganization of the House began in the early 1990s and picked up speed when control of the institution changed hands after the 1994 Republican takeover of Congress. As part of the restructuring, the House Doorkeeper's job was abolished and its functions absorbed by the Clerk and the CAO. Also gone are the House-run post office, a bank (which served largely as a check-cashing service for Members), separate printing shops for the majority and minority parties and a folding room, where Members could have documents processed for distribution.

The departure of in-House printers and the folding room operation means that individual Members now must seek outside specialists to prepare their many papers and publications, thus multiplying significantly the number of independent contractors that will be working the halls of the House in the future.

The new vendor system "may not save the House a ton of money," observes a veteran staffer, "because, for example, contractors get free space. And the Members have no idea yet how much more it will cost them out of their office allowances to go outside to private contractors for folding room services. But you have to understand that major changes in the way we do business here were not just savings-driven. They were also prompted by scandal."

Out With the Old Order

In the wake of reports in the early 1990s that Members were bouncing checks at the House bank and improperly using the post office, House leaders, on a bipartisan basis, decided to go outside the body for management leadership. But their initial efforts were not fully successful.

Leonard P. Wishart III, a retired Army general, was hired as director of non-legislative and financial services, but he resigned after about a year. Wishart's successor, Randall Medlock, another ex-Army officer, left after an even shorter period. When the 104th Congress was organized, the old system of management was scrapped, a $3.2 million Price Waterhouse audit of House financial operations was ordered, the CAO position was created, and a tighter management structure for non-legislative activity was established.

In the audit, Price Waterhouse focused on money-handling procedures and practices over a 15-month period from October 1993 through December 1994. In a voluminous report released last July, the accounting firm said the House was using "archaic accounting policies, methods, practices and systems." More specifically, the report said, Members overspent their 1994 allowances by about $14 million, paid nearly $3 million for outdated computer equipment, spent $1.2 million on duplicated items, and overpaid employee salaries and benefits to the tune of $76,000.

In all, Price Waterhouse made nearly 300 recommendations for improvements, and Faulkner says he and his staff are making progress in implementing them. "We're following their suggestions by turning to vendors for many services," he points out, "and we are taking steps to eliminate wasteful operations. A recent good example was emptying out an old warehouse."

Years ago, the House leased a huge building which had been erected by the now-defunct Washington Star newspaper in Southeast Washington. "It was crammed with rotten old furniture that had been there for decades," Faulkner says. "We opted not to just transfer that obsolete stuff to another place but to get out of the storage business. We did not renew the lease, and we got rid of the contents." According to Price Waterhouse, that action alone saved the House at least $170,000 a year. There is no official estimate of overall savings from reforms undertaken so far.

Faulkner's Vision

A one-time congressional staffer (for former Rep. John Ashbrook, an Ohio Republican), Faulkner held a variety of management positions for the federal government (including a stint as a Peace Corps country director in Malawi) before joining Philip Crosby Associates, a management consulting firm, in 1990. He's an advocate of Total Quality Management (TQM), the philosophy of continuous improvement of business practices. The well-known acronym, says Faulkner, has been misapplied and misinterpreted. "It really is a common-sense way of conducting one's business," he says. "That's the way I see it, and use it."

Faulkner's vision is that one day he'll be directing an "ultimate conference center," where Members of Congress can make one telephone call and get a multiplicity of services promptly and painlessly. "They should be able, with that one call, to set up a meeting, a press conference, whatever. We are working toward a trouble-free infrastructure, a pleasant, cost-effective place for Members and their constituents, and for other public visitors. And in order to achieve those goals, we have to make major changes in the way we do business."

Some of the changes Faulkner is making, as well as his management style, have drawn criticism from both Democratic and Republican Members of Congress. Rep. Steny Hoyer, D-Md., former chairman of the House Democratic Caucus, charged Faulkner with "politicizing" his office by hiring assistants who had been active in Republican politics. Rep. William Thomas, chairman of the House Oversight (formerly Administration) Committee, labeled Faulkner "unprofessional" for sending committee members a memo alleging widespread evidence of drug-related abuses in the now-defunct folding room.

Faulkner says he does not relish the criticism but considers it understandable in light of rapid revisions which have been made in the tradition-laden institution. "Look," says one of his associates, "we had the banking and post office scandals, then Price Waterhouse did its audit, and everybody wanted the mess cleaned up. Doing the cleanup is not going to make everybody happy."

Clerk's Work

Robin Carle, the new House Clerk, agrees. "Change," she says, "especially the kind we are experiencing in the House, is difficult for everyone involved. But we simply have to make improvements, and we have to do it with fewer people and lower costs to the taxpayers."

The Clerk's office reports there is no exact official comparison of the number of House employees now and prior to reorganization, but unofficial estimates indicate that aggregate personnel levels have dropped only slightly. Committee staffs, though, have been substantially cut back and numerous positions, such as that of the Doorkeeper and staff, have been eliminated and their functions assigned to the Clerk.

To the dismay of some congressional Democrats, Carle has moved to downsize her own office. In mid-December, The Hill, a Capitol Hill newspaper, reported that at least 10 employees of the Clerk's office had been abruptly fired. Rep. James Moran, D-Va., took to the House floor to denounce the move. "It reflects on all of the Members of this body if we fire our own employees just before Christmas time," he said.

Carle, who was chief of staff for the Department of Health and Human Services in the Bush Administration, directed campaign operations for the Republican National Committee before being tapped for the Clerk's post. She has a much smaller domain than Faulkner's, but her management problems still loom large. "Our office has added responsibilities, but not personnel to deal with them," she says.

She also is considering taking the vendor route in dealing with the high costs of transcribing and compiling official proceedings on the House floor and in committees. As of last fall, she was still supervising more than 45 transcribers, reporters, editors and clerks. "We would need to keep a corps of specialists permanently on the staff," Carle says, "but our workload is such that we are thinking about having more of this work performed under contract."

The House document room, where bills and resolutions are filed, was part of the now-defunct Doorkeeper's Office. It is now under Carle's direction, and is being redesigned in an effort to facilitate and expedite public access to information from the House. The school for House pages, plus a variety of other services for Members, especially on the House floor, also were under the Doorkeeper's supervision and are now among Carle's responsibilities.

Most of the Price Waterhouse recommendations for improvement in House operations were written for the chief administrative officer, but a few were directed at the Clerk's office. The auditors, for example, expressed concern that "erroneous information may be released on the Internet due to the lack of procedures for dissemination." Carle says that problem is being addressed, along with suggestions for lowering the costs of maintaining and distributing House documents.

The Sergeant

Price Waterhouse also had several recommendations for the third member of the new House management team-Bill Livingood, the sergeant at arms, whose principal responsibility is overall supervision of House security measures and providers, mainly the Capitol Police. The auditors suggested that nearly $1 million could be saved annually if security guards assigned to the House Chamber were paid on an hourly basis or reassigned to other duties when the House is not in session, and if personnel guarded parking lots and garages in accordance with peak and non-peak activity levels. A spokesperson for the sergeant at arms' office reports that all the Price Waterhouse ideas are being considered.

Livingood began working for the Secret Service in 1961 and was executive assistant to its director when he was appointed sergeant at arms. Although his bailiwick is substantially different from those of Faulkner or Carle, he says he likes the close working relationship he has with his two colleagues and thinks it is producing better results for each of them.

"It takes teamwork," Faulkner points out. "The three of us meet once each week to talk about issues of mutual concern, about matters like the flow of paper, and lines of communication in general. It's a good way to head off problems and provide a sense of direction. We don't have anything directly to do with what takes place on the floor, but we are responsible for making sure that the business of legislation can be carried on in a well-run House."