GSA head Johnson resigns, two other officials fired in wake of 'over the top' conference spending

Monday - 4/2/2012, 6:12pm EDT

Federal News Radio Executive Editor Jason Miller discusses details from the IG Report

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Federal News Radio Executive Editor Jason Miller talks about what's next for GSA

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The head of the General Services Administration resigned from her post Monday, and two other officials were fired following an investigation into excessive spending at a 2010 training conference.

Martha Johnson, the GSA administrator, submitted her resignation Monday. Robert Peck, the commissioner of the Public Buildings Service, and Stephen Leeds, Johnson's senior counselor, were fired.

In addition, four regional commissioners have been placed on administrative leave, according to a GSA statement.

— Read Martha Johnson's resignation letter

— Read the IG report detailing excessive spending

The departures come on the heels of a new report from GSA's Office of the Inspector General, detailing profligate spending and inappropriate contracting practices at the Western Regions Conference held in Las Vegas in October 2010.

Dan Tangherlini, the Treasury Department's chief financial officer and the assistant secretary for management, will serve as the acting GSA administrator, a GSA spokesman confirmed to Federal News Radio on Monday.

Martha Johnson (GSA photo)

IG report faults 'over the top' spending

GSA spent a total of nearly $823,000 on the training conference, according to the IG report, which details "excessive, wasteful, and in some cases impermissible" spending and improper procurement practices.

The agency spent $130,000, alone, to plan the conference, including travel costs, catered meals and the cost of a pre-planned "dry run."

GSA spent more than $146,000 on catered food, including meals for semi-private parties held in individual hotel rooms.

Meal expenses exceeded per diem limits, the report noted.

Robert Peck (GSA photo)

GSA also spent about $6,300 on commemorative Recovery Act coins housed in velvet boxes and $75,000 on a bicycle-building training exercise.

The IG report faults an "over-the-top" philosophy toward spending that was cultivated by conference planners.

While federal regulations emphasize minimizing costs in conference planning, the evidence uncovered by the IG "showed the goal was not to minimize costs, but to be 'over the top.'"

GSA also failed to follow contracting regulations in many of the procurements associated with the conference, the report found. That includes violations of small-business set-asides, failing to publish solicitations on the Federal Business Opportunities website and improperly disclosing bids to competing contractors.

Stephen Leeds (GSA photo)

Johnson acknowledges 'misstep'

In her resignation letter, Johnson acknowledged the agency had made "a significant mis-step."

Johnson said when she learned of the conference at which "taxpayer dollars were squandered," she launched an internal review, took disciplinary action and instituted new controls to ensure it wouldn't happen again.

"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," Johnson wrote in the resignation letter.

The report has been a year in the making, after GSA Deputy Administrator Susan Brita asked the office to look into allegations of waste, fraud and abuse of taxpayer funds.

The IG report, among its slew of recommendations, said senior GSA officials should be held responsible for excessive conference spending.

According to the GSA spokesman, Johnson fired Peck and Leeds before offering her resignation. In addition, GSA has canceled all future Western Regions Conferences, will require mandatory annual training on conference planning and is "exploring every opportunity" to recover lost funds.

White House, lawmakers outraged

The evidence of excessive spending, first reported by The Washington Post, paints the worst possible picture of wasteful government spending.

In a statement, Jack Lew, the White House chief of staff, said President Barack Obama was "outraged" by the excessive spending, when he first learned of it last month.

"When the White House was informed of the inspector general's findings, we acted quickly to determine who was responsible for such a gross misuse of taxpayer dollars," Lew said. The President "called for all those responsible to be held fully accountable given that these actions were irresponsible and entirely inconsistent with the expectations that he has set as President."

Similarly, lawmakers from both sides of the aisle announced their displeasure

"This report reveals what appears to be a gross abuse of taxpayer dollars and a breach of public trust," said Rep. Elijah Cummings (D-Md.), the ranking member of the House Oversight and Government Reform Committee.

The chairman of the committee, Darrell Issa (R-Calif.), said the agency's behavior is hypocritical because Obama once chided private companies about wasting money on Las Vegas conventions. The IGs findings are "indicative of the waste that exists in a bloated federal government," Issa added.

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