Suspended GSA commissioner created culture of silence on lavish spending

Tuesday - 4/17/2012, 1:19pm EDT

Highlights from the hearing

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A suspended General Services Administration executive created a culture of lavish spending — and fear among his employees who spoke up against him — according to testimony in a House Transportation and Infrastructure subcommittee hearing today.

GSA Region 9 Public Buildings Service Commissioner Jeff Neely was placed on administrative leave two weeks ago after the agency's inspector general released a report about a October 2010 GSA conference in Las Vegas that cost taxpayers $823,000. After the report's release, Administrator Martha Johnson resigned and fired PBS Commissioner Bob Peck and GSA adviser Stephen Leeds, and nine other GSA employees have been put on administrative leave.

Neely had directed conference planners to make the Las Vegas conference "over-the-top," according to the IG report. Among other expenses, the report found the agency spent $136,000 on pre-conference scouting trips and $146,000 on catered food.

Suspended Region 9 Public Buildings Service Commissioner Jeff Neely invoked his right to remain silent in Monday's House Oversight and Government Reform Committee. General Services Administration Inspector General Brian Miller on Tuesday testified Tuesday before a subcommittee of the House Transportation and Infrastructure Committee that GSA employees said Neely squashed any resistance to his decisions. (Video still from House Oversight Committee website)

The IG's office talked to a GSA employee who witnessed someone try to raise an objection to Neely and was "squashed like a bug," GSA Inspector General Brian Miller said during the hearing.

The objections to the excessive spending came from Deputy Administrator Susan Brita, who notified the IG's office of the conference a month after the conference occurred.

Today was the second of four congressional hearings this week on the GSA spending scandal. Neely did not appear at today's committee. On Monday, he pleaded the Fifth Amendment in a hearing before the House Oversight and Government Reform Committee.

The IG report also revealed the agency did not follow contracting regulations for conference procurements, such as violating small-business set-asides, failing to publish solicitations on the Federal Business Opportunities website and improperly disclosing bids to competing contractors.

Neely used a loophole in spending regulations that allowed food to be charged to federal funds if there was an awards ceremony.

"According to witnesses that we've interviewed, it was a running joke in Region 9 that in order to get food you had to give out awards," Miller said. "And many of these awards were silly awards. One of our witnesses characterized them as fake awards and jackass awards and things of that nature."

At the Las Vegas conference, GSA gave awards for theatrical performances, Miller said. "We do not consider that a proper award," he said. "The award has to be for contributions to the agency."

Peck faced harsh questioning from lawmakers at the hearing, particularly on his decision to recommend Neely for a $9,000 bonus last year, despite the agency's performance board recommendation of no bonus and after a preliminary report from the IG's office. Brita was head of the performance board that recommended no bonus.

"That is a culture within an agency that shows no matter what investigative report is going on, no matter what information or details we have, we're going to operate business as usual. I don't think you can sit there and blame everything on Mr. Neely," said Rep. Jeff Denham (R-Calif.), chairman of the subcommittee on public buildings, during his questioning of Peck.

Peck said he heard from senior management that Neely "didn't take it well if people debated with him on his decisions."

"On more than one occasion, I had to tell him that I heard that in his headquarters there were people who were reluctant to give him bad news because he didn't take it well," Peck said. He added he thought the complaints were related to "policy issues."

"I didn't know we were talking about issues of real government waste and integrity," Peck said.

Peck also defended his decision to invite people to his room at the Las Vegas conference for a "meet-and-greet" that ended up costing $1,960.

Peck said Tuesday he had planned on paying for beer, wine and chips out of his own pocket, but was surprised when additional food arrived. Peck said he was assured by a GSA employee that the food was part of the contract with the hotel.

The agency's new leadership has demanded the amount be repaid and Peck said he would do so.

"Mr. Peck, you know this. There's no free lunch," said Rep. Tim Walz (D-Minn.). "If it's part of the contract, the price was jacked up."

The Associated Press contributed to this story.

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