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S. HRG. 112–967 

OVERSIGHT HEARING ON THE 

GENERAL SERVICES ADMINISTRATION (GSA) 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

APRIL 18, 2012 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.fdsys.gov 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

JAMES M. INHOFE, Oklahoma 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

JEFF SESSIONS, Alabama 

MIKE CRAPO, Idaho 

LAMAR ALEXANDER, Tennessee 

MIKE JOHANNS, Nebraska 

JOHN BOOZMAN, Arkansas 

BETTINA POIRIER, Majority Staff Director 

RUTH VAN MARK, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

APRIL 18, 2012 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 1 

Heller, Hon. Dean, U.S. Senator from the State of Nevada, prepared statement ...................................................................................................................... 1 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 7 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 9 

Johanns, Hon. Mike, U.S. Senator from the State of Nebraska .......................... 15 

Baucus, Hon. Max, U.S. Senator from the State of Montana .............................. 16 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 16 

Boozman, Hon. John, U.S. Senator from the State of Arkansas ......................... 17 

WITNESSES 

Miller, Hon. Brian D., Inspector General, U.S. General Services Administration ........................................................................................................................ 18

Prepared statement .......................................................................................... 19 

Tangherlini, Daniel, Acting Administrator, U.S. General Services Administration ........................................................................................................................ 46

Prepared statement .......................................................................................... 48 

(1) 

OVERSIGHT HEARING ON THE GENERAL 

SERVICES ADMINISTRATION (GSA) 

WEDNESDAY, APRIL 18, 2012 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, Washington, DC. 

The full Committee met, pursuant to notice, at 10 a.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (Chairman of the full Committee) presiding. 

Present: Senators Boxer, Inhofe, Cardin, Baucus, Carper, Udall, 

Johanns, Barrasso, and Boozman. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. The Committee will come to order. Thank you to 

the press. 

First, before I start my statement, I want to enter into the record 

a letter that I received from Majority Leader Harry Reid that 

makes clear that well run and cost effective conferences are productive and provide an important economic boost to our communities. 

So I ask unanimous consent to enter Senator Reid’s letter into the 

record. 

[The referenced information was not received at time of print.] 

Senator BOXER. Do you have a similar letter from Senator Heller? 

Senator INHOFE. Yes, I do. I ask unanimous consent that Senator 

Heller’s statement be put into the record. 

Senator BOXER. Absolutely. 

[The prepared statement of Senator Heller follows:] 

STATEMENT OF HON. DEAN HELLER, 

U.S. SENATOR FROM THE STATE OF NEVADA

Thank you, Madam Chairman and Ranking Member Inhofe. I appreciate the opportunity to address this Committee today and submit a statement for the record 

regarding the Inspector General of the General Services Administration’s (GSA’s) report on the 2010 Western Regions Conference (WRC). 

Like many taxpayers I was shocked and disappointed to read the Inspector General’s report that found expenditures at this conference were excessive, wasteful, 

and in total ignorance of Federal procurement laws and internal GSA policy on conference spending. 

The Committee today is right to look into the GSA’s practices and provide corrective oversight to ensure that hard earned taxpayer dollars are spent wisely by this 

Administration. 

I want to be clear, this is not an issue about location. This is the result of poor 

decisionmaking and leadership by the administrator of the GSA. 

Las Vegas is one of the greatest locations in the world for a conference, a meeting, 

or vacation. With over 148,000 hotel rooms and 10.5 million square feet of meeting 

2 

and exhibit space citywide, it is ideally suited to host companies and organizations 

large and small. 

In fact, this past January Las Vegas hosted the Consumer Electronic Show which 

had more people attend than the Iowa Caucuses. 

I fully agree that it was inappropriate for the GSA to waste taxpayer dollars, but 

it is not inappropriate to come to Las Vegas for conventions and meetings. The actions of the GSA should not reflect negatively on Las Vegas, and I am asking all 

of my colleagues to be mindful of that as you conduct your investigation. 

The viability of the economy in Nevada is dependent upon the volume of visitors 

to our State. Last year nearly 39 million visitors came to Las Vegas alone. These 

visitors come because Las Vegas continues its reign as the No. 1 trade show and 

convention destination in North America. Las Vegas hosts thousands of meetings 

and conventions annually and generates billions in revenue. 

This translates into jobs. In Nevada, having a strong tourism industry means 

more jobs in my State. Las Vegas, Henderson, Lake Tahoe, and Reno have long been 

favorite recreation destinations for millions of visitors both domestically and more 

increasingly internationally. 

The entire southern Nevada economy is heavily dependent on the hotel, gaming, 

and convention industry, which employs over one-quarter of the region’s labor force. 

Plain and simple, tourism is the lifeblood for businesses and job creation in Nevada. 

Right now Nevada leads the Nation in unemployment. Job creation is and continues to be my top priority. 

It is no secret that politicians from Washington, DC, and this Administration have 

had a negative impact on the Las Vegas economy due to their words spoken publicly. For example, in 2009 attendance to conventions and meetings in Las Vegas 

fell by 13.6 percent. The following year attendance fell by another 7.2 percent. In 

total from 2009 to 2010 Las Vegas lost 1.4 million conventions attendees. 

While I recognize it is unfair to blame the total decline on a few ill advised lines 

in a speech, there is no doubt that spoken words by politicians clearly have had an 

impact on the Las Vegas economy. 

Las Vegas and the Great State of Nevada should not be political targets because 

of GSA’s misconduct. Las Vegas is an excellent destination for conferences, and I 

am proud of my State’s ability to entertain and accommodate businesses, organizations, and individuals from all over the world. 

Again, while several congressional committees investigate this issue I would respectfully advise my colleagues that it was not the location that caused the misuse 

of taxpayer funds. The convention services my State offers are the best in the world, 

and no town in Nevada should be singled out due to the poor judgment by the GSA. 

It is my hope that all of my colleagues will focus on the misconduct of the GSA 

and push for new initiatives that spur growth in the tourism industry instead of 

blaming Nevada for the mistakes of incompetent Government bureaucrats. 

Thank you, Madam Chairman. 

Senator BOXER. I am going to ask that we each have 7 minutes 

for our opening statement. 

The latest misconduct at the GSA makes me cringe, cringe for 

the taxpayers who expect every agency in their Government to fulfill their mission with integrity. And it makes me cringe for the 

good people at GSA who work so hard every day and have been humiliated by a few bad actors. 

To those who betrayed the public trust, let me be clear: the party 

is over. It is over because of GSA Inspector General Brian Miller, 

who is a bi-partisan appointee of President George W. Bush and 

President Barack Obama. And the party is over because of GSA 

Deputy Administrator Susan Brita, an Obama appointee who blew 

the whistle and took this matter to the Inspector General. And the 

party is over because the new Acting Administrator of GSA, Mr. 

Daniel Tangherlini, is a no-nonsense leader from the U.S. Department of the Treasury who aims to clean up this mess. 

This is not the first episode of misconduct at the GSA. The Carter administration uncovered one in 1978 and 1979, when a nationwide investigation into longstanding corruption resulted in prosecutions for bribery, for fraud, and protections for whistleblowers in 

3 

the agency. Then there was more misconduct during the Bush administration. The first occurred when the chief of staff to the GSA 

Administrator traveled with Jack Abramoff to Scotland, even 

though Mr. Abramoff had business before the GSA. In 2011 this 

chief of staff went to prison. 

In 2006 the Bush-appointed GSA Administrator steered a contract to a friend. And in 2007 she organized a political call with 30 

appointees to ‘‘help her friends win their elections.’’ That violated 

the Hatch Act. The Administrator repeatedly clashed with the Inspector General, this Inspector General, in one report comparing 

his enforcement efforts to ‘‘terrorism.’’ She resigned in 2008. 

And now here we go again in 2012, this time involving what 

clearly looks like waste, fraud, abuse, and possible criminal violations. The most recent example of misconduct involves a few individuals who sought personal gain and exhibited scorn toward the 

public and exhibited scorn toward our President. 

There must be justice and restitution for this. And those who are 

responsible for this outrageous conduct and who violated the public 

trust must be held accountable. 

The GSA Administrator resigned, and she should have. Two of 

her aides were fired, and they should have been. Others are on administrative leave, awaiting further action. The Acting Administrator and the IG at GSA, who we are very pleased to have before 

us today, are working closely together to ensure that anyone with 

more information comes forward; they have set up a hotline for 

that, and they have sent out the word. 

Checks and balances on the regional offices have got to be put 

in place, and many have already. Many conferences, in my understanding, have been stopped or reduced in scope. And GSA estimates that nearly $1 million has been saved by the actions so far. 

Regional financial offices must now report to the Chief Financial 

Officer. Awards programs have been shut down, and reimbursements are being demanded from specific employees. The outrageous 

behavior of a few irresponsible, unethical, and perhaps law breaking individuals are overshadowing GSA’s achievements following 

President Obama’s cost saving directives, focused on energy efficiency, reduced computing costs, and disposal of unneeded Federal 

property. 

GSA offers critical services to all Federal agencies. But it is time 

to stop this series of failings that have occurred over four decades 

and over three Administrations. It is time to send the clearest of 

signals that this type of conduct and this kind of betrayal of the 

public trust will not be tolerated. 

Anyone in any agency who puts their own interests above the 

country’s interests will suffer the consequences. I really want to 

recognize the efforts to shine the light on the misconduct that took 

place at GSA. Mr. Miller, Mr. Tangherlini, thank you for taking 

Deputy Administrator Susan Brita’s concern seriously and following through on your public trust. This Committee will support 

you and encourage you to clean house at the GSA. 

And before I yield to my friend and colleague, let me put into the 

record an addendum that the Inspector General, Brian Miller, gave 

us, both sides of the aisle, today. But he didn’t have the time to 

get it into his testimony. It goes through the various steps that he 

4 

believes should be taken at the GSA. The first one is centralizing 

the program and budget management. The second is centralizing 

agency information management. 

The third is what he calls getting back to basics. GSA needs to 

refocus on its core mission, procurement and building operations. 

He said he found that many agency contracting personnel didn’t 

understand fiscal law or the Federal travel regulations or were unaware of the existence of agency policies that directly governed 

their daily work. This is unacceptable, he writes, and I would 

agree. 

Then he said, get out of the matrix. As the former GSA Administrator testified, GSA employee supervision is not presently linear, 

it is a matrix. Because many high level personnel report to two supervisors. Each supervisor can deflect supervisory responsibility 

onto the other, or claim to. And he says the matrix is really a sieve. 

And then he talks about requiring procurement accountability. 

And he goes into the fact that the agency needs to make sure 

that everything that is done has accountability attached to it. I just 

want to thank the IG for this. It just shows what I think is so important about this hearing, and when Senator Inhofe asked me to 

hold it, what I was concerned about was that we would only do a 

look-back. We need to do a look-back and have justice served. But 

we need to look forward. 

So I am very happy that we have this opportunity to have you 

here, so that we can talk about (A), how we hold people accountable and get to the bottom of the mess over there, but (B), how we 

move forward to make sure that we don’t have a repeat of this 

nightmare that has now occurred over so many decades and so 

many Administrations. 

I want to thank the two of you for being here today. 

Is Susan here, Susan Brita? Could you stand? I just wanted to 

say—I personally am going to ask you to stand. I want to thank 

you so much that you had the courage to step out in what was a 

very difficult situation. Thank you. 

Senator Inhofe. 

[The referenced information follows:] 

5 


25026.001
6 


25026.002
7 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. You had mentioned a comment made by Senator Reid. Let me just elaborate a 

little bit more on that. 

I was surprised at people, when they say the fact that it was 

held in Las Vegas would have something to do with it; we are dealing with corrupt people here, Madam Chairman. And what happened in Las Vegas would just as likely happen if it were held in 

Chicago or New York or any place else. 

Senator BOXER. Right. 

Senator INHOFE. So I think it is totally unfair for people to somehow draw a line there. 

I do thank you for holding the hearing. I have had a little history 

with this Committee. Before I came to the Senate in 1994, I spent 

8 years on the committee over in the House. And it happened that 

we were the minority, but I was the ranking member on the GSA 

subcommittee. 

And when you look at the overwhelming stuff they deal with, it 

is, if there is anyone who has a propensity to do something dishonest, that is where they ought to be. They deal with huge numbers. I have always been concerned about that, and there is a long 

history of this happening. 

But I think this serious waste and abuse of the taxpayers’ 

money, as well as possible fraud, and I understand the Office of the 

Inspector General, and I applaud the work that Brian Miller has 

done on this. It hasn’t been easy; I know it has taken an awful lot 

of time. After the release of the IG report on April 3rd, I sent a 

letter to Chairman Boxer requesting that the Committee hold a 

hearing to look at the IG’s findings. I also requested that both IG 

Brian Miller testify along with the Acting Administrator. So I want 

to thank you, Madam Chairman, for doing that. 

In a way, this is not going to be—if there are any media here 

looking for what they saw yesterday, it ain’t going to happen here. 

We have the two good guys here. 

Senator BOXER. Right. 

Senator INHOFE. So we are not going to be accusing anybody; we 

are just wanting to find out where we can go from here. I think 

it was articulated very well by the Chairman. 

Of course, Mr. Tangherlini, you are kind of in a position where 

you are going to have to do some pretty uncomfortable things. But 

I know a little bit about you, and I think we have the right guy 

doing them. 

The report describes a number of disturbing findings from the investigation. Some of the highlights were the GSA spending on the 

conference planning was excessive, wasteful, and in some cases impermissible. Travel expenses for the conference totaling over 

$100,000, just not believable. Catering costs, $30,000. The GSA 

failed to follow contracting regulations in many of the procurement 

associated with the WRC and wasted taxpayers’ dollars. The GSA 

incurred excessive expenses for food, $146,000 on catered food, 

$5,600 on semi-private catered in-room parties. I mean, it goes on 

and on. 

8 

I think that I do want to have the whole statement, this has already been aired throughout the media. It is kind of interesting, 

this morning, Madam Chairman, I was on the 7 o’clock CNN, it 

was supposed to be on this subject. And we went through about 12- 

minute interview, they never even mentioned this. So I think people are getting a little tired of it already. Nonetheless, it is real, 

it is a problem; we are going to have to deal with it. 

Since the release of the report, the GSA Administrator, Martha 

Jackson, has resigned, and the head of the Public Buildings Service 

and the Administrator’s top advisor were fired. Further, there are 

10 career employees who have been placed on administrative leave. 

These dismissals highlight the seriousness of the findings of the IG 

report. 

I want to thank our counterparts in the House for their own responsible oversight, and again, thank the Chair for beginning our 

own oversight. And by the way, on the oversight, a lot of people, 

somebody was asking this morning on a radio show or something, 

why are you doing this? It is our constitutional duty. We have oversight responsibility. There is a reason that both the House and the 

Senate do, because the House and the Senate are often coming 

from different poles. It is something that we have to do; there is 

just not a choice. 

I say beginning, because I believe that this goes beyond our onetime event. I am concerned that this type of waste has become an 

embedded part of the culture of the GSA. The conference occurred 

during a recession and after the President’s executive order for an 

‘‘efficient, effective and accountable Government’’ and calls for 

elimination of waste. One can only wonder what kind of wasteful 

spending would be incurred in a better economy. 

As a Committee with oversight responsibilities over GSA and the 

Public Buildings Service, today I hope we can find out how this 

happened and examine the safeguards that GSA has put in place 

to prevent this from happening again. It would be prudent to continue oversight hearings in the future to ensure this culture of 

wasteful spending has come to an end. We have an opportunity to 

restore the public’s trust. 

And I think this goes beyond this. I remember when we were the 

majority, the Republicans were the majority, and I happened to be 

the Chair of the Subcommittee on Nuclear. They had not had an 

oversight hearing in 12 years. And they actually welcomed it. I 

don’t think that any bureaucracy should go without oversight hearings. And I am going to recommend that we expand the number, 

I have not made a request for them, but I think this will perhaps 

put us in a position of where we will do that. 

So I thank the Chair for holding the hearing and look forward 

to hearing from our excellent witnesses. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

Thank you, Madam Chairman, for calling this oversight hearing on GSA’s Public 

Buildings Service 2010 Western Regions Conference. The IG report, released on 

April 2nd, highlights serious waste and abuse of taxpayer money as well as possible 

fraud. I understand that the Office of Inspector General received information on the 

9 

possible misuse of taxpayer money from a GSA employee, and I commend this staffer for stepping forward. 

After the release of the IG report, I sent a letter to the Chair requesting that the 

Committee hold a hearing to look into the IG’s findings. I also requested that the 

IG, Brian Miller, testify. So, I am pleased that you agreed to have this hearing and 

that Mr. Miller and the new Acting Administrator of GSA, Dan Tangherlini, are 

joining us today. 

The report describes a number of disturbing findings from the investigation. Some 

of the highlights are: 

• GSA spending on conference planning was excessive, wasteful, and in some 

cases impermissible 

–Travel expenses for conference planning totaled $100,405.37, and catering costs 

totaled $30,000 

• GSA failed to follow contracting regulations in many of the procurements associated with the WRC and wasted taxpayer dollars 

• GSA incurred excessive and impermissible costs for food 

–$146,537.05 on catered food and beverages (including $5,600 for three semi-private catered in-room parties and $44 per person daily breakfasts) 

–$30,207.60, roughly $95 per person, for the closing reception and dinner 

• GSA incurred impermissible and questionable miscellaneous expenses 

–Mementos for attendees, purchases of clothing for GSA employees, and tuxedo 

rentals 

• GSA’s approach to the conference indicates that minimizing expenses was not 

a goal 

–The PBS Region 9 Commissioner/Acting Regional Administrator instructed 

those planning the conference to make it ‘‘over the top’’ and to make it bigger and 

better than previous conferences. Several suggestions to minimize expenses were ignored 

Since the release of the report, the GSA Administrator resigned, and the head of 

the Public Buildings Service and the Administrator’s top advisor were fired. Further, 10 career employees have been placed on administrative leave. These dismissals highlight the seriousness of the findings in the IG report. I want to thank our 

counterparts on the House side for their own responsible oversight and again thank 

the Chair for beginning our own oversight. I say beginning because I believe that 

this goes beyond a one-time event. I am concerned that this type of waste has become an imbedded part of the culture at GSA. This conference occurred during a 

recession and after the President’s Executive Order calling for an ‘‘Efficient, Effective, and Accountable Government’’ and calls for eliminating waste and enhancing 

transparency. One can only wonder what kind of wasteful spending would be occurring in a better economy. It is time to get at the root of these spending problems. 

While I appreciate the IG and Acting Administrator joining us today, it would be 

helpful if we could hear from some of those that were directly involved and find out 

how things have changed. 

As the Committee with oversight responsibilities over GSA and the Public Buildings Service, today I hope we can find out how this happened and examine the safeguards GSA has put in place to prevent this from happening again. It would be prudent to continue oversight hearings in the future to ensure this culture of wasteful 

spending has come to an end. We have an opportunity to restore the public’s trust 

and make certain that Federal agencies are acting in the best interest of the American people. 

Again, I thank the Chair for holding this hearing and look forward to hearing 

from our witnesses. 

Senator BOXER. Thank you very much. 

Senator Cardin, followed by Senator Johanns, Senator Baucus; 

each will have 7 minutes. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Madam Chairman, first of all, thank you very 

much for holding this hearing, and I thank the Ranking Member. 

This is very important. 

We all were shocked by the Inspector General’s report revealing 

the shocking and shameful extravagant spending that the GSA 

Western Regional Service Division engaged in in 2010. I think it 

10 

is important to understand that this event is indicative of a culture 

of this agency that goes back many years. The Inspector General 

Miller and the Deputy Administrator that brought this problem to 

his attention should be commended for investigating this event, 

bringing this problem into the public eye and calling for reforms 

within the agency. 

What is most important now is that Congress work with the 

agency to advance smart and thoughtful reforms. The fact is, GSA 

is vitally important to the function of the Federal Government. 

GSA makes sure that the Federal Government pays its rent on 

time, keeps the lights on in public buildings, manages Federal priorities, makes sure our Federal workers—like the scientists at FDA 

and social workers at VA, who are working hard for the public 

good—have the tools and resources they need to get the job done. 

That said, I often do not agree with GSA’s approach to its business. In April of last year I held a GSA oversight hearing, the first 

GSA oversight hearing this Committee had had in years, to examine GSA’s management and service of Federal courthouses. I have 

been in meetings with GSA public officials to discuss prospective 

locations for Federal facilities where GSA unabashedly refers to the 

agency in which they are seeking the space for as the client. And 

they view themselves as the broker, much the way a private real 

estate firm hired to find office space for a private sector company 

would. This private sector perception pervades this public sector 

agency. I think it may have had its roots in GSA’s problems. 

Many colleagues often call for the Government to run more like 

a business. GSA takes pride in the incorporation of private sector 

sensibilities and practices into its work. There are some cues Government can take from the private sector in its operations and 

management that are valuable. 

I would argue that GSA, in part, because of its function as a real 

estate and fleet manager and contracting agent is so similar to 

businesses in the private sector, has led to a total blurring of the 

line between what actions are appropriate for a public sector agency to engage in. Reforms that return perspective and accountability 

to GSA are in order. GSA’s clients are the American people, not the 

Social Security Administration or the FDA or the National Science 

Foundation. And the American people are not shareholders; they 

are taxpayers. The extent of the wastefulness of taxpayers’ dollars 

on the Western Regional Conference is shocking. Perhaps it is reflective of an agency tied so closely to the real estate and property 

management industry, having hired many business professionals 

along with their business practices from the private sector that the 

agency thinks it is perfectly acceptable to hold a convention similar 

to those in the private sector. 

Suzy Khimm, an economic policy reporter for the Washington 

Post, published an interesting commentary piece for the Post on 

April 14th. Madam Chairman, I will submit the entire article for 

the record. 

But let me just quote one sentence from her article: ‘‘The real 

aim of contracting services is ultimately neither to make money nor 

to spend it, but to achieve a greater good.’’ 

I hope this hearing will advance that greater good for our Nation 

and for our taxpayers. 

11 

[The referenced information follows:] 


25026.003
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25026.004
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25026.005
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[The prepared statement of Senator Cardin follows:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND

Thank you, Madam Chairman, for holding this hearing. The need for a thoughtful 

explanation of the investigation into GSA’s conduct and spending in the Western 

Region is absolutely necessary as Congress weighs appropriate actions to take to reform the agency. 

The findings of the Inspector General’s report reveal the shocking and shameful 

extraneous spending that GSA’s Western Regional Service divisions engaged in to 

hold its 2010 Western Regional Conference in Las Vegas, Nevada. 

The subversion of procedure as a means of inflating costs in order to provide a 

lavish experience for participants, as evidenced by the exorbitant cost of line items 

in the budget, is offensive. 

I think it is important to understand that this event is indicative of the culture 

of this agency that goes back many years. 

Inspector General Miller and the Deputy Administrator that brought this problem 

to his attention should be commended for investigating this event, bringing this 

problem into the public eye, and calling for reforms within the agency. 

What’s most important now is that Congress work with the agency to advance 

smart and thoughtful reforms and not just browbeat the administration responsible 

for uncovering a problem within one of its agencies. 

The fact is GSA is vitally important to the function of the Federal Government. 

GSA makes sure the Federal Government pays its rents on time, keeps the lights 

on in public buildings, manages Federal properties, makes sure our Federal workers—like the scientists at the FDA and social workers at VA who are working hard 

for the public good—have the tools and resources they need to do their jobs. 

That said, I often do not agree with the GSA’s approach to its business. In April 

of last year I held a GSA oversight hearing, the first GSA oversight hearing this 

Committee had held in years, to examine GSA’s management and service of Federal 

courthouses. 

I’ve been in meetings with GSA public buildings officials to discuss prospective 

locations for Federal facilities where GSA unabashedly refers to the agency in which 

they are seeking space for as the ‘‘client,’’ and they view themselves as the broker, 

much the way a private real estate firm hired to find office space for a private sector 

company would. This private sector perception pervades this public sector agency, 

and I think it may be at the root of GSA’s problems. 

Many colleagues often call for Government to run more like a business. GSA takes 

pride in the incorporation of private sector sensibilities and business practices into 

its work, and there are some cues Government can take from the private sector in 

its operations and management that are valuable. 

I would argue that GSA, in part because its function as a real estate and fleet 

manager and contracting agent is so similar to businesses in the private sector, has 

led to a total blurring of the lines between what actions are appropriate for a public 

sector agency to engage in. 

Reforms that return some perspective and accountability to GSA are in order. 

GSA’s clients are the American people, not the Social Security Administration, or 

the FDA, or National Science Foundation. And the American people are not shareholders; they are taxpayers. 

The extent of the wastefulness of taxpayer dollars on the Western Regional Conference is shocking, but perhaps it’s reflective of an agency tied so closely to the real 

estate and property management industry, having hired many business professionals along with their business practices from the private sector, that the agency 

thinks it’s perfectly acceptable to hold a convention similar to those in the private 

sector. 

Suzy Khimm, an economics policy reporter for the Washington Post, published an 

interesting commentary piece for the Post on April 14th. I will submit her full piece 

for the record, but I think this excerpt sums up the issue and the challenge we, as 

legislators, face nicely: 

‘‘Like other Federal agencies, the GSA has been subject to past administrations’ 

efforts to eliminate government waste. Bush’s 2001 directive to make government 

more like business through ‘competitive sourcing’: identifying which government activities should be performed by the private sector and to force more competition between those bidding for the government’s business. 

‘‘In theory, at least, that kind of directive should have made the GSA more effective at its job. But rather than emulating the private sector’s virtues, some officials 

15 

at the agency ultimately adopted some of its vices, prioritizing quid pro quo relationships and equating lavish expense with power. 

‘‘The larger concern for government reformers is how all of this wheeling and 

dealing may be diminishing the sense of purpose in some agencies. The real aim 

of contracting services is ultimately neither to make money nor to spend it, but to 

achieve a greater good.’’ 

Senator BOXER. Thank you, Senator. 

Senator Johanns. 

OPENING STATEMENT OF HON. MIKE JOHANNS, 

U.S. SENATOR FROM THE STATE OF NEBRASKA 

Senator JOHANNS. Madam Chair, thank you very much. Let me 

thank the Ranking Member and the Chair for holding this hearing. 

I appreciate the attendance of the witnesses today. 

I am going to be very, very brief. I am looking at the clock, and 

I have an ag members meeting in about a half an hour. I am hoping to be here long enough to hear your testimony, and if I have 

questions following that I will probably submit those questions in 

written form for the record. 

But let me offer just a couple of thoughts. First of all, to the people who have been involved in bringing this to light, we thank you 

for that. I have to imagine if this happened at this conference there 

are other issues out there. I can’t imagine that this was just an isolated incident. 

My experience with Federal employees is that the vast, vast majority of Federal employees are there working hard, they want to 

do the right thing, they want to follow the rules. They don’t want 

to get themselves into the kinds of problems we see today. That is 

the vast majority of Federal employees. 

Unfortunately, circumstances like this really cast things in a 

very poor light. And I might add, appropriately so. These expenses 

and what you see here in the record is really amazing. I mean, 

really astounding. 

My interest is going to be today and going forward the question 

of what are you putting in place to change the structure and the 

culture of how GSA operates. Oftentimes GSA is the piece of the 

Federal Government that interfaces with the public. They are out 

there working to negotiate contracts and that sort of thing, doing 

the work that they are empowered to do. So it is just critically important that whatever happens from here forward, we have something put in place that puts this agency on the right path, gives 

them the right direction, sets the right course, changes the culture 

so some Senate member is not back here in 5 or 10 or 15 or 20 

years going through the same things again. 

So I am so anxious today to hear from the witnesses. I have not 

had time to study the addendum, but I appreciate the fact that you 

are putting out ideas on how we can deal with this in the future. 

My hope is that following this hearing there might even be an opportunity to do some individual visits with Senators to say, this is 

what we are thinking about, this is the direction we think this 

agency needs to go forward. 

With that, again, Madam Chair, thanks for having the hearing. 

Senator BOXER. Thank you so much, Senator. 

Senator Baucus, followed by Senator Barrasso. 

16 

OPENING STATEMENT OF HON. MAX BAUCUS, 

U.S. SENATOR FROM THE STATE OF MONTANA 

Senator BAUCUS. Thank you, Madam Chairwoman. 

Thomas Jefferson once said, when a man assumes a public trust, 

he should consider himself public property. What galls me about 

this is, this waste, the extravagance, in contrast with a lot of people I met at home, in my State, during this last recess, who are 

struggling to make ends meet. 

For example, in eastern Montana, there is something called the 

Bakken Formation. It is heavily impacted by all the gas development. The police force is stretched so thin, they can’t begin to deal 

with all the issues. Police officers start at $40,000, their salary is 

$40,000 a year. And then they see $800,000 spent, and wonder, 

what is going on here? 

The little town of Culbertson I visited, they are scratching to try 

to get money for a sewage system, trying to piece it together here 

and there. When they see this waste, they wonder, what, we could 

use that $800,000 for a sewage system in our little town. Otherwise, we can’t afford it, we can’t finance it. 

In the little town of Ingomar, Montana, it’s very small, population about two hands; they are trying to save their post office. 

The rent is $700 per month for that post office. And they see 

$130,000 for eight pre-conference trips to Las Vegas. It is just galling. It is absolutely galling when you see what the dollars could 

otherwise be spent for—and for legitimate purposes—where people 

are really struggling. 

I will just tell you, I think Senator Cardin touched on it, Senator 

Johanns, and I agree with them, there is something rotten in Denmark. Something is not quite right here. It is not just this. There 

has to be a lot more. And I very much credit you, Mr. Tangherlini, 

for taking over here. I have a lot of trust in you. I think you are 

the kind of guy who is going to straighten all this out. 

But it is going to take a lot of work, a lot of work. And it can’t 

be something you can just deal with, not only paper over, but just 

kind of do it moderately, you can’t do that. You’ve got to go to the 

core and get this thing, really, the culture problem rooted out at 

GSA. I just thank you so much, Madam Chair, for this hearing. I 

just urge you and demand of you, almost, as a person working for 

1 million people, that this is what they want. This is what my employers want. I work for all those folks I talked about; you work 

for all those folks I talked about. Everybody at GSA does. That is 

the public trust that we have to honor. 

Senator BOXER. Thank you very much, Senator. 

And now we are going to turn to Senator Barrasso. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you very much, Madam Chairman. 

Thank you also, Senator Inhofe, for holding this hearing. 

I want to thank the Inspector General and his team of special 

agents involved in this investigation. I agree with what Senator 

Baucus has said and what we have heard from Senator Johanns. 

This investigation, it has exposed the waste, the fraud, and the 

abuse that the American people really resent so much. This hearVerDate Aug 31 2005 06:59 Jun 06, 2017 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25026.TXT SONYA
17 

ing isn’t about where this wasteful conference took place; it is really about arrogance and abuse of power. 

You look at the mission of the GSA’s Public Buildings Service, 

to provide superior value, it says, superior value to the American 

taxpayer. The GSA Western Region Conference was a blatant disregard for the hard working taxpayer of this country. There was a 

systematic failure to follow the law and abide by the procedures to 

spend taxpayer dollars appropriately. 

These events did not occur as a result of lack of controls; these 

actions occurred because of a culture, a culture of excess within the 

GSA and a lack of respect for the rules and the regulations and the 

needs of the taxpayers of this country, a country with $15 trillion 

in debt. You run through the list of $6,300 for coins in velvet boxes, 

$9,000 conference yearbook, $58,000 audio visual services, and 

$136,000 pre-conference scouting trips plus a clown, a mind reader; 

the GSA employees involved in this incident have broken whatever 

small amount of trust that the American people may still have had 

with this Government. 

And it is not just the excesses that have angered so many. It is 

also the way in which GSA has conducted business. It has used deceptive tactics to get around the rules, to hide the true costs of the 

conferences. The Inspector General has found that the GSA provided contracts to vendors that undercut competition by disclosing 

other bids, that the GSA violated contracting rules by awarding 

sole source contracts to vendors. Your report found that the contracts in some cases violated set-asides for small business. You can 

go on and on and on. 

The Administrator has resigned, two senior GSA officials have 

been fired, 10 individuals have been put on administrative leave. 

But that is not enough. The taxpayers demand more. A few ceremonial terminations and shuffling employees into new positions or 

departments are not enough. I understand Jeff Neely, who is at the 

center of this investigation, is on administrative leave and is still 

getting paid. Mr. Neely and those who planned the conference 

knowingly defrauded the American people so they could throw a 

party on someone else’s credit card. This is unacceptable. We demand that those individuals, we must demand that those individuals be held accountable for their actions. 

This, I believe, is just the tip of the iceberg, and I hope the Committee conducts additional oversight hearings on the excessive GSA 

spending. 

Madam Chairman, thank you so very much for holding the hearing. I look forward to hearing from the witnesses and more from 

them in the future. 

Senator BOXER. Thank you very much, Senator. 

Senator Boozman. 

OPENING STATEMENT OF HON. JOHN BOOZMAN, 

U.S. SENATOR FROM THE STATE OF ARKANSAS 

Senator BOOZMAN. Thank you, Madam Chairman. 

In the interest of time, I think I would just like to associate myself with the remarks of my colleagues. I appreciate your leadership and Senator Inhofe’s leadership. We have our differences in 

the Committee, but I think this is something that we are all united 

18 

on, going forward and finding out exactly what has happened and 

punishing those who are at fault. Then also put in the safeguards, 

so importantly, so this won’t happen in the future. 

With that I yield back. Thank you. 

Senator BOXER. Thank you so much. Both Senator Inhofe and I 

appreciate that. 

Now we are going to turn to the Inspector General first; is that 

all right with you, Mr. Tangherlini? All right. 

STATEMENT OF HON. BRIAN D. MILLER, INSPECTOR 

GENERAL, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. MILLER. Good morning, Chairman Boxer, Ranking Member 

Inhofe, members of the Committee. Thank you for the opportunity 

to be here today. 

While my report details what went wrong at GSA in connection 

with the Western Regions Conference, I would like to take a moment to focus on what went right. The system worked; the excesses 

of the conference were reported to my office by a high ranking political appointee. And our investigation ensued. No one prevented 

us from conducting that investigation or obstructed what turned 

out to be a lengthy investigation. 

As each layer of evidence was peeled back, we discovered that 

there was more to look into. So our investigation continued. 

While some have suggested that the investigation took too long 

to produce the final report, anyone familiar with law enforcement 

investigations understands that when you turn over one stone, you 

often find more stones that need to be turned over as well. Most 

people understand the need to be careful and certain before making 

public allegations such as those contained in the report. Because 

careers and reputations are on the line, and my office does not take 

that lightly. 

Moreover, the GSA Administrator ultimately had control over the 

date on which this report was released, because it was the Administrator’s response to the final report that triggered its public release. 

The system also worked in that people responsible for the conduct detailed in my report are being held accountable. It is my understanding that after the White House received the final report, 

the Administration took swift action. A new Acting Administrator 

was appointed, senior officials were fired and one resigned. 

Finally, the system has been strengthened by the release of the 

report. The public attention it received in the media and from both 

Houses of Congress and the strong commitment to our efforts demonstrated by the Acting Administrator, Dan Tangherlini, while not 

one of many career employees and political employees who were involved in the Western Regions Conference ever came forward and 

reported the waste and abuse that occurred, perhaps for fear of reprisal, GSA’s honest, hard working employees now have been empowered to bring issues to our attention, and they are doing so. We 

have more work than ever. 

I look forward to answering all of your questions. Thank you. 

[The prepared statement of Mr. Miller follows:] 

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Senator BOXER. Thank you so much, Mr. Miller. 

Mr. Tangherlini. 

STATEMENT OF DANIEL TANGHERLINI, ACTING 

ADMINISTRATOR, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. TANGHERLINI. Good morning, Chairman Boxer, Ranking 

Member Inhofe, members of the Committee. My name is Daniel 

Tangherlini, and I am the Acting Administrator of the U.S. General Services Administration. 

I appreciate the opportunity to come before the Committee today. 

First and foremost, I want to state that the waste and abuse outlined in the Inspector General’s report is an outrage and completely 

antithetical to the goals of the Administration. The report details 

violations of travel rules, acquisition rules, and good conduct. Just 

as importantly, those responsible violated rules of common sense, 

the spirit of public service, and the trust America’s taxpayers have 

placed in us. 

I speak for the overwhelming majority of GSA staff when I say 

that we are shocked, appalled, and deeply disappointed by these indefensible actions as you are. We have taken strong action against 

those officials who are responsible and will continue to do so where 

appropriate. I intend to uphold the highest ethical standards at 

this agency, including referring any criminal activity to appropriate 

law enforcement officials, and taking any action that is necessary 

and appropriate if we find irregularities. 

I will also immediately engage GSA’s Inspector General. As indicated in the joint letter that Inspector General Brian Miller and I 

sent to all GSA staff, we expect an employee who sees waste, fraud, 

or abuse to report it. We want to build a partnership with the IG, 

while respecting their independence, that will ensure that nothing 

like this will ever happen again. There will be no tolerance for employees who violate or in any way disregard these rules. I believe 

this is critical, not only because we owe it to the American taxpayers but also because we owe it to the many GSA employees who 

work hard, follow the rules, and deserve to be proud of the agency 

for which they work. 

We have also taken steps to improve internal controls and oversight to ensure this never happens again. Already I have canceled 

all Western Regions Conferences. I have also canceled 35 previously planned conferences, saving nearly a million dollars in taxpayer expense. I have suspended the Hats Off stores and have already demanded reimbursement from Mr. Peck, Mr. Robert 

Shepard, and Mr. Neely for private, in-room parties. I have canceled most travel through the end of the fiscal year agency-wide 

and am centralizing budget authority and have already centralized 

procurement oversight for regional offices to make them more directly accountable. 

I look forward to working in partnership with this Committee to 

make sure that there is full accountability for these activities so 

that we can begin to restore the trust of the American people. I 

hope that in so doing, GSA can refocus on its core mission: saving 

taxpayers’ money by efficiently procuring supplies, services, and 

real estate and effectively disposing of unneeded government property. 

47 

We believe that there has seldom been a time of greater need for 

these services and the savings they bring to the Government and 

the taxpayer. There is a powerful value proposition to a single 

agency dedicated to this work, especially in these austere fiscal 

times. We need to ensure we get back to the basics, conduct this 

work better than ever. 

At GSA our commitment is to our service, our duty, and our Nation, not to conferences, awards, or parties. The unacceptable, inappropriate, and possibly illegal activities at the Western Regions 

Conference stand in direct contradiction to the express goals of this 

agency and the Administration. I am committed to ensuring that 

we take whatever steps are necessary to hold responsible parties 

accountable and to make sure that this never happens again. 

We need to refocus this agency and get back to the basics: 

streamlining the administrative work of the Federal Government to 

save taxpayers money. I look forward to working with this Committee moving forward, and I welcome the opportunity to take any 

questions at this time. 

Thank you. 

[The prepared statement of Mr. Tangherlini follows:] 

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Senator BOXER. Thank you both very much. 

As Senator Inhofe said, you are the good guys in all of this, and 

Susan is a good gal, Susan Brita, who came forward, as a political 

appointee, to blow the whistle. And it resulted in the President’s 

Administrator resigning, as she should have, and two people being 

fired. 

And again, I say to Ms. Brita, thank you for your courage. This 

is not easy. I have done a lot of work on whistleblower protection. 

And I know how hard it is, and the scorn that is oftentimes heaped 

on those who have the courage to step forward. And you did it for 

your country, and we appreciate it at this Committee. 

As I researched this and I realized how many scandals there 

have been involving GSA, it really shakes you up. Because when 

you look back, President Carter thought he cleaned up the mess 

way back in the 1970s. And they put people in jail for bribery and 

fraud, and they put in whistleblower protection and all of that. So 

now you move forward, then you see two scandals under George 

Bush, and now this horrible scandal under President Obama. This 

is decades long. 

So I guess the question I have for you, and I don’t expect you 

to have a pinpointed answer, but what is it about the structure of 

the GSA that leads us back to these scandals? In other words, the 

expression is, fool me once, you know, OK. But again and again, 

four scandals? Three Administrations? 

So is it, do you think, as I read your recommendations, I say to 

the Inspector General, and I ask Mr. Tangherlini as well, is it the 

fact that there hasn’t been a centralized check and balance so that 

you have these regional offices gone wild here if they have the 

wrong leadership? Is that what we need to fix? 

How many regions do we have in GSA, Mr. Miller? And are you 

enforcing more of a centralized, at this point, checks and balances 

system, right away, for all the regions, or if you have just gone 

after the Western Region? 

Mr. MILLER. Madam Chair, there are 10 regions of GSA, plus the 

District of Columbia, so essentially 11 regions. The Western Region 

is made up of 7, 8, 9 and 10, and they informally call themselves 

the Western Region. They have this conference. There is no Eastern Region, Northern Region, Southern Region. They don’t, as far 

as I know, have these conferences. 

Senator BOXER. I don’t want to just dwell on the conferences. Because if there are people who are cheaters, and there are people 

who are bad actors, they are going to figure out another way to 

steal. Forget the conferences. So my point is, you are telling me 

there are 10 regions plus DC, I understand there are 12,000 employees, is that correct? 

Mr. MILLER. Over 12,000, and I guess Willie Sutton was asked, 

why do you rob banks, he said that is where the money is. And 

part of the problem is, part of the reason there is a lot of crime 

and fraud, waste and abuse at GSA is a lot of money flows through 

GSA. It handles money on behalf of other agencies. It has millions 

of dollars flowing through it. And it has over 12,000 employees. In 

any town that you have in the United States of 12,000 or more, you 

always have a jail. So you will always have people doing criminal 

things and dumb things and silly things. It is no different, unfortuVerDate Aug 31 2005 06:59 Jun 06, 2017 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25026.TXT SONYA
54 

nately, in the Federal work force, you have people doing criminal 

things and dumb things. That is why you need inspectors general 

to monitor for fraud, waste and abuse. 

Senator BOXER. I agree. So what I am trying to say is, have you 

looked at this notion, you have looked at this notion of more centralization and checks and balances. Have you done that for every 

region or have you just now done this for the western areas because of this problem? Obviously a lot of them, I think, think this 

is a systemic problem. So I am asking you if these reforms are 

going to go forward. Are you recommending to Mr. Tangherlini that 

he centralize most of the operation? 

Mr. MILLER. As you can tell from my supplemental statement, 

that is the direction we think the GSA should go. But how GSA is 

managed is essentially an agency function and is at the discretion 

of the Administrator. It is a little out of my lane. 

Senator BOXER. So given the recommendations of the Inspector 

General that there be more checks and balances and more centralization, what is your take on it at this point, Mr. Tangherlini? 

Mr. TANGHERLINI. I already, with only a couple of weeks of experience with the organization, already have strong indication that 

we need to centralize certain functions. Late last week, I took administrative steps to centralize the finance function so that our 

Chief Financial Officer of the General Services Administration can 

actually serve in that capacity straight out to the regions as well. 

From what I understood, the regions had some autonomous ability 

to, once their budgets were allocated, spend within those allocations. And so one of our initial moves is to make sure that that 

Chief Financial Officer actually has visibility straight down into 

the expenditures at the regional level. There is a lot of work we 

have to do build the systems necessary to have visibility into the 

regional expenditures. 

We have also taken steps to consolidate the procurement oversight function as well. What we think we can do is continue to have 

some level of autonomy so that there is innovation and that the regions can reflect the needs of the local area. But we need to have 

clear accountability. Now, we are going to look at the entire structure of the agency top to bottom, we are going to undertake a process, we are already involved in that, to look at the way the system 

is structured so we can ask ourselves the kind of clean sheet of 

paper types of questions, how should it be structured. 

Senator BOXER. Good. Well, I want to say this, and I will hold 

for my next round, but Senator Inhofe alluded to this, as did others. We are going to need to have more oversight. So how many 

months do you think it will take you before you are ready to put 

these new systems in place? Because we would like to have you 

back to give us a progress report. 

Mr. TANGHERLINI. I think—we have already started making 

changes. So that is part of what I am here to report on today. We 

have the good fortune of having the budget process, the 2014 budget development process, we are entering into that now. So I think 

we are going to use our 2014 budget development process, which 

culminates in recommendations to OMB in September and a budget in February, we are going to use that process to start building 

into this. 

55 

But that doesn’t mean we are going to wait until the outcome of 

that process to make necessary changes. 

Senator BOXER. Good. So let me just say, I will discuss this further with my Ranking Member, whom I respect so much. And I 

think around September, perhaps late September, we ought to 

have you come in to talk about this. Because we have to stay on 

this. In one sense you are fortunate, because you are coming in on 

the heels of this, and everyone is going to give you the latitude. 

Don’t listen to those voices who say, we can’t change. 

Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. Senator Johanns 

has an ag commitment he needs to get to, and I don’t, so I would 

like to have you go ahead of me in line here. 

Senator JOHANNS. Thank you very much. That is very kind of 

you. I appreciate the courtesy. 

Mr. Miller, let me start with you. I have to assume that with everything that has happened, that has transpired, that you are also 

looking at other areas within the GSA. As you have gone through 

this, in your thinking about what happened and going forward, 

what thoughts would you have, what recommendations would you 

have in terms of how the GSA just better manages what is happening? Because this is beyond normally what an inspector general 

would run into. I think everybody would agree on that. 

How do we stop this? How do we put the right structures in 

place to empower the leadership at GSA to make sure that we are 

not back here again? 

Mr. MILLER. Thank you for the question. We have to deter others 

from committing criminal acts, from committing fraud, waste, and 

abuse. We had a region and a regional commissioner that was 

doing all sorts of things that are documented in our report and we 

produced to Senate committees and House committees. 

But the ultimate deterrent is criminal prosecution. And we are 

doing all that we can to identify those committing fraud and crimes 

and referring them to the Department of Justice for prosecution. 

We are doing all that we can to hold them accountable for civil liability, not just in terms of employee misconduct but people who 

do business with the GSA. Oracle paid $199 million back recently 

because of the work of our auditors. 

And so we are doing our best to hold people accountable. I know 

Mr. Tangherlini has some ideas about changes. You have heard my 

general recommendation that we need to have a strong system 

where people are held accountable. Regional people need to be held 

accountable, and people need to manage. You can’t legislate good 

management and good judgment. But you can try and put into 

place some systems where people do manage. And I will let Mr. 

Tangherlini speak more about that. 

Senator JOHANNS. Go ahead; offer your thoughts. 

Mr. TANGHERLINI. Thank you very much, Senator. 

I think the Inspector General described it very well. I think we 

need to look at the way we have structured the organization, look 

at their reporting lines of authority and ask ourselves, is this a 

structure that will ensure clear accountability. Again, autonomy allows for the opportunity for a certain amount of innovation. The 

point, though, is that that innovation has to happen within the conVerDate Aug 31 2005 06:59 Jun 06, 2017 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25026.TXT SONYA
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straints of accountability so we know what is taking place, we have 

a shared view of what is taking place, that there are appropriate 

checks and balances so that nothing like this can happen again. 

Senator JOHANNS. Let me ask both of you—Mr. Miller, something 

you said triggered this thought. Is this, based upon what you have 

seen so far, is this a regional issue? Or is this a system-wide GSA 

issue that you are facing? Or is this just simply a situation where 

the regional leadership was so lax, so whatever, that this just spun 

totally out of control? What are your thoughts on that? 

Mr. MILLER. I am a former prosecutor. I tend to see misconduct 

in a lot of places. I would say yes to all of the above. Obviously 

there is misconduct on the part of regional officials. But there was 

a national central office official, the commissioner of PBS, that 

threw a party in his loft suite and charged the taxpayers over 

$1,900 for food. That is a central office, high ranking, senior official. So I think that there is a problem throughout. 

But as an IG we do reports based on specifics. We have done a 

report specifically on the Western Regions Conference. We are reluctant to make generalizations, but I do throw those particular 

facts out to you about the party, and you can draw your own general conclusions. 

Senator JOHANNS. OK. 

Mr. TANGHERLINI. I think the events in the Western Regions 

Conference speak for themselves, that there was clearly a leadership issue happening, particularly out there in Region 9 at the time 

that this conference was planned and certainly undertaken. I 

haven’t been there long enough to really get a sense organizationally whether this is a broader cultural problem or not. 

And that is why we want to look top to bottom at the organization and ask ourselves the clean sheet of paper type questions: are 

we structured in such a way, have we built ourselves a culture in 

such a way that it encourages this kind of activity. Although I don’t 

think there is any evidence that there is, beyond what we have 

seen in Region 9 and what happened with this particular leader, 

that this is endemic. But we are open to that possibility, and we 

will work very closely with the IG. 

I think equally important, frankly, is making sure we build a 

system with appropriate accountability, appropriate checks and 

balances, appropriate visibility into the actions that people will 

have opportunities to stop this kind of thing before it happens. 

Senator JOHANNS. I don’t want to abuse my privilege here by extending this, because I am out of time. But I do want to just offer 

a thought. It would seem to me that an auditing process of some 

kind either wasn’t working, if it was in place, or in the alternative, 

if it is not in place, it needs to be. You would think just a regular 

auditing process would have picked out these issues and said, 

whoa, wait a second, time out here. You are heading off in a wrong 

direction. For whatever reason, that didn’t seem to happen here, 

which I find very, very surprising. 

So maybe a fix going forward is to fix whatever is there that 

wasn’t working, or in the alternative put in place an auditing process to catch these things. Thanks. 

Senator INHOFE. Mr. Tangherlini, kind of putting this in perspective, the event took place in October 2010. This interim report 

57 

came in May 2011, I understand. So then you had another 11 

months. If you had been in the position of Ms. Johnson at that 

time, the position that you are acting in now, what would you have 

done when the interim report came out? How would you have handled that? 

Mr. TANGHERLINI. It is very hard to conceive of the response to 

such a hypothetical. However, it is also easy to use 20/20 hindsight. 

I think going forward the best thing to do is build the kind of relationship that I tried to start on day one with our Inspector General. 

My first day into the office I came in and I met with Brian and 

his team. We subsequently had a one on one in which I sat with 

his entire leadership team and worked with them to try to understand what are the big challenges. 

I would like to build the kind of relationship where we have continued and direct communication, and as a result of that communication, we have swift and immediate action on the part of the Administration. 

Senator INHOFE. It was my understanding, maybe you can clarify 

this, Mr. Miller, it was after that interim, that May 2011, that Mr. 

Neely actually went on several trips, after that report came out. I 

am talking about two trips to Hawaii, a trip to Saipan, a trip to 

Guam, a trip to Napa Valley, and several other places. Is that correct? 

Mr. MILLER. That is correct, unfortunately, Senator. 

Senator INHOFE. All right. 

Mr. Tangherlini, there are a total of 11 regions, if you count 

Washington. And this was 8, 9, 10 and 11. Are you aware of, in 

the other areas, any other ongoing investigations that you would 

feel comfortable talking about? Do you know of any others that are 

taking place, of other regions other than this? Is this an isolated 

case for right now? 

Mr. TANGHERLINI. Let me just, if you don’t mind, reiterate that 

it is 7, 8, 9, 10, Region 11 is actually the National Capital Region, 

Washington, DC. 

Senator INHOFE. I see. That is fine. 

Mr. TANGHERLINI. But as far as ongoing investigations, I think 

it is actually better if the Inspector General speaks to that. 

Senator INHOFE. OK; that is fine. 

Mr. MILLER. Senator, yes, there are ongoing investigations, some 

involving other regions. 

Senator INHOFE. And were they stimulated because of this problem coming up, or where they already under investigation? 

Mr. MILLER. Some were stimulated because of this. I would have 

to check on exactly how many. 

As I said in my opening statement, the result of the release of 

this report is that people are coming forward now, they are calling 

the hotline. And as a result of Administrator Tangherlini and my 

joint appearance before GSA, encouraging people to come forward 

to my office, people are coming forward and reporting things. 

Senator INHOFE. I understand you had a letter that went to you, 

Mr. Tangherlini, that went to the Neely, Shepard, and I guess Peck 

was the other one, requesting return of funds that should not have 

been spent. Is that correct? And are they complying with that? 

58 

Mr. TANGHERLINI. It was our acting Public Buildings Commissioner, Linda Chero, who sent a letter to those three individuals 

demanding return of funds associated with those events. We have 

also begun the process using the Inspector General’s report to go 

down the list of other places where we believe the Federal Government and the Federal taxpayers inappropriately paid for ineligible 

items. 

Senator INHOFE. Let me just conclude by kind of backing up the 

Chairman in this case, because we have had so many experiences 

where oversight has just been neglected. I think we were perhaps 

in neglect for not doing more. So I think we will kind of serve notice, there are going to be a lot more oversight hearings, not just 

with GSA, but with other areas in this huge jurisdiction of this 

Committee. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you very much. 

Senator Barrasso. 

Senator BARRASSO. Thank you, Madam Chairman. 

The issue continues to arise, should there be a termination, additional people suspended. In response to the Inspector General’s report the Administrator resigned. We talked about officials who 

have been fired. And we get into Senior Executive Service employees who can only be removed from the civil service or suspended 

for more than 14 days ‘‘only for misconduct, neglect of duty, malfeasance, or failure to accept a directed reassignment or to accompany a position in the transfer of function.’’ 

As the new Administrator, looking at this, you mentioned taking 

strong action. Have these procedures to remove an SES employee 

be set in motion to terminate Jeff Neely? 

Mr. TANGHERLINI. I think I want to try and avoid anything I 

would say that could impact the ability for us to see through the 

administrative actions against those accountable all the way to 

completion. Because the personnel rules are rather strong, the Privacy Act also is implicated in discussing these items. I want you 

to know, though, I would like the Committee to know, that we do 

have a team of folks from our Human Capital Office, our Deputy 

Human Capital person, and from our legal office, pursuing the full 

measure against all those responsible for planning this event and 

undertaking this event and leading this event. 

Senator BARRASSO. Thank you. It is interesting, when you look 

at some of the policies we have with regard to credit card and contracting warrant policies, and learn that a number of GSA employees actually had their Government credit card privileges temporarily terminated, related specifically to this conference, way back 

in 2009, and then just 2 weeks later, the privileges were reinstated. 

So you scratch your head and say, what exactly has happened here, 

and is that something you are going to look into as well? 

Mr. TANGHERLINI. Actually, I took action over this weekend to 

vest the authority in our senior procurement executive for removal 

and reinstatement. In the past, that was another delegated authority, out to the regional areas, where people could provide that warrant authority, they could remove the warrant authority, they 

could re-provide the warrant authority. All of that needs to go 

59 

through our senior procurement executive now, and all of it needs 

to be justified. 

Senator BARRASSO. Good. 

I would ask you, Mr. Miller, looking at this as a prosecutor, as 

you said you do, are there things that we should expect in the new 

few weeks or months that we are going to learn more additional 

things, or is this pretty well complete? Are you continuing an ongoing investigation? 

Mr. MILLER. Senator, we are continuing ongoing investigations. 

As I said in my opening statement, every time we turn over a proverbial stone we find 50 more, and we find things crawling out 

from under them. I don’t know what we are going to find, but it 

has not been pretty. 

Senator BARRASSO. Just having gone through a number of the 

documents and the depositions, the invoices, looking through this, 

it does look like you question how certain vendors were chosen, 

when it would have been a lot easier to choose others, there are 

potential allegations of illegal relationships between vendors and 

those doing the procuring. Is that the sort of thing that you are referring to? 

Mr. MILLER. We are looking at all those things, yes, Senator. 

Senator BARRASSO. There was a mention made of fining some individuals, making them reimburse for money already spent. It is 

interesting how you look through some of these hotel bills, and 

even though someone may have stayed a little longer and paid the 

$93 bill, as Mr. Neely did, the cost of the room that night, and it 

was kind of a high roller suite, it would have been over $1,000, he 

said, well, just add that additional money to the overall invoice for 

the overall convention, that has come out in deposition. 

Mr. MILLER. The taxpayers paid for that. 

Senator BARRASSO. Yes, because that is an extra $1,050 for additional time. You look at all of this, and it makes you wonder, because Chairman Boxer mentioned, under both Republicans and 

Democrats there has been abuse throughout the GSA over a number of decades. Would it not be fair to ask, has GSA outlived its 

usefulness as a Federal agency? Is this something that should be 

done in the private sector, rather than the Government sector, 

since there are so many challenges here for the GSA? 

Mr. TANGHERLINI. I think, if you want these activities to happen, 

if you want fleet management, building management, in fact, most 

of the work we do is actually provided through the private sector. 

What we simply do is act as an intermediary. What we need to do 

is create the appropriate sets of checks and balances, the appropriate sets of oversight systems, the clear lines of accountability 

that can make sure that this kind of thing can’t happen again. 

That having been said, having a single accountable agency that 

can aggregate the expenses of the Government and use the scale 

of the Government to get the best possible price for the Government, I think that has value today as much as it did back when 

the Hoover Commission first proposed it and President Truman set 

up the GSA. 

Senator BARRASSO. Because if you go back to the definition, the 

goal to provide superior value to the American taxpayer, we have 

60 

fallen so far away from that that the taxpayers of this country are 

just appalled. 

Thank you. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you. 

Senator Boozman. 

Senator BOOZMAN. Thank you, Madam Chair. 

Mr. Miller, what were some of the red flags that were overlooked 

in regard to this? This stuff is pretty blatant. What was there that 

people didn’t pick up that they should have picked up? 

Mr. MILLER. Almost everything, Senator. When you have a select 

number of individuals invited to a party where food is paid for by 

the taxpayer, somebody somewhere should have—some red flag 

should have popped up and said, oops, this isn’t right. That didn’t 

happen. And we had some of our highest ranking officials attend 

these networking parties and private receptions in these rooms. 

Senator BOOZMAN. So was that budgeted, or are there receipts? 

Mr. MILLER. Yes. 

Senator BOOZMAN. Were those things falsified? 

Mr. MILLER. We went through all the receipts. It was billed to 

the Federal Government. It took a long time to find, because some 

of the bills are on purchase cards, credit cards. Some of the bills 

are in the budget for the conference. Some of the bills came out of 

the operating fund for the public buildings. They were all over the 

place. 

So I commend our forensic auditors and special agents and auditors for finding these. 

Senator BOOZMAN. So within the agency, who is responsible for 

saying, there is something amiss here? 

Mr. MILLER. Dan, do you want to take that? 

Mr. TANGHERLINI. I think actually that is part of the problem. I 

think that was part of our concern, was that we didn’t have a 

strong, centralized financial management organization that could 

see these things beginning to start coming through the system and 

start raising questions. It was all held within the region, and that 

region was being led by this individual who is the main leader of 

this activity. So that we identify very quickly as an issue, coming 

out of the Inspector General’s report. We have taken immediate action to begin to change that structure. But we think that that is 

just the beginning and why we need to take a good look, top to bottom, the way we structure and organize and operate this agency. 

Mr. MILLER. And Senator, somebody was approving the travel 

vouchers for those people traveling to this conference. So there is 

responsibility all throughout GSA. 

Senator BOOZMAN. As you have unturned these stones, are you 

finding—is this more an individual thing, or is this the culture of 

GSA? 

Mr. MILLER. We are finding a lot of things. 

Senator BOOZMAN. But is it more a cultural thing, or this has 

been going on so long that it is business as usual? 

Mr. MILLER. As an inspector general, I am reluctant to make 

generalizations without having facts to support them. I will say 

that when we uncover things, we disclose them; I gave the Administrator an interim report because we had investigations. And it got 

61 

so bad that we thought, we have to tell the Administrator so that 

they can stop this abuse. Normally we don’t do that when we are 

investigating. 

But we put together this interim report. And I briefed the Administrator in May 2011 about the abuse. We also had another 

problem with the employee rewards store, the Hats Off store; we 

gave her a draft of that, too. So we gave the managers information 

so that they could stop this. 

I don’t know what actions were taken. I will let the Administrator talk about that. But we were trying to get people to stop 

this. And then in August, there was a new regional administrator 

sworn in in Region 9. I personally met with her, went through the 

interim report with her and asked her to get a handle on the regional commissioners’ travel. I even suggested perhaps she could 

have her CFO take a look at past trips. 

And then we are faced with a 3-week trip of the regional commissioner to Saipan. We went to the Deputy Administrator, Susan 

Brita, and said, what is going on? Do you know that he is about 

to take another trip? She contacted the regional Administrator and 

the result was, he went on the trip. 

Senator BOOZMAN. So that is kind of cultural. 

Mr. MILLER. I will let you draw the generalization. 

Senator BOOZMAN. Exactly. The GSA evidently is a very troubled 

agency. Do you know perhaps some of the better agencies—our 

leadership who has been here a while mentioned that have these 

recurrent things going on at GSA. What are some of the agencies, 

what can we use as model within Government to try and model 

this after so that we don’t have this in the future? Some of the 

agencies that seem to function without these problems, is there one 

that comes to your mind? 

Mr. TANGHERLINI. I would say, I just want to, if you don’t mind, 

add quickly to the IGs, Mr. Miller’s comments about culture and 

say that at the same time, I have received dozens and dozens of 

e-mails from GSA employees who are as outraged and horrified and 

disappointed and disgusted, and frankly, even some level more, because they have associated their public service careers with this organization. And they are now embarrassed about being GSA employees. 

They are committed, the e-mails I get from people, they are committed to redoubling their efforts to do what the GSA is set up to 

do, which is save taxpayers money, which makes these events even 

more unconscionable. 

Now, what are the good agencies out there? I really think that 

the Administration has done a very good job of moving forward on 

a number of systems, accountability systems, performance accountability systems, that we really need to look at other agencies, how 

they set things up so that they have a continual quarterly accountability review of the actual performance and expenditures of their 

component parts. I think there are a lot of lessons we can learn 

from that. 

Senator BOOZMAN. Thank you. 

Thank you, Madam Chair. 

Senator BOXER. Thank you, Senator. 

62 

I just want to thank all my colleagues, because I think every one 

of these questions is important. 

So it is really good to see both of you working together. I can’t 

tell you how much it means to us. Because without that, we are 

not going to get anything done. I think the last Administrator 

should have listened to you a lot more when she saw the draft report. 

Mr. MILLER. Thank you. 

Senator BOXER. I think that was a huge mistake. And if it wasn’t 

for Ms. Brita, we might not even be here. 

So I think what is really important is for the public to understand, as you said, Mr. Miller, in your opening, what went wrong 

and what went right. But now, we have no excuses going forward 

not to fix this nightmare. And I have to say, it starts with the two 

of you working together. It really does. 

Now, that doesn’t mean you are going to agree on every single 

thing, no two people agree on every single thing. But the motivation of cleaning house is key. And putting in those checks and balances so that, look, we can never stop every bad thing from happening, but we know we can stop most. It starts with accountability for those who committed these, I would say, possible criminal acts. I believe it is very possible. I know you are looking at 

more. 

So I think this is so damaging that Mr. Tangherlini, I want you 

to be more sweeping in your reforms, perhaps, than people will be 

comfortable with. You have to. You have no other option. You can 

do something here that will last for generations if you do it right. 

I think Senator Boozman’s question was good, is there another 

agency. Well, there is really not another agency that has quite the 

same function. This is a different type of a function. Most of our 

agencies really deal with performing a particular service. You have 

to deal with so many outside, inside people, it is different. But we 

have to protect against bad people, because there are always going 

to be bad people. 

So the last Administrator before this one, the Administrator 

under George Bush, compared you, Mr. Miller, your tactics, to terrorism. I assume that was not a good working relationship. Right. 

So she is gone, now the next one is gone, and now we have this 

camaraderie based on not personalities or power, but doing the 

right thing. 

So I would like to offer a couple of thoughts and have you respond. I think all of us who have led organizations, be they small 

or large, know that the tone set at the top is critical. There is a 

very kind of a coarse expression, which I will say at my own risk, 

which is the fish sinks from the head. It makes sense. If the person 

at the top is not good, it filters down, the ugliness. And we have 

a good person at the top, we have a great Inspector General who 

has proven himself through various and sundry Administrations. 

So are you considering, Mr. Tangherlini, or have you done this, 

personal town halls with the GSA employees? Now, it is my understanding that the good people there, and you point to them, are 

being forgotten. That is the saddest, saddest, saddest thing. Because my understanding, and you can confirm this if I am not correct, is that these current GSA employees following Obama’s direcVerDate Aug 31 2005 06:59 Jun 06, 2017 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25026.TXT SONYA
63 

tives have saved more than a billion dollars for taxpayers. Am I 

right on that? 

Mr. TANGHERLINI. They have helped us save a million dollars by 

following—— 

Senator BOXER. No, I don’t mean this. I mean by putting in energy efficiencies, and putting in better computing and better printing. 

Mr. TANGHERLINI. Absolutely. The value proposition goes well beyond that when you start looking at what we do in terms of competing travel, what we do in our procurement areas, in terms of 

strategic sourcing. It is really a great story. 

Senator BOXER. So let’s be clear here for the taxpayers to know, 

because of the President’s directive to become efficient and save 

money, we have saved, is it fair to say, more than a billion dollars 

for taxpayers? 

Mr. TANGHERLINI. I think it is fair to say. 

Senator BOXER. OK. So let’s not lose that. Because that gets lost. 

How many people sitting here today work for GSA? Could you 

raise your hand? I know what a painful thing this is. Every time 

there is a scandal in the Senate, it hurts everybody, and we have 

them. It is ugly. And I know what you are going through. But I 

think what we can’t lose sight of is the good people there. And in 

order to make sure that they are supported, so are you considering 

having these types of meetings, whether it is large ones out in the 

region? What are your plans to exert that type of leadership? 

Mr. TANGHERLINI. Well, already, on my second and third day at 

GSA, I went through the Public Buildings Service, the local Public 

Buildings Service, I went out to our region 11 office here in Washington, I went to our FAS, and I went floor to floor and addressed 

GSA employees. I have already been on what we call Chatter, 

which is our internal social networking dialogue opportunity to 

take questions from GSA employees. In my letter to GSA employees on my first day I asked them to reach out to me. They have 

not been shy. They have been reaching out to me. 

And in our joint letter we asked employees to reach out to both 

of us if they have an issue. 

Senator BOXER. I think what is important, and this is my opinion, is for you and your trusted people at the top to meet with 

groups of people, large groups of people, and just let them know 

that we are going to deal with this matter, we are going to 

straighten this out, we are going to be known as the GSA team 

that cleaned up a mess that has happened over four decades that 

keeps on happening, and we are going to clean it up. 

It also seems to me, you talk about innovation. Innovation needs 

to be coming from the grass roots up. But if it has a cost to it, it 

needs to go to the central place here. Because that is what you 

need. You need cost controls right now, on everything. I think you 

should overdo it. There is always a way that you can later on say, 

maybe we have overdone it. 

But in my opinion, for example, these guys did pre-convention 

trips to try out the resort with their friends. That is disgusting. 

And it has to stop. So any travel budget, it seems to me, needs to 

be looked at by your trusted people, every travel budget. And all 

the expenses, all of that has to be instituted, I think, to regain conVerDate Aug 31 2005 06:59 Jun 06, 2017 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\25026.TXT SONYA
64 

trol over these runaway regions. I say regions plural, I may be 

wrong, I don’t mean to impugn anybody else. 

But your leadership in terms of reaching out to the good people 

is just as important as your leadership in punishing the bad people. It is a big job. And you have trusted people. 

So I want to help you. I know Senator Inhofe does, I know members of the Committee want to help. Because it will rebound to our 

benefit, if we can help you straighten this out. We are the biggest 

landlord, we have a lot of property. We can really make it work for 

the taxpayers if we do it right. If we do it wrong, it is not going 

to be good. 

So you have my full support here. Come September, we will take 

another look-see on how everything is going. 

I am going to turn it over now to Senator Barrasso. 

Oh, Senator Carper, I am so sorry. You were gone and now you 

are back. 

Senator CARPER. I am happy to yield. 

Senator BOXER. No, go ahead, because he will take his final. 

Senator CARPER. Thank you for joining us today. Let me just say, 

I spent a lot of years in the Navy. We were trained from an early 

age that leadership by example is one of the best forms of leadership. People may not believe what we say, they will believe what 

we do. We are entrusted with positions, none of us is perfect; we 

all make mistakes. 

I think it was Richard Nixon who used to say that people who 

don’t make mistakes are people who don’t do anything. My father 

used to say, just use some common sense. I think what happened 

here is common sense was not used, and leadership by example 

certainly was not pursued. It is a reminder for all of us that the 

positions that we are entrusted with, that we need to use some 

common sense, and we need to remember that there are people 

looking at us and watching us. That brings with us a special responsibility. 

I have a couple of questions I want to ask. Mr. Miller, it appears 

that, the irony of it is that we are focused here on the expenditure 

of less than a million dollars, and there is the issue, a much larger 

issue pointed out every year by GSA that involves surplus property, that we have great potential savings with respect to surplus, 

thousands of pieces of property that are owned by the Federal Government that in some cases we don’t need. We spend a lot of money 

for utilities and security and so forth. 

The Administration is focused on this, your agency has been part 

of this, and we need to be part of the solution. I think we will be 

moving legislation later this year, not just focused on the expenditure of $800,000, which is not insignificant, but also to focus on the 

expenditure, wiser expenditure of billions and billions of dollars, 

which is part of your responsibilities. 

Mr. MILLER. Indeed. 

Senator CARPER. Mr. Miller, it appears the system that is designed to uncover such wrongdoing actually worked as it is intended. According to your report, you were informed of excessive 

spending and potential employee misconduct in conjunction with 

the conference I think by a GSA Deputy Administrator, is that 

right? 

65 

Mr. MILLER. That is correct. Susan Brita, who is sitting behind 

me. 

Senator CARPER. Would you raise your hand, Susan? OK, thank 

you. 

And that prompted you to launch your investigation? 

Mr. MILLER. Yes, sir. 

Senator CARPER. And once you revealed the findings of your investigation to GSA leadership, how quickly did they respond? 

Mr. MILLER. Well, I think former Administrator Martha Johnson 

is the one to answer that question. I went through the interim report in May 2011 with Administrator Johnson and her senior staff. 

I also in August 2011—— 

Senator CARPER. Could you just back up? Will you start the time 

line for me? 

Mr. MILLER. The time line is the Deputy Administrator contacted 

our office around December 2010. The actual conference was October 2010. So somewhere around December 2010, the Deputy Administrator came to our office. We began the investigation immediately. 

And in May 2011 we were finding such outrageous conduct that 

we took the unusual step of preparing an interim report. We don’t 

usually do that with investigations. But we prepared an interim 

Power Point to share with the Administrator. We gave that to her 

and her staff. 

Senator CARPER. That was May 2011? 

Mr. MILLER. May 3rd, 2011. And then on May 17th, 2011, I met 

with her personally, went through the Power Point. 

Senator CARPER. What was her reaction? 

Mr. MILLER. She appeared to be disgusted by the Power Point. 

But we went through it. I also went through another draft report 

that we had on what is called the Hats Off program; it is an employee reward program. And I won’t bore you with the details, but 

it was a draft, I went through that with her as well. In June 2011 

the Hats Off report became final. And that indicated wrongdoing 

on the part of various GSA employees, especially the regional commissioner. 

Then in August 2011 I personally met with the newly appointed 

regional administrator for Region 9. 

Senator CARPER. And the administrator had been removed, 

stepped down? 

Mr. MILLER. There was a vacant regional administrator for Region 9, and that was vacant for a long time. The regional commissioner, Jeff Neely, was acting regional administrator at the same 

time, which may be part of the problem. But Administrator Johnson made it a point to find someone, and appointed someone to 

take charge as regional administrator. And so I personally briefed 

regional administrator in August 2011 and suggested that she get 

a handle, get control of the regional commissioner’s travel, and that 

perhaps she could employ her financial officer to help do some historical work as well to let her know what the true story was. 

So that is the time line. We came out with a final report, and 

I delivered it to Administrator Johnson on February 17th. The way 

our system works is, we will do essentially what is a final report. 

We give it to the agency to make comments, so they tell us whether 

66 

we got the facts wrong, or there is something wrong, or they say, 

no, it is exactly right. Either way, we publish their response, and 

the whole thing is published. 

So I gave her what is technically called the draft final report 

February 17th. And I gave her 30 days to prepare a response that 

we would publish with the report. She asked for an additional 30 

days. But it was clear all along that we would publish whenever 

we received her response. And ultimately, we received her response 

on April 2nd, and that is when we published the final report. 

Senator CARPER. All right, good. Thank you. 

Are you satisfied with the corrective measures that have been 

taken? Just be very brief. Are you satisfied with the corrective 

measures that have been taken? 

Mr. MILLER. I think more needs to be done, Senator. 

Senator CARPER. Give us some idea what that might be. 

Mr. MILLER. There are a lot of challenges, perhaps the Acting 

Administrator wants to address those. 

Mr. TANGHERLINI. I agree with the Inspector General; more 

needs to be done. 

Senator CARPER. Can you give us some idea what that might be? 

Mr. TANGHERLINI. We mentioned some around the stronger oversight and accountability of the regions, better and stronger financial management systems that reach into the regions so we have 

clear visibility what is taking place there. 

Senator CARPER. The issue, Madam Chair, did you all get into 

the question, and I will just ask you really, did the fact that there 

was not a regional administrator for apparently a significant period 

of time, is that symptomatic? Are there other regions, are we having extended periods of time where you don’t have somebody literally there in charge in the regions? And what should we be doing 

about that? What should the Administration be doing about that? 

Mr. TANGHERLINI. Some of that has to do with the changeover 

between Administrations this year, trying to appoint these positions. But also some of it had to do with the fact that the accountability of the regional commissioners had been transferred away 

from those regional administrators and sent directly to the commissioner of the Public Buildings Service. We learned yesterday in one 

of the hearings that there is almost some confusion about the organizational structure of GSA. And we need to make that very clear 

and very obvious so we can have the kind of accountability we 

need. 

Senator CARPER. All right. 

Thank you, Madam Chair. 

Senator BOXER. I think that was an important question, so thank 

you for pursuing it. 

Senator Barrasso, then Senator Udall. 

Senator BARRASSO. Just to follow up on Senator Carper’s point 

about bringing back the accountability, the question to the Inspector General is, do you have the resources that you need? You said 

there is more that needs to be found. Do you have all the resources 

that you need to bring back the accountability that taxpayers demand and deserve? 

Mr. MILLER. We are always doing the best with what we have. 

We have 70 special agents, special agents do the interviewing, they 

67 

have law enforcement authority. We have a number of auditors, we 

have a total of about 300. We have a number of vacancies. And of 

course because of appropriations, we are not filling many of those 

vacancies. 

But as everyone in the Federal service is doing, we are doing as 

much as we can. 

Senator BARRASSO. Thank you, Madam Chairman. 

Senator BOXER. Thank you so much. 

Senator Udall. 

Senator UDALL. Thank you, Madam Chair, it is good to be with 

you today, and I really appreciate you doing this hearing. It is tremendously important to focus on the issues that the GSA does 

focus on, and I am going to talk a little bit about New Mexico here. 

At the House hearings and our hearing today, many listed the 

outrages in this wasteful, over the top conference. I am not going 

to spend a lot of time on that, but a mind reader, sushi, luxury 

suites, when you are wasting taxpayer money, what happens in 

Vegas does not stay in Vegas. 

So let’s take a little bit more of a look here at this conference in 

terms of the big picture. My first question is going to focus on all 

these things you have done in the past. But first, to hit on New 

Mexico. From a New Mexico perspective, this conference scandal is 

also especially worrisome for two reasons. First, I am disappointed 

that this conference involved the western regions of GSA, of which 

New Mexico is a part, which is within the southwestern region, Region 7. 

And second, more importantly, this scandal is distracting from 

the urgent GSA pending project in New Mexico, the Columbus 

Land Port of Entry. Columbus, New Mexico, is a border town 

across from Palomas, Mexico. GSA included a $60 million new land 

port of entry facility in its 2012 budget. In December this Committee approved a resolution authorizing construction. This facility 

is extremely important to security, U.S.-Mexico trade and economic 

development in southwest New Mexico. I was in Columbus last 

week and heard about the importance of this project. We need to 

root out the waste and abuse at GSA and get back to the work that 

taxpayers want us to do, like economic development and border security. 

So Mr. Miller, you have talked a lot about the report your office 

did regarding this wasteful conference in 2010. I would like to hear 

some more about your other works on wasteful spending, so that 

we can put this current controversy into context and into perspective. Here are a number of figures from your most recent semi-annual report. I hope you can tell us really what they mean. First of 

all, $460 million in questioned funds are recommended for better 

use; $370 million in criminal, civil, and administrative recoveries; 

260 new investigations; 71 cases accepted for prosecution; 85 indictments and 64 successful prosecutions; 88 contractors suspended 

and 61 contractors disbarred. 

Now, there are similar figures in all the semi-annual reports 

going back to President Bush. Could you put this in perspective? 

We have this conference that is obviously a real waste of taxpayers’ 

funds. But some of the other things you are doing here I think are 

68 

very important, and the dollar amounts are huge. Could you put 

that in perspective? 

Mr. MILLER. Thank you, Senator, for noticing. Our office does a 

lot of great work. We have great auditors, great special auditors, 

forensic auditors, and lawyers. They do a tremendous amount of 

work. I will just start backward. 

I made it a priority when I became Inspector General in 2005 to 

make referrals for suspension and debarment. We have referred 

over 1,000 individuals and companies for suspension and debarment so far. We have indicted a number of individuals and companies. This year alone we indicted a group of individuals who were 

producing counterfeit integrated circuits, claiming that they were 

Cisco integrated circuits, and then upgraded integrated circuits. 

They broke the code that Cisco had to upgrade them, and they 

would upgrade sometimes real Cisco integrated circuits with counterfeit parts and sell them at a profit to the Government and to 

others. We convicted those individuals; they were convicted in the 

Eastern District of Virginia by the U.S. Attorney’s office there. 

We also investigated—which led to the conviction of 11 individuals involved—property managers managing properties in the DC 

area, including a manager of White House facilities. They were taking bribes. For example, they would have an arrangement with a 

contractor to replace an exhaust fan. And they would use their purchase card to charge $2,000 or $1,000 for replacement of a fan. In 

reality, the fan cost $80. So the contractor then would kick back 

a part of that money to the property manager. 

So 11 property managers and contractors were convicted earlier 

in this year, I guess 2011. 

Senator UDALL. Mr. Miller, in terms of perspective, is the waste, 

fraud, and abuse at GSA improving, or is it getting worse overall? 

You’ve had a real perspective here looking at this big picture issue. 

Mr. MILLER. We continue to look at the larger systems, too. Because we do audits of programs of GSA. And GSA, we do audit programs regularly at GSA. Having conferences is not a program of 

GSA, so it is not one of the regular things we audit. We will start 

now. But we audit their systems, and we look at their work yearly. 

And we find more and more fraud, waste, and abuse. 

I don’t know that we have sat back and compared how much 

fraud there is year by year. Fraud by its very nature is hidden. I 

am happy that, thanks to the hard work of our special agents, 

auditors, forensic auditors, and lawyers, we are uncovering more 

and more fraud. 

Senator UDALL. The last GSA Administrators have had to resign. 

Is there something about GSA, could you tell us why we are seeing 

that many scandals at GSA? What can you enlighten us on there? 

Mr. MILLER. GSA handles a lot of money. Millions, maybe billions of dollars, flow through GSA. It handles a lot of money, handles a lot of property. There are a lot of contracts that it controls. 

There is a lot of temptation. And with over 12,000 employees you 

are going to find criminal conduct, stupid conduct, and just plain 

negligence. So it is a large operation with a lot of employees, so you 

do have criminal activity. 

Senator UDALL. Madam Chair, I see I am out of time. I just have 

one more question, if I could have your indulgence here. I would 

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like to ask the Acting Administrator, is this scandal going to distract GSA from doing its job, such as constructing essential Federal 

facilities like the Columbus, New Mexico, border crossing land 

point of entry? 

Mr. TANGHERLINI. We hope it won’t. Because that would add a 

very bad outcome to an already unacceptable situation. We need to 

make sure the GSA, the nearly 13,000 GSA employees stay focused 

on their core mission and save taxpayers money. If we are diverted 

from that, then we are only compounding the mistakes that were 

made at this conference. 

Senator UDALL. Thank you. 

Madam Chair, I know that you are a real watchdog over the 

Treasury, and I appreciate your holding this hearing and making 

sure that we don’t see these kinds of wasteful expenditures of taxpayer money. 

Senator BOXER. Thank you, Senator, for joining us. I think we 

have had a good, a very important hearing. We are not looking for 

photo ops of people taking the fifth. We are trying to now move forward and make sure this doesn’t happen again. 

Now, the Inspector General, in answer to Senator Udall’s question. He is uncovering more and more fraud. It just seems like it 

is a never ending thing. 

So Mr. Tangherlini, you are sitting next to a man who is saying 

he is uncovering more and more fraud. So again, I am trying to encourage you to do far more than even you thought you had to do. 

You need to, because we are not going to change this. 

So I am encouraging you here, I am supporting you in that effort. 

As I think of ways, if I was in your seat, again, I would communicate with every single employee. Have you done any type of an 

e-mail or any type of a letter or any type of a little chat? You said 

you chatted. 

Mr. TANGHERLINI. Yes. 

Senator BOXER. Have you made a statement that all GSA employees from the top to the bottom can hear you talk about (A), 

how much you respect the work they do and (B), how we have zero 

tolerance for fraud in any way? 

Mr. TANGHERLINI. We need to continue to do that. But on my 

first day I sent a letter to all GSA employees, I followed it up later 

in the week with a joint letter with the Inspector General. I have 

also done a video for all General Services employees. 

Senator BOXER. Good. 

Mr. TANGHERLINI. We started the social media, the chatter conversations. There is going to be more of that. I like your idea of 

maybe using something like telepresence to get out to the regions. 

Senator BOXER. Very important. 

Mr. TANGHERLINI. And to talk to folks. 

Senator BOXER. Because you know what is going on right now 

around the water cooler. Not a lot of work. 

Mr. TANGHERLINI. Right. 

Senator BOXER. And I think people have to know we have a job 

to do; it is our job to prove to America that this agency is filled 

with patriotic, loyal Americans who want to do the right thing. And 

that is critical. 

70 

What is so outrageous about this is how these bad actors, very 

bad actors, perhaps criminal actors, have sullied the reputation of 

so many people. It really is so disturbing. And they tried to also 

sully the reputation of our President, these people, in some of the 

things that they did. So I think a reach-out here is critical. 

I also think—you have 11 offices, right? Ten plus DC, right? 

Mr. TANGHERLINI. Yes. 

Senator BOXER. So I would, if I were you, I would find 11 of the 

best people I could find, seriously, the top notch people, whether 

they are in the agency, and you have good people there, or find 

these people. I would at this point send them out to each of these 

offices, and I think they ought to be special oversight officers, there 

to make sure people get back to work, do their job, and before all 

these papers go off to the central place, which I think is important, 

that there is somebody there who can liaison with you, so you don’t 

have a situation where you have the same people sending you the 

papers and you don’t have that much confidence. 

I think that ought to be something you consider. Now, it may not 

be necessary to do it in every one of these offices. But I will tell 

you right now, from what I heard about the one in my State, it 

ought to be done. 

Mr. TANGHERLINI. Right. Already in regions 7, 8, 9, and 10, in 

the Public Buildings Commission we are sending out new acting 

public buildings commissioners. But I also took away from here 

that we need to very quickly focus on the role of the regional administrator and the clear accountability that those folks need to 

show over those regions. 

Senator BOXER. Yes. And sending someone out there to oversee 

it, whether that is a 6-month assignment, plucked from the best of 

your best, it is up to you. When I hear the Inspector General, 

whom I admire so much, who had to take so much verbal abuse 

in the past, and who stuck with it, when I hear him say he is looking, he is turning over rocks, and every time he turns over a rock, 

something crawls out, that does not give me heart. I do not feel 

good. 

I am so happy that you are both there. But I am worried about 

what is to come. You are there now, and you have nothing to do 

with it. But from this point forward, you do. So don’t underestimate this job that you have in terms of shaking this tree, and let 

these bad apples fall. Have your best people in these regions. 

We become Washington-centric sometimes in Federal Government. We really do. And one of the things I learned, being in my 

job for a long time, thanks to the good people of my State, is that 

in the beginning, there was always tension between my regional offices at home and my main office. My main office thought they 

were the best, the best, and everybody was doing things out there 

wasn’t so important. Baloney. The people on the ground are the 

ones who are meeting my constituents, are the ones who are bringing the issues to me, are the ones with the face of my office. 

So we had a lot of heartfelt meetings. And now we are a seamless team. But it takes a lot of time. But I think that these regions 

have gone wild. This region went wild on you. They went rogue. It 

can’t happen, and there are still ugly things that are going to come 

71 

out, let’s face it. Because we know that Mr. Miller isn’t going to 

stop until he knows every single thing. 

So will you consider this idea of, I am not just talking about a 

person of public buildings, I am talking about an overall good person to get in there and say to the region, we need to change, and 

this is how it has to be, this is what our leader in Washington said 

we are going to do, and we are going to do this for him, we are 

going to do this for the country. So would you consider that type 

of approach? 

Mr. TANGHERLINI. Absolutely, Senator. 

Senator BOXER. Excellent. I think it would really help. Because 

the big word here is accountability and checks and balances. 

You know the expression they used to say back in the founding 

days, we are a Government of laws, not men, well, we would say 

today we are a Government of laws, not people. But we are a Government of laws and people, as the Inspector General said. We 

have the laws on the books. We have the rules on the books. And 

these people skirted them, disobeyed them, and it will happen until 

the end of time. But we have to get to the bottom of this. I think 

it is going to take your most trusted people, with the most integrity, to get out to these areas and make them understand, they 

don’t just do anything that comes along. They have to carry out a 

very important mission and do it with the highest integrity. 

So I have one more sticky wicket, which is not a hard question 

for the Inspector General at all. Has anyone in any way ever tried 

to stop you from this investigation in the Senate or in the House? 

Mr. MILLER. No. 

Senator BOXER. Has anyone called you and said, go easy on this? 

Mr. MILLER. No. 

Senator BOXER. Has anyone called you, Mr. Tangherlini, a Senator or House member, and said, go easy on this? 

Mr. TANGHERLINI. No. 

Senator BOXER. OK. I want that clear, because we have a chairman over in the House who was saying that one of the Senators 

is trying to stop this investigation. And that is an outrage. 

So I am going to read in our close what the Inspector General 

said. ‘‘There is a glimmer of good news. The oversight system 

worked. My office aggressively investigated, audited, interviewed 

witnesses and issued a report. No one stopped us from writing a 

report and making it public.’’ 

And the whole ugly event is now laid bare for all to see. Justice 

Brandeis said that sunlight is said to the best of disinfectants; how 

true. 

So let the record be clear: there isn’t one Senator or no Member 

of Congress who is trying to do anything other than get to the bottom of this. And the two of you, and I have to say Ms. Brita, you 

are the good guys and you are the heroes of this. We should never 

forget that. We stand with you, and we will be with you every inch 

of the way. Don’t let anyone stop you from doing the right thing 

here. Because the days are over of these parties, they are over. The 

days of being unaccountable at GSA are over. 

And we have to make sure they are over long after none of us 

is sitting in these rooms. That is what the Carter administration 

thought. They put people in jail, there was fraud, they protected 

72 

whistleblowers, and we got back again and again and again. So 

let’s make it this time, set into place a system that is going to stop 

all these bad things that have happened and more. And I think you 

do it with the best people, and you do it with the kind of an organization that builds in the checks and balances. So if you have a bad 

actor, that bad actor is found out. There is a layered system. 

One of the things about the defense at the airports, and we are 

all critical, and we don’t think they work, and sometimes they are 

abused and so on, it is a layered system of defense. It is a layered 

system. You buy the ticket; you are checked out. You go through; 

you are checked out. You go to the desk; you are checked out. Your 

baggage is checked; everything is checked. So if you have multiple 

checks, then you are doing your best. 

Does it mean it is perfect? Does it mean it is foolproof? No, because we are humans. But I think you can do it. If ever I saw two 

people, three, if I might add, who have the integrity and who have 

the will, it is the three of you. And the others here, who I don’t 

know, who I believe want to help you do it. 

So let’s show the world, let’s show our taxpayers that we are 

going to fix this. And although this is a horrible situation, and we 

could see more parade of horribles, we are going to change it, and 

we are going to make sure that we change it for good. 

Thank you very much. We will stay in touch. Thank you. 

[Whereupon, at 11:45 a.m., the Committee was adjourned.] 

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