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ALLEGATIONS OF MISCONDUCT AT THE GENERAL

SERVICES ADMINISTRATION

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 28, 2007

Serial No. 110–35

Printed for the use of the Committee on Oversight and Government Reform

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Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSISGHT AND GOVERNMENT REFORM

HENRY A. WAXMAN, California, Chairman

TOM LANTOS, California

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

BRIAN HIGGINS, New York

JOHN A. YARMUTH, Kentucky

BRUCE L. BRALEY, Iowa

ELEANOR HOLMES NORTON, District of

Columbia

BETTY MCCOLLUM, Minnesota

JIM COOPER, Tennessee

CHRIS VAN HOLLEN, Maryland

PAUL W. HODES, New Hampshire

CHRISTOPHER S. MURPHY, Connecticut

JOHN P. SARBANES, Maryland

PETER WELCH, Vermont

TOM DAVIS, Virginia

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

VIRGINIA FOXX, North Carolina

BRIAN P. BILBRAY, California

BILL SALI, Idaho

——— ———

PHIL SCHILIRO, Chief of Staff

PHIL BARNETT, Staff Director

EARLEY GREEN, Chief Clerk

DAVID MARIN, Minority Staff Director

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C O N T E N T S

Page

Hearing held on March 28, 2007 ............................................................................ 1

Statement of:

Doan, Lurita A., Administrator, General Services Administration; and

Brian D. Miller, Inspector General, General Services Administration .... 126

Doan, Lurita A. .......................................................................................... 126

Miller, Brian D. ......................................................................................... 209

Grassley, Hon. Chuck, a U.S. Senator from the State of Iowa ..................... 117

Letters, statements, etc., submitted for the record by:

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, Congressional Research Service report ................................ 161

Davis, Hon. Tom, a Representative in Congress from the State of Virginia:

Prepared statement of ............................................................................... 114

Minority staff report ................................................................................. 72

Doan, Lurita A., Administrator, General Services Administration, prepared statement of ........................................................................................ 129

Miller, Brian D., Inspector General, General Services Administration,

prepared statement of ................................................................................... 212

Waxman, Chairman Henry A., a Representative in Congress from the

State of California:

Prepared statement of ............................................................................... 62

White House PowerPoint presentation .................................................... 4

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ALLEGATIONS OF MISCONDUCT AT THE

GENERAL SERVICES ADMINISTRATION

WEDNESDAY, MARCH 28, 2007

HOUSE OF REPRESENTATIVES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The committee met, pursuant to notice, at 10 a.m. in room 2154,

Rayburn House Office Building, Hon. Henry A. Waxman (chairman

of the committee) presiding.

Present: Representatives Waxman, Maloney, Cummings, Davis of

Illinois, Tierney, Clay, Watson, Lynch, Higgins, Braley, Norton,

McCollum, Van Hollen, Sarbanes, Welch, Davis of Virginia, Burton,

Shays, Mica, Platts, Duncan, Turner, Issa, Foxx, and Bilbray.

Staff present: Phil Schiliro, chief of staff; Phil Barnett, staff director and chief counsel; Kristin Amerling, general counsel; Karen

Lightfoot, communications director and senior policy advisor; David

Rapallo, chief investigative counsel; John Williams, deputy chief investigative counsel; David Leviss, senior investigative counsel; Susanne Sachsman, counsel; Molly Gulland, assistant communications director; Mark Stephenson and Daniel Davis, professional

staff members; Earley Green, chief clerk; Teresa Coufal, deputy

clerk; Caren Auchman, press assistant; Zhongrui ‘‘JR’’ Deng, chief

information officer; Leneal Scott, information systems manager;

Will Ragland, Kerry Gutknecht, Sam Buffone, Bret Schothorst, and

Lauren Belive, staff assistants; David Marin, minority staff director; Larry Halloran, minority deputy staff director; Jennifer

Safavian, minority chief counsel for oversight and investigations;

Keith Ausbrook, minority general counsel; Ellen Brown, minority

legislative director and senior policy counsel; John Brosnan, minority senior procurement counsel; Steve Castor and Charles Phillips,

minority counsels; Edward Kidd, minority professional staff member; Patrick Lyden, minority parliamentarian and member services

coordinator; Brian McNicoll, minority communications director; and

Benjamin Chance, minority clerk.

Chairman WAXMAN. The meeting of the committee will please

come to order.

Today’s hearing has been called to investigate allegations of misconduct at the General Services Administration. There are probably plenty of Americans who have never heard of GSA, but it is

the Government’s premier contracting agency. It focuses on the

nuts and bolts of Government’s logistics. GSA manages nearly $500

billion in Federal assets, including Federal buildings, courthouses,

and other facilities, and it handles the purchase of billions of dollars worth of services on behalf of other Government agencies.

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The Administrator of GSA is Lurita A. Doan, and she is with us

today. Also with us is Brian Miller, the Inspector General of GSA.

And we are pleased to have, as well, Senator Charles Grassley,

who has been following these issues closely, joining us, as well.

We welcome all three witnesses and look forward to their testimony.

One of Congress’ most important oversight goals is to ensure that

our Government serves the interests of the American taxpayer, not

the interests of favored contractors, a particular Federal agency, or

a single political party. The American people expect Government

officials to uphold a public trust. That is what the taxpayers are

paying them for, and nothing else.

Over the past several months, however, multiple allegations have

surfaced about actions by top GSA officials that do not serve the

interests of the taxpayers. These are the allegations we will investigate today.

The first issue we will examine is a political briefing that took

place at GSA on January 26th of this year. This briefing was conducted by Scott Jennings, Karl Rove’s deputy at the White House.

Mr. Jennings has been in the news for his involvement of the firing

of the U.S. Attorneys, and is one of the White House officials that

both the House and Senate have asked to testify.

Also at this briefing were Administrator Doan and 40 other political appointees at GSA, some of whom participated by videoconference. The briefing was held at GSA facilities during the work

day, but there were no career GSA officials allowed at the briefing.

We have obtained the PowerPoint presentation that Mr. Jennings gave to the GSA officials that day. This is the White House

Office of Political Affairs.

It would be perfectly appropriate for a meeting at the Republican

National Committee or with campaign operatives, but it is the last

thing taxpayers would expect at a Government agency like GSA.

Here is one of the slides. I think we have it on the screen. This

is from Mr. Jennings’ presentation. In this slide Mr. Jennings identified by name the 20 Democratic Members in the House that the

White House is targeting for defeat in 2008. We have another slide.

This one identifies by name 20 Republican Members that the White

House considers most vulnerable in the upcoming election. The

White House briefing was partisan. It was strategic. And it had absolutely no connection to GSA’s Government mission. When the

White House presentation was over, Ms. Doan asked her staff,

‘‘How can we help our candidates in the next election?’’

Well, here are the facts as we know them: One, GSA’s top political appointees were assembled to hear a confidential White House

briefing on the Republican campaign strategic for 2008; two, they

were asked to consider how GSA resources could be used to help

Republican candidates; three, they did this in a Federal building

during work hours at taxpayer expense.

This appears to be a textbook example of what should never happen at a Federal agency. Unfortunately, the January 26th briefing

may not be the only example of politicization of the Government’s

premier procurement agency. Inspector General Miller will testify

today that GSA’s Administrator Doan and her top staff intervened

in a contract with SUN Microsystems to reverse the judgment of

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three career contract officers. According to the Inspector General,

the Administrator’s personal intervention resulted in a sweetheart

deal for SUN Microsystems that will cost taxpayers tens of millions

of dollars.

I want to read one sentence about the SUN contract from the Inspector General’s testimony. ‘‘As a direct consequence of her intervention and in breach of GSA’s fiduciary duty to the U.S. taxpayers, the pricing concessions made to SUN means that the U.S.

taxpayers will inevitably pay more than they should.’’

That is a remarkable finding, but it appears to be corroborated

by evidence received by our committee, including the statements of

contracting officers involved in the negotiations.

Perhaps even more disturbing, the information we received appears to directly contradict statements that Ms. Doan made to Senate Grassley about her involvement in the SUN contract. Ms. Doan

wrote Senator Grassley that, ‘‘I had no knowledge of the negotiations or basis for decisions made regarding this contract.’’ But, as

will become apparent today, there is a written record documenting

Ms. Doan’s personal involvement in reversing the position of career

contracting officials.

A third issue we will explore is the no-bid contract that Ms. Doan

gave to her former business associate and friend, Edie Fraser. According to the Inspector General, this is a serious violation. In his

testimony he states, ‘‘We are talking about the violation of a key

contracting principle: promoting open competition and avoiding any

appearance of personal favoritism in awarding Government business, by the leader of Government’s premier civilian contracting

agency.’’

On this issue, too, there is a troubling question about Ms. Doan’s

candor. The Inspector General found, ‘‘The record paints quite a

different picture than what Administrator Doan told the OIG investigators.’’

In our own investigation, we also found striking discrepancies between the assertions of Ms. Doan and the evidence we gathered.

Well, there are a number of documents that I would like to make

part of this hearing record. These documents include the White

House PowerPoint presentation, the briefing memo prepared by the

staff, the documents cited in the briefing memos, the transcripts

and depositions the committee has received, the audit and investigative reports provided to the committee by the Inspector General, and the documents that Members will be referring to today

in their questioning. Without objection, they will be made part of

the record.

[The information referred to follows:]

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Chairman WAXMAN. There is a common thread that ties together

the allegations we will be exploring today. There are basic rules

that are supposed to apply to Federal officials. You can’t engage in

partisan politics while you are on Government time. You can’t give

no-bid contracts to your friends and business partners. And you

should put the taxpayers first when negotiating contracts.

The question the committee needs to examine is whether Ms.

Doan and her team at GSA violated these bedrock principles.

Americans want a Government that works. They don’t want basic

Government services politicized and they don’t want their tax dollars squandered. Today we will have an opportunity to explore how

well Ms. Doan is meeting these standards at GSA.

[The prepared statement of Chairman Henry A. Waxman follows:]

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Chairman WAXMAN. I want to now recognize Mr. Davis for his

opening statement, and then we will proceed right to the witnesses.

Mr. DAVIS OF VIRGINIA. Thank you, Mr. Chairman.

You know how much I respect you and how much I value our

work together, but your description of this investigation brings to

mind what Mark Twain said about fraud science—one gets such

wholesome returns of conjecture out of such a trifling investment

of fact—for that is what we are dealing with today: accusatory conjecture based on the selective and biased interpretation of very few

facts.

The title of today’s hearing pretty much says it all: Allegations

of Misconduct at the General Services Administration, not facts,

not findings, not even credible complaints, just allegations picked

up from hostile media reports based on unvetted sources. We will

see at the end of the day these allegations will still be, as the dictionary defines the term, assertions unsupported and by implication regarded as insupportable.

Sadly, this hearing represents the fullest expression yet of the

modus operandi adopted by the new majority. Citing yesterday’s

news clips, releasing accusatory conclusory inquiry letter, through

amplification and repetition of mere allegations, seek a conviction

in the court of public opinion, and call a hearing. First the verdict,

then the trial.

This process renders hollow the promise of collegiality and consultation with the minority. Only after the fact are we told witnesses have been threatened with subpoenas unless they submit

coercive, transcribed interviews, never anticipated by committee

rules. In these non-deposition depositions, the prior notice and

other procedural protections otherwise due to witnesses in the minority can be ignored. Future witnesses be advised: when the committee expresses their hope to proceed without a subpoena, volunteer for a deposition. That way we will all have time to prepare and

we will all know how and when the transcript can be used to support official committee business.

In this case the committee has expended significant resources

searching for anything to support their a priori conclusions, but

they found virtually nothing. We received and reviewed over 14,000

pages of documents from the General Services Administration.

Without consultation with the minority staff or the ranking member, the majority staff, largely through the threat of subpoena, conducted 14 transcribed interviews securing the voluntary attendance

of current and former GSA officials from as far away as Boston and

Denver.

Two GSA officials flew from Boston to Washington, D.C., for

interviews regarding the Hatch Act violations. The Boston officials

were questioned for as little as 30 minutes in one instance and 40

in another. No reason was supplied why these interviews couldn’t

take place telephonically. Agency counsel was not permitted to be

present at these interviews. Personal counsel was said to be permitted; however, four witnesses stated for the record they were not

told they were permitted to retain personal counsel for these transcribed interviews. Nevertheless, one interviewee did bring personal counsel.

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Not surprisingly, this flawed process has produced an equally

flawed product. As discussions at length in the staff report we are

releasing today, the accusations leveled against the GSA Administrator, Ms. Lurita Doan, are either flat-out wrong or based on a

distorted and myopic view of the management responsibilities of

the head of a major Federal agency.

I would ask unanimous consent at this point that our minority

report to our Members be included in the record.

Chairman WAXMAN. Without objection, we will put it in the

record.

[The information referred to follows:]

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Mr. DAVIS OF VIRGINIA. Lurita Doan is a talented, motivated professional. Born in New Orleans, she was one of the first African

American children to integrate the city’s private schools. She was

only 7. That first day, she was knocked down, kicked, and hit with

a brick, but she persisted. She earned her undergraduate degree

from Vassar and a master’s degree in renaissance literature from

the University of Tennessee Knoxville. A self-described unabashed

entrepreneur, she started a successful technology business, which

she sold before entering public service. She and her husband of 22

years have two daughters.

Perhaps the saddest, most reprehensible aspect of this defective

oversight was the attempt to drag one of Ms. Doan’s daughters into

the web of circumstances being spun to ensnare her mother. That

a business friend of Ms. Doan provided her daughter a reference

for an unpaid Capital Hill internship application is offered as evidence to support alleged misconduct in dealings between two professional women years later. It is as implausible as it is inappropriate. Even the IG report refers to that. It is just sad, and it shows

how low this has gone.

The breathlessly described no-bid contract hardly turned out to

be the elaborate scheme to enrich an acquaintance, alleged by the

majority. We found only that Administrator Doan wanted very

much to acquire a study of GSA’s use of small businesses, particularly those owned by minorities and women. It is a topic about

which she knows much and cares deeply. She was understandably

embarrassed and dismayed that the agency she just took over had

received an F from the Small Business Administration for small

and minority business utilization.

She was determined to improve GSA’s image and score. The evidence supports the conclusion her motives were clear, if her methods a bit over-zealous. She wanted to engage the services of a wellregarded diversity consulting firm, Diversity Best Practices, to help

fix the problem. The Administrator erroneously believed that she

had the authority to acquire these services for $20,000 on an expedited sole source basis. When she learned otherwise, the arrangement was called off. No work was ever performed. No money

changed hands.

She has expressed regret that it happened, but continues, as is

her way, to advocate forcefully to improve GSA outreach to small

minority and women-owned businesses.

With regard to the contract extension to SUN Microsystems,

there is simply no evidence to support the allegation that Ms. Doan

acted improperly. Ms. Doan never spoke to or pressured any of the

contracting officers to exercise the SUN option. In the end, the contract extension terms were judged by the contracting officer to be

fair and reasonable.

Similarly, there is no evidence to support the allegation that she

intervened in the suspension and debarment process. She merely

asked her chief of staff for a briefing on a manner which could have

resulted in a Government-wide prohibition against awarding any

contracts to most of the major national accounting firms. Can you

imagine debarring the big four accounting firms from doing business with the Government without the Administrator even knowing it? That is the alternative. Such an inquiry was ordinary and

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appropriate. It would have been negligent not to be apprised about

the ramifications of so significant an action.

I sat up here several months ago when we were going over security clearances and the Deputy of OMB said he wasn’t informed

about it and we gave him the devil for not being informed on what

was going on underneath him. We expect people to at least know

what is going on beneath them.

The agency’s suspension debarment official stated, ‘‘At no time

did I receive any direct or indirect instruction or comment from the

Office of the Administrator.’’ He said he processed and concluded

the matter as directed by the factual record, in accordance with the

prescribed process.

Then there is the alleged Hatch Act violations. It appears that

on January 26, 2007—remember that date—at the conclusion of a

staff luncheon—this is during lunch—attended by GSA political appointees called by the administration—this is not Ms. Doan’s meeting, this was a meeting called by the administration, something

they routinely do in Executive agencies. Ms. Doan didn’t put out

the White House political affairs order. She just simply attended

the meeting. The Administrator made an off-hand comment about

helping our candidates. That comment has somehow been connected to other conversations about inviting public officials to GSA

building dedications, efforts to invite Speaker Pelosi to an event in

her District, and to include Senator Mel Martinez in a similar

event in his home State of Florida are anecdotally relayed, not that

she said anything, relayed as evidence of prohibited partisan activity on Federal property. Such comments may be impolitic, but several factual realities defeat the effort to make them evidence of unlawful political activities.

What candidates? What election? In January of this year, neither

Representative Pelosi nor Senator Martinez was a candidate for

any public office. No other candidates are mentioned. Based on the

evidence before us, the only politics at GSA appear to be intramural, and it is a tough sport.

Administrator Doan has had some disagreements with the GSA

Inspector General. She thought him needlessly adversarial in assessing the inevitability of the subject of judgments of contract officers. That, it seems, is where her problems began. The IG, a former

Federal prosecutor, takes issue, often publicly, with current GSA

leadership on the reach and role of his office. That is his right. But

the statement provided to the committee by the IG for today’s hearing is an extraordinary narrative. Apparently, hell hath no fury

like an IG scorned. Rather than audit results or investigative findings, he brings us anecdotes, conjecture, innuendo, and invective to

impugn the judgment and character of the GSA Administrator.

His statement mischaracterizes information provided to this committee, and it appears his office provided information to the majority and others that was not made available to us. We will have

more than a few questions for the IG today.

Finally, I want to bring the committee’s attention to an e-mail

that was sent last night by Ms. Shana Budd, the GSA contract officer who finalized the SUN Microsystems contract extension. She

takes issue with the majority’s attacks on her integrity and her

work. It is important for Members and the public to understand

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the demoralizing professional and personal toll of the investigative

tactics being used by the majority in this instance.

This was an unsolicited e-mail. This wasn’t under threat of subpoena from us. This is an unsolicited e-mail that came in last night

from a GS–13 career civil servant doing her best for the Government. It is the kind of professionals we want to serve in Government. Here’s what it says.

‘‘Pat, have you seen this? My words and sentiments have been

twisted so badly that it is at the point where they are making false

statements about what I said. The author of this memorandum’’—

meaning the majority’s memorandum—‘‘is committing a crime by

hand-picking small phrases and comments out of the broader context of the interview, which obviously destroys the reader’s ability

to comprehend the true meaning of my statements. The author is

dramatically twisting my words for the purpose of meeting his

ends.

I am astonished. I am dumbfounded. This is destroying my welldeserved good name and reputation. It is also attacking my ethics,

procurement integrity, and business judgment, all of which are upstanding and highly regarded. It seems to me I would be well

served in consulting with a private attorney in order to protect the

previously mentioned assets which are priceless.

How very, very disturbing that something like this can happen

in this country that I love and believe in. I am an honest citizen

and hard-working, talented professional who has dedicated my life

to civil service in dedication to the American people. I possess impeccable procurement integrity and excellent business judgment. I

remain immensely proud of the work I did on the SUN Microsystems contract, because I know beyond a shadow of a doubt that

every action I took was in the best interest of the Government and

the American taxpayers, of which I am one.

To think that actual Congresspeople would level these charges

against me brings tears to my eyes and a squeeze to my heart. It

is shattering my image of the American electorate as people who

stand up for what is right, do the right thing, and most certainly

protect honest, conscientious public servants. I lived in northern

Virginia for many years, and the U.S. Capital was always my favorite place to take visitors. I love what I thought I stood for. Now

I don’t know what I will think next time I see it. Who would have

thought that doing my job, going the extra mile, and taking a stand

for what is right would lead to this?

I am honored and proud to serve my Country in the capacity of

contracting officer. I am proud of the warrant that hangs on my

wall. And I am supremely confident that I perform my job with utmost integrity in an honorable, truthful, level-headed, sensible,

quality oriented, professional manner that serves the public very

well. This is unjust and unfair.

How ironic that the very people who are accusing me of having

poor integrity are, themselves, the ones who possess poor integrity.

I believe that there is a term for this very behavior used by mental

health professionals. It is called psychology projection. The encyclopedia describes it as follows: psychology projection or projection

bias is a defense mechanism in which one attributes, projects to

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others, one’s own unacceptable or unwanted thoughts and/or notions.

Projections reduce anxiety by allowing the expression of the unwanted subconscious impulses and desires without letting the ego

recognize them, and it is time for the congressional committee to

do its job right, and they can start by not attacking good people.

I will not just sit back and accept these unjust and undeserved insults. I will fight this to the bitter end for myself and for every average, honest American citizen. Shana Budd, Contracting Officer,

GSA Region 8, Denver Federal Center.’’

And let me just add we got her permission to read this into the

record. She is not a schedule C; she is a career professional.

I look forward to today’s hearing and asking Administrator Doan

to allow to clear her name and reputation, as well.

Thank you.

[The prepared statement of Hon. Tom Davis follows:]

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Chairman WAXMAN. Thank you very much, Mr. Davis. We will

let the facts speak for themselves.

I do want to point out that Shana Budd’s testimony in her interview will be made public and people can see what she said in that

interview and then judge whether her comments in the e-mail are

justified.

Let me also just point out two other procedural things, without

getting into the facts. One, we issued no subpoenas. If people came

and volunteered to talk to us because they knew we might issue

subpoenas, well, that is just the way it works, but we did not issue

any subpoenas. Second, the Republican staffs were present at every

interview, so keep that in mind, as well.

We are pleased now to have with us Senator Grassley.

We are delighted that you took the time to come from the other

side of the Capitol because of your involvement in this issue, and

we welcome you here today. We are eager to hear what you have

to say about the matter, because I know you have been involved

in this question far longer than any of us.

Mr. MICA. Mr. Chairman, just a point before we get to Senator

Grassley, are we doing opening statements?

Chairman WAXMAN. No, we are not going to do opening statements. We have the witnesses, and then we will proceed right to

the questions.

Mr. MICA. So there will be no opportunity for any of the Members to comment?

Chairman WAXMAN. That is correct, until they get to their 5 minutes.

Mr. MICA. Well, I would like an exception to that. I am the ranking member of Transportation and Infrastructure Committee, and

we have responsibility, legislative responsibility, over GSA, and we

have also worked on this particular issue, since you have raised the

point, and I would like time for an opening statement. I would be

glad to defer first to the Senator, but we have spent a lot of my

personal time and staff time to investigate this matter.

Chairman WAXMAN. I certainly will want to——

Mr. DAVIS OF VIRGINIA. Mr. Chairman, the general rule of the

committee, as I understand it, is that Members get opening statements. In this case, I would ask that we follow the rules of the

committee and allow Mr. Mica to make an opening statement.

Chairman WAXMAN. Well, Senator Grassley does have a time

schedule. Would you allow him to go first and then you make your

statement?

Mr. MICA. Yes, I think that would be fine. Thank you.

Chairman WAXMAN. Senator, we are pleased to have you.

STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR

FROM THE STATE OF IOWA

Senator GRASSLEY. I thank the members of this committee for

their commitment to oversight, one of our most sacred responsibilities as a Congress. Today’s hearing, focusing on a number of issues

related to decisions of GSA and other senior officials, and ultimately their impact on the American taxpayer.

My concerns began last year, when I learned that the relationship between GSA Inspector General Mr. Brian Miller and GSA

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Administrator Ms. Doan was strained and deteriorating. I hope you

know that I had a long history of looking into wasteful Government

spending and the very important role that is played by Inspectors

General, and I hope that you understand that it doesn’t matter to

me whether we have a Republican or Democrat administration, I

try to do the job of oversight equally the same.

I believe that the IG in any agency is our first and main line of

defense against waste, fraud, and abuse of taxpayers’ money and

misconduct by Government officials. The IGs, quite simply, are

watchdogs, and I have been and will continue to watch the watchdogs. It is incumbent on Congress to ensure that the IGs are doing

their job, that they have the resources to do their job, and that

there is no undue interference with an IG’s ability to do his/her

mission.

Currently, GSA holds contracts with thousands of contractors

worth billions. Someone has to ensure that these contracts yield

the best deal possible, and that contractors involved honor all

terms of each contract. In the GSA, this is a team effort involving

GSA contract officials and the IG. This is a delicate balance, but

one that has proven to work, proven by millions and millions of dollars of savings.

When I learned that the relationship between GSA Administrator and the IG was becoming more and more strained, I decided

to get to the bottom, and I am not pleased with what I found. I

can certainly accept that agency heads and their IGs may not always see eye to eye; however, I cannot accept any move by an

agency head to undermine the independence of the IG. That independence is the heart and soul of the IG Act. It is what allows the

IG to present objective findings in their investigative reports.

When it was brought to my attention that the Administrator intended to remove the reimbursable fundings that the GSA IG depends on for audits of contracts in their pre-award phase, I immediately looked into the impact that it would have on the Inspector

General’s work. In the end, the money for the reimbursable audits

was restored in fiscal year 2007, but the entire situation provided

insight into the flawed budgeting concept that has the unintended

effect of encroaching on the independence of the IG.

So on February 23, 2007, I asked the Senate Appropriations

Committee to fix the problem by providing a direct appropriation

for GSA IG’s pre-award audits. The reimbursable audits cost the

GSA only $5 million per year, but have been responsible for saving

more than $2 billion in the last 2 years, alone. I think $10 billion

(sic) in and $20 billion out sounds like a pretty good deal.

I have asked Administrator Doan about her relationship with the

IG, and she has assured me that she understands and accepts the

importance and necessity of the IG’s independence. She says that

she is trying to bring fiscal discipline to the entire agency, including the Office of IG. I accept that, because that is a worthy goal.

But, despite her assurances to the contrary, though, her actions

and words have not convinced me that she is committed to utilizing

the GSA Office of the Inspector General to its maximum potential,

as intended in the law.

She has indicated privately and publicly that the IG has been

heavy handed in dealing with GSA employees. She has even sugVerDate 11-MAY-2000 14:07 Feb 04, 2008 Jkt 000000 PO 00000 Frm 00122 Fmt 6633 Sfmt 6633 C:\DOCS\40153.TXT HGOVREF1 PsN: HGOVREF1
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gested that the IG officials have intimidated other GSA employees

and contractors. These are very serious allegations against Federal

law enforcement officers and accredited auditors, and if true they

deserve the highest level of investigation by both Congress and the

executive branch.

Despite numerous attempts to get details, though, on these allegations from the Administrator, I have received nothing but innuendos and unspecified allegations.

During the course of my investigation I discovered that there was

one specific allegation relating to a contract involving Government

vendor SUN Microsystems. The GSA IG conducted a very thorough

investigation of the matter and could find no one in the GSA’s regional office that felt intimidated by IG officials. However, during

the course of that investigation I did learn some very interesting

facts about this particular SUN Microsystems contract which may

be the root cause of the dispute with the IG.

The first piece of information that caught my attention was this:

in spite of repeated warnings by senior GSA officials since 2006

that SUN Microsystems had allegedly committed civil and/or criminal fraud on two of these contracts, GSA, with Administrator

Doan’s blessing, proceeded to re-award the contract to SUN on September 8, 2006, with no conditions, strings, or precautions regarding alleged fraud.

The IG began post-award audits of these contracts over 2 years

ago. Those audits were finally completed yesterday. The scope of

the alleged fraud has been established and verified. The allegations

of fraud by SUN will now be referred to the Department of Justice

for further consideration.

By August 2006, several GSA contracting officials, all the way up

to the Administrator, were fully knowledgeable about the alleged

fraud, yet none took appropriate corrective action to address alleged fraud. Why? Well, the alleged fraud on these contracts involving defective pricing, unauthorized charges, unpaid discounts is

valued at $10 million. Even SUN Microsystems had admitted to

GSA that they had been negligent in providing proper pricing and

discount information to GSA. SUN has provided a corrective action

plan to prevent this from happening in the future. Whether this

corrective action plan is effective remains to be seen, but that

doesn’t wipe out years of negligence by this Government contractor.

The second piece of information that concerned me was that this

new SUN contract, which will go through 2009, was negotiated on

terms that are extremely unfavorable to the Government. The

terms were so unfavorable, in fact, that, immediately upon signing,

taxpayers lost millions of dollars due to improper discounting and

pricing calculations. The lost savings could be as high as $20 to $30

million, based upon IG investigation.

This was the very same issue that the GSA IG was investigating

before the contract was renewed. It seems that everyone involved—

the IG, the contracting officer, senior GSA officials—was aware

that the new contract was bad for the GSA, bad for Government,

and, of course, bad for the taxpayers.

GSA’s first response to the allegations of fraud developed by the

IG was to grant another in a long line of contract extensions to

SUN on August 30, 2006. This brought a little time. Then a new

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contracting officer was installed on August 31st, a contracting officer with no previous experience with this very complicated contract.

Finally, on September 8th, just 8 days later, GSA awarded the

contract to SUN, this contract that is even worse for the Government than the one previously negotiated over the past year by the

two previous contract officers, both of whom were replaced between

February and August 2006.

To make matters worse, the Administrator told me in a letter

dated March 13, 2007, that she was made aware of the potential

criminal fraud by SUN on August 29, 2006, which was 2 days before the new contract officer was appointed and 9 days before the

new contract was awarded.

After the IG informed her of the alleged fraud on SUN contract,

she reportedly told the IG, ‘‘It is essential for GSA to sign the contract with SUN.’’ That was on August 29th. Two days later, Federal Acquisition Service Commissioner Williams told the contract

officer that he and Administrator Doan, ‘‘Considered the SUN contract strategically important and wanted it awarded.’’

What is even more shocking is that the FSA staff, the arm of the

General Services Administration responsible for negotiating this

contract, were made aware of SUN’s alleged fraud as early as February 12, 2006, and possibly earlier, at least 7 months before the

contract was awarded.

What was the rationale for going ahead with this contract? Was

it GSA’s fear of losing the contract to another agency like NASA?

Was it the loss of income from the fees, or simply a desire to continue doing business with this contractor for some other still unknown reason?

Hopefully continued investigation such as this hearing today will

eventually reveal what went wrong and answer these questions.

I want to close by making a very important point. It was teamwork of the IG and the contracting officials that uncovered both the

potential fraud and the problems with the new contract, and it was

the IG Brian Miller’s outstanding leadership that created an environment where these good things could happen. Yet, despite their

very best efforts, their warnings fell upon deaf ears at the highest

levels of GSA. The message this sends to Government contractors

is very clear: it doesn’t matter how poorly you manage the Government’s money or how badly you violate the Government’s contract,

the doors of the U.S. Treasury are wide open. Help yourself to what

is in the coffers. Take what you need. GSA will do business with

you on your terms.

So, Mr. Chairman, let me make one point crystal clear, including

my duties. The Government coffers are not open. We are watching

the activities of Government contractors, senior agency officials.

The perpetuation of fraud and violation of law should not be tolerated, period.

There are systems in place to prevent this, like the IG Act and

what you are doing here, congressional oversight. When money is

lost due to a flawed contract, negligence, or fraud, we must remember that money is not the GSA’s, it is not Congress’ money, that

it is money out of the pockets of hard-working American taxpayers,

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and among our most important responsibilities is to ensure that it

is spent responsibly, wisely, and according to law.

If fraud occurred on this contract and SUN owes the taxpayers

money, as the IG reports, then the money must be recovered, those

responsible must be held accountable.

Thank you.

Chairman WAXMAN. Thank you very much, Senator Grassley. I

appreciate your being here. You have been legendary as an advocate, and also for your tenacity in looking out for the taxpayers of

this country, and I appreciate your insights into this issue.

I know you have to go, so what we are going to do is Mr. Davis

has a few questions, I have a few questions, and then we are going

to excuse you.

Senator GRASSLEY. OK.

Chairman WAXMAN. Mr. Davis.

Mr. DAVIS OF VIRGINIA. Senator, I appreciate your being here. I,

too, as the chairman of this committee, we would go where the

facts took us, and Mr. Waxman and I together went after the administration when we thought they were wrong and defend them

when we think they are right. We all want savings. And Ms. Doan

is a big girl. She can take care of herself on the questions to follow

to explain her role in this.

There is no evidence that she negotiated directly with SUN

Microsystems that you can find, is there? You don’t have any evidence that she negotiated directly with SUN Microsystems, do you,

Senator?

Senator GRASSLEY. What I have evidence of is that there was

questions raised about alleged fraud over a long period of time that

should have been taken into consideration by anybody doing business with this company.

Mr. DAVIS OF VIRGINIA. Right, but you don’t have any evidence

that she negotiated with——

Senator GRASSLEY. At this point everything is alleged.

Mr. DAVIS OF VIRGINIA. Right. I think she can answer these

questions.

I would just add that I spent my career before I came here as

a Government contracts attorney. In most agencies the IG doesn’t

do the pre-audit report. This is done by the contracting auditors or

the DCAA. This is kind of the exception to the rule where the IG

does. But let me just say this. Let’s assume that GSA allowed this

SUN scheduled contract to lapse. Let’s just assume for a second we

have reached an impasse, they have been through three contracting

officers. If the contract lapsed, what would happen then to agencies

that require needs for SUN products to purchase them under individual acquisitions? If they are not on the GSA schedule and an

agency needs it, how do they get it?

Senator GRASSLEY. I’m not doing the business of GSA, but it

seems to me when there are questions about fraud that come up

that if there was a necessity to go 1 more day or 2 more days or

10 more days to keep Government functioning, that you would do

it with complete openness, that there is very much questions involved.

Mr. DAVIS OF VIRGINIA. I agree with you. Well, Senator, the only

thing I would note here is this had gone on for weeks and months

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with extensions that were far more costly to taxpayers than getting

this resolved. And also, getting it on the schedule is just a license

to hunt. Once you are on a schedule doesn’t guarantee you one, correct. That is why it is so difficult to understand, for people to make

these statements about it costing millions of dollars.

What happens, as I understand the process, is ordering agencies—in this case, it is a license to hunt. You are on the GSA

schedule, but for an agency to then buy your product they have to

compete it off the schedule against competing companies, who also

have to negotiate their prices, and the price that was negotiated

here is just kind of a starting place. They generally go down from

there, and that makes it difficult to measure.

But I think you are right that we need to take a look at this,

and when agencies negotiate these things it should be subject to

congressional oversight. We look forward to, I think, a robust conversation about that today, and I’m sure the Administrator can tell

you what her thought process was, as the policymaker. As you

know, IGs’ roles aren’t to make policy, they are to make audit recommendations.

Senator GRASSLEY. You have to remember that in Government

contracts it is a little bit different than in a commercial——

Mr. DAVIS OF VIRGINIA. Very different.

Senator GRASSLEY. The people who want to do business with the

Federal Government have responsibility to make more information

available to the Government.

Mr. DAVIS OF VIRGINIA. Absolutely.

Senator GRASSLEY. And you would expect that any deal that the

American Government gets would be, if nothing more than reason

because of quantity, we would get a better deal than they give to

the commercial side.

Mr. DAVIS OF VIRGINIA. Senator, I am not sure that is always

true. For example, in Medicare prescription drug prices I’m not

sure that Government would get a better deal than you get off of

some of these larger buying agencies. I think you would agree with

me on that. But, aside from that, let’s look at this. I appreciate

your bringing it to our attention.

What I think the evidence will show today is that you had an impasse. It had been through three contracting officers, and if they

went off the schedule, the Government was going to get its product

somewhere. I think they can defend or not the merits of this, but

I think the evidence will show that Ms. Doan didn’t negotiate a

thing in this case. She simply said we have an impasse, let’s try

to resolve it, and both sides at one point switched their contracting

negotiators.

Thank you.

Senator GRASSLEY. Well, in regard to drugs, the Government

might get a better deal, but our senior citizens only have the choice

of 25 percent of the drugs that they otherwise have under the plan

we have right now.

Mr. DAVIS OF VIRGINIA. Senator, it is the same problem here. If

you don’t get a deal here, and SUN Microsystems isn’t on the GSA

schedules, and the Government has a need for those products, you

go out into the marketplace and you pay a lot more.

Senator GRASSLEY. Are you done with me?

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Chairman WAXMAN. No, Senator, I want to ask you a few questions.

Senator GRASSLEY. Yes, I’m glad to answer your questions.

Chairman WAXMAN. It seems that what GSA is supposed to do

is go out and negotiate fair and reasonable prices for other Government agencies to get the services or products that they might use

in their Government activities. We are going to go into this issue

more in detail, but, from my understanding, GSA had a contractor,

SUN Microsystems. SUN Microsystems was giving a lower price to

their commercial customers and then would turn around and

charge the Government more for the same services, which was contrary to GSA rules.

So when they negotiated the contract and renegotiated the contract they said you can’t do that, and they went through a long period of time of extensions. What they needed to do, if they couldn’t

get their contractor, SUN Microsystems, to give the best price to

the Government, they needed to look for somebody else. But we

will go into that more in detail.

What I want to ask you is you have been looking at this issue,

and you asked Ms. Doan for her comments, and now you have seen

what she had to say to you. You have looked at the documents and

the e-mails from Ms. Doan. Do you think that this raises any question, after you reviewed all this matter, about the accuracy of the

assertions that Ms. Doan made to you in the letter to you?

Senator GRASSLEY. I think it is typical of too many letters I get

back from various agencies of Government, including this one, and

this is an example of what I am talking about, so I am in agreement with you that we need more information and have not been

entirely candid. But there is an institutional disease in bureaucracy under Republicans or Democrats that you have always got to

pull teeth to get answers to your questions.

Chairman WAXMAN. That is true enough, and that is why I think

Congress has to do its oversight responsibility. Do you think this

is a worthwhile activity for an oversight committee?

Senator GRASSLEY. Listen, you wouldn’t be doing your constitutional job upholding your oath if you weren’t doing what you are

doing today and do more of it.

Chairman WAXMAN. And let me ask you this question: who appointed Ms. Doan and who appointed the Inspector General for her

agency?

Senator GRASSLEY. Listen, the buck stops at the Oval Office.

Chairman WAXMAN. So both were appointed by the same President?

Senator GRASSLEY. Yes. And I want you——

Chairman WAXMAN. And they are having a disagreement because

the Inspector General, in pursuing his job of watching over this

agency, has pointed out that he thinks they have given contracts

where the taxpayers are paying more money than they should?

Senator GRASSLEY. Yes.

Chairman WAXMAN. Well, we will go into it with them, because

we will have them both here, but it just strikes me that when the

Republicans say this is partisan and unnecessary and unfair, I am

pleased to have you here to say that this is the kind of thing that

we ought to be doing, watching out for the taxpayers.

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Senator GRASSLEY. I want you to know that Inspector Generals

are in the first line. They should be very, very independent. They

ought to probably have more independence than the present law

gives them.

I have been involved in the firing and resignations of IGs that

haven’t been doing their job, at least five, and, you know, they help

us to do our constitutional job of oversight. Your job, my job would

be much more difficult if we didn’t have Inspector Generals.

Chairman WAXMAN. Thank you. I certainly agree with you.

Thank you very much for being here. We know you have a busy

schedule.

I would like to ask the Members, by unanimous consent, even

though we were going to have opening statements only by the

ranking member and myself, that we allow Mr. Mica to give an

opening statement, and then we will proceed to the witnesses. Does

that meet everybody’s agreement?

[No response.]

Chairman WAXMAN. If so, Mr. Mica, you are going to be treated

with special courtesy today and we recognize you at this time for

an opening statement.

Mr. MICA. Thank you. Having served with Mr. Waxman, for 15

years, I know he has been around a lot longer in Congress, I appreciate that.

As I did state, I took over the responsibility of ranking member

of Transportation and Infrastructure. One of our subcommittees is

Economic Development and Public Buildings, of which we have legislative responsibility for GSA. Quite frankly, I didn’t know the

GSA Administrator from Adam’s house cat several months ago. I

might say that, just by way of information about myself—and we

just heard from Senator Grassley—I started out some of my career

with the responsibility of reviewing local government and then

some State government operations.

One of the first things I did was send a local Republican official,

a county official, helped send him to jail for waste, fraud, and

abuse, so I don’t play those games. If someone is abusing their office, I will go after them. Mr. Waxman and I and Mr. Davis, we

have been on the committee and we have done that over the years,

and I think we have that responsibility in the future.

That being said, I have at least two times questioned the Administrator with some of my staff. When I first read some of the accounts in the Washington Post, I guess, that printed this story

about a no-bid contract, I, too, became concerned. So I started looking at this and talked to her. I didn’t know much about her. I found

out she was a professional businesswoman who had great experience. I thought, my god, she is giving some kind of a favor and a

bid to a company she dealt with in the private sector. This looks

like some sort of a payback.

Then I was absolutely stunned when I found out that she had

not received any money from the company, this diversity company,

that, in fact, she had paid $400,000 for contracts and this company,

in fact, had a good reputation in looking at diversity issues, and

she had conducted some of that in the private sector, so I was sort

of stunned by what I found.

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Then I found out that GSA, and not knowing much about GSA

because I hadn’t been responsible for oversight in this area, was actually about to get or had gotten an F grade in diversity. So here’s

an agency, and she is a minority Republican appointee who comes

into an agency and finds an agency that is getting an F grade in

its performance relating to racial diversity in the Department.

I think her biggest mistake at this point is trying to think she

could do something like she did in the private sector, is move something forward to correct the situation. Having already contracted in

the private sector with someone who did a good job on diversity

questions, she tries to get a contract to avoid an upcoming again

analysis and review of the agency’s poor performance.

So I looked at that and I thought there is nothing here. I mean,

in fact, she should probably be applauded for trying to come into

an agency that has a horrible reputation on diversity and racial

questions of employment in the agency, and as a minority appointee trying to do something about it.

So then I thought, well, I heard a little bit about the partisan

politics, possible violation of the Hatch Act. I thought, well damn,

me and Henry, we have her on this one. Then I find out that actually she didn’t even initiate the conference. I thought, well, maybe

she did this before the election. Then I went back to see when was

she appointed. She was appointed in June of last year. July, August, September, October, November, December, January, February. Here we are in February, so she has been an 8-month appointee. Was she trying to influence the election in the fall? This

actually took place January 28th, I think the date was, the end of

January, in a conference call not initiated by her. So strike out No.

2.

Then we get to the SUN contract. Ohio, we have her this time

because she was involved in knowing all about the SUN contract.

Here’s the dates on the SUN contract. Negotiation with SUN

started, the first and second contract extensions were executed by

Robert Overly over a period of 7 months. A second contract extension was granted to expire February 2005. Well, where the hell is

Ms. Doan? She didn’t come in until June, and then the dates we

just got even from Senator Grassley, she had been on the job for

45 days trying to get something done on something that had been

pending, I understand, for 5 years.

I have been involved in investigations and reviews on this committee for 15 years, and I am telling you this unfortunately looks

like it is a targeted attempt to go after a minority appointee. I find

that very offensive in this process.

Chairman WAXMAN. The gentleman’s time has expired.

Mr. MICA. Thank you for the time.

Chairman WAXMAN. Thank you very much, Mr. Mica. You can

stay for the rest of the hearing if you want to hear the witnesses,

but I know you have made up your mind.

We will now proceed to listen to the two witnesses that involve

the issues that have been put before us.

I am very pleased to welcome the Honorable Lurita A. Doan. She

is the 18th Administrator of the General Services Administration.

Prior to becoming GSA Administrator in May 2006, Ms. Doan was

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the president of New Technology Management, Inc., a company she

founded in 1990.

Ms. Doan, we want to welcome you to our hearing today. I want

to tell you that your prepared statement will be in the record in

full. We would like to ask, if you would, to try to limit your oral

presentation to around 5 minutes, but we will not be strict on that

because it is important that we hear from you.

It is the practice of this committee to put all witnesses under

oath, and I would like to ask you to stand and please raise your

right hand to take the oath.

[Witness sworn.]

Chairman WAXMAN. The record will indicate the witness answered in the affirmative.

We are pleased that you are here, and I am going to now recognize you for your comments.

STATEMENTS OF LURITA A. DOAN, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION; AND BRIAN D. MILLER,

INSPECTOR GENERAL, GENERAL SERVICES ADMINISTRATION

STATEMENT OF LURITA A. DOAN

Ms. DOAN. Mr. Chairman, Ranking Member Davis, and members

of the committee, I appreciate the invitation to appear before you

today to address the matters raised in the March 6th invitation.

This is my first time testifying as Administrator of the General

Services Administration.

Mr. Smith Goes to Washington is one of my favorite movies, but

I have to admit that I never thought that I would be living the

movie, and yet here I am.

Thank you for the opportunity to resolve a number of issues that

have appeared in the media. I welcome this opportunity to set the

record straight.

I have submitted a detailed written testimony, but let me highlight the key elements. They are: fiscal discipline, oversight, and

results.

First, the cost of imposing fiscal discipline. Within hours of assuming office this past June, I initiated a line-by-line review of the

entire GSA budget. We had over $100 million deficit for fiscal year

2006. We had flunked our annual audit. The revenue from fiscal

year 2005 to fiscal year 2006 had plunged by over $4 billion. Morale was low, and there was talk of mandatory buy-outs.

I had three goals: eliminate sources of wasteful spending, apply

oversight equally to all divisions within GSA, achieve results by encouraging GSA employees to innovate, improve GSA performance,

and save taxpayer money. These were priorities I had identified in

my confirmation hearing.

We identified and eliminated non-performing programs. We

hacked unnecessary travel to places like Australia and Kuala

Lumpur. GSA divisions cut spending by 9 percent, and we didn’t

even have to touch employee salaries. It was with great pride that

we submitted a budget to OMB with retroactive cuts for fiscal year

2006, fiscal year 2007, and even proposed cuts in fiscal year 2008.

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GSA employees knew the sources of wasteful spending, and they

were elated to know that under me there were no sacred cows.

Today, through the hard work of our GSA team, our morale has

improved. GSA was recently ranked as one of the top 10 best

places to work in Federal Government. We have a balanced budget.

And we got a clean audit.

I am really proud of the transformational changes made to the

GSA’s schedule process, where we just awarded our first GSA

schedule within 30 days of the application. Only 10 months ago the

average time was 157 days.

The fast reorganization is successfully underway, and GSA has

turned around and created a positive relationship with the Judiciary and the Department of Defense, and these are our two biggest

customers.

We did all of this in 10 months. Bold, new leadership was what

the President wanted, and that is exactly what he got at GSA.

The early fiscal discipline is now yielding improved performance,

but I am going to tell you change is difficult, and not everyone

wants to improve. Some cling to the old and refuse to cut spending

and will do anything to protect bureaucratic turf, and this is what

happened at GSA. I believe the Office of the Inspector General may

have been angered by any suggestion that their operations could be

improved or that any spending could be cut.

I probably should have predicted what followed: investigations

intended to intimidate were launched, but never ended, and the

old-fashioned squeeze was on. I refused to yield, and I still believe

that my actions were right, but I am going to tell you I am not a

perfect person. I make mistakes, and honestly I am probably going

to make a few more, but there was no wrongdoing.

In Washington, it seems to me that budgets are fiercely protected, but that sometimes these legitimate policy disputes cross

the line and become personal attacks, and I believe that this is

what happened to me.

Mr. Chairman, you do not face the Administrator of GSA but the

full fury of an absolutely angry Mom when someone from this committee alleges that 3 years ago there was some wrongdoing involving my then–14-year-old daughter who participated in a mandatory, school-wide community service program as an intern to Senator Debbie Stabenow 3 years ago, long before I entered public office. I am sure you know Senator Stabenow, and I am sure you

know that she would never do anything that is wrong.

I know that this attack was probably inserted in the invitation

by a too-eager staffer who thought that bloodsport involving children was acceptable. To that committee staffer who thought that

attacking one of my kids would be fair game, let me tell you directly, shame on you. Shame on you for getting so caught up in the

give-and-take of politics that you lost your sense of decency and

fair play and let partisan passions overwhelm good judgment.

Shame on you for not thinking through the terrible and unintended

consequences on good people everywhere interested in public service.

You know, like Jimmy Stewart in Mr. Smith I stand here. I am

going to be honest. I am facing a gazillion allegations, but the curious thing is that all of these allegations stem from a single source,

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and all of them became public as a direct result of my attempts to

impose fiscal discipline throughout GSA.

I knew that when I moved to restore fiscal discipline and bring

some sunshine to poor managerial practices that I was going to be

in for a lot of criticism, but I was surprised by the scandalmongering involving attacks on children, that I now have hate mail

sent to my home, and am vilified in the national media.

The time to focus on the facts has come and the political points

that can be scored from trumped-up charges put away. When you

examine my testimony—and I hope that you will take the time to

read it. I know it is a little lengthy—I hope that you will see that

each of these different allegations and attacks on my character are

groundless, that I did not interfere, and that I was simply exercising my right as Administrator to know what was going on at the

GSA.

But I think that this hearing is important for two other far more

important reasons. The first regards wasteful spending. I think

that what we say and what we do here today could set the tone

for how other Federal agencies look at oversight and accountability

and how aggressive they are to be in identifying and eliminating

specific causes of wasteful spending.

GSA, as far as I know, was the only Federal agency that submitted a budget that voluntarily called for retroactive cuts to its budget. It took courage to do that, but I fear that if it becomes common

practice for agency heads to face a never-ending barrage of personal attacks for doing so, that you can be sure that no such effort,

it is never going to be made again.

Second, this hearing could possibly, it seems to me, set the atmosphere for how we approach the issue of oversight. Much of my

testimony deals with my determination to extend oversight and accountability equally throughout GSA divisions, including the Office

of the Inspector General. Those of us in Government, we have a

great opportunity to begin an important dialog that has, at its core,

two questions: first, is oversight something that applies equally to

all spending decisions? Or should oversight and accountability only

be applied to selected Government organizations or programs?

I thank you for this opportunity. I look forward to answering

your questions. I hope that I will give you a chance to get to know

me just a little bit better.

Thank you.

[The prepared statement of Ms. Doan follows:]

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Chairman WAXMAN. Thank you, Ms. Doan, for your statement to

us.

Without objection, we will now proceed with the chairman and

the ranking member controlling 15 minutes of time, and I yield 5

minutes to the gentleman from Iowa. I was only going to yield him

5 minutes, but I will yield 15 minutes to the gentleman from Iowa,

Mr. Braley.

Mr. BRALEY. Thank you, Mr. Chairman and Ranking Member

Davis.

Good morning.

Ms. DOAN. Good morning.

Mr. BRALEY. Let’s begin by reviewing what GSA does and what

its mission is. GSA is a Government agency that manages Federal

buildings, buys equipment and supplies, and works with other

agencies to purchase goods and services. As the chairman noted,

the impact of this service is huge, because the GSA helps manage

nearly $500 billion in Federal assets.

According to GSA’s Web site, its core mission is to help Federal

agencies better serve the public by offering at best value superior

workplaces, expert solutions, acquisition services, and management

policies.

I assume you would agree with the mission statement that is

posted on the Web site?

Ms. DOAN. I do, although I will tell you we are improving it, because we are just finishing our new strategic plan.

Mr. BRALEY. But I assume that you would agree with it as it is

currently stated?

Ms. DOAN. Yes.

Mr. BRALEY. And do you also agree that the GSA’s core mission

does not include engaging in partisan political activity?

Ms. DOAN. I do not think that any Government agency should be

engaging in partisan political activity.

Mr. BRALEY. Let’s talk about the meeting that you referenced in

your opening statement on January 26, 2007. I believe most people

rightly assume that the GSA’s mission is not political, just making

sure that Government buildings are well-built and well-maintained

and that Federal employees have the resources and supplies they

need to do their job. But on January 26, 2007 you held a meeting

at GSA headquarters that raised serious concerns about possible illegal political activity, and I want to ask you about that meeting.

It is our understanding that the meeting occurred at GSA headquarters on Government property. We have been told that you

were there as the highest-ranking GSA official, and your chief of

staff, John Phelps, was there, as well as dozens of other political

appointees working at GSA. Overall, there were nearly 40 Republican political appointees who joined the meeting either in person

or through a video conference.

The committee has been told that the reason for this meeting

was to hear a presentation from Scott Jennings. Scott Jennings is

Karl Rove’s deputy at the White House. He is the deputy director

of political affairs for President Bush. Is that correct so far?

Ms. DOAN. No it is not.

Mr. BRALEY. And what was not correct about that statement?

Ms. DOAN. John Phelps did not attend that meeting.

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Mr. BRALEY. And did not participate by phone?

Ms. DOAN. And did not participate by phone.

Mr. BRALEY. And was not involved in any way in the meeting?

Ms. DOAN. To my knowledge, he was not in any way involved in

the meeting.

Mr. BRALEY. The committee has been informed that Mr. Jennings gave a PowerPoint presentation at the meeting. Were you

aware of that?

Ms. DOAN. Yes.

Mr. BRALEY. And we have been told that he discussed the 2006

elections during that presentation. Would you characterize his

presentation as a purely factual presentation about the results of

the 2006 election?

Ms. DOAN. I am a little bit embarrassed to admit this, but I can

say that I honestly don’t have a recollection of the presentation at

all.

Mr. BRALEY. Well, I assume that, given your past experience, you

have sat through PowerPoint presentations before?

Ms. DOAN. I have sat through——

Mr. BRALEY. And that during PowerPoint presentations, information is projected in slides, and usually those slides are reviewed by

the person making the presentation to reinforce verbally the visual

images that are displayed on the slides?

Ms. DOAN. Oftentimes they are.

Mr. BRALEY. Is that your general understanding of what took

place on this date?

Ms. DOAN. Yes. I believe that is true. I believe there were

PowerPoint slides, and I believe Scott Jennings did speak.

Mr. BRALEY. The committee has obtained a copy of the presentation that Mr. Jennings gave at your office, and I would like to

ask you about the topics that he discussed with the staff. At this

time I would ask the staff to put up slide 555, which is the first

cover slide for the PowerPoint presentation, showing that this was

prepared by the White House Political Office headed by Karl Rove.

That is what the cover slide says; is that correct?

Ms. DOAN. Yes. I am looking at the one you gave me.

Mr. BRALEY. And then let’s look at slide 578. This is a slide that

has at the top 2008 House Targets, Top 20. Do you see that?

Ms. DOAN. I do.

Mr. BRALEY. And there can be no dispute, from the content of

this slide, that this slide is depicting Republican targets that identify Democratic seats that are vulnerable in 2006. Isn’t that what

it says?

Ms. DOAN. I’m reading. It says House Targets, Top 20.

Chairman WAXMAN. It shows 2008.

Mr. BRALEY. Yes. And it shows, District by District, the individuals, what the percentage of that District was in the 2004 election

and what percentage that particular Democratic candidate received

in the 2006 election; correct?

Ms. DOAN. Yes. Honestly, I have not seen this chart until yesterday. I don’t remember. I mean, I really, truly don’t remember seeing this chart until yesterday, when I tried to dig it up, and I have

to say I don’t know what the explanation was that accompanied

this. I truly do not remember this part of the presentation.

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Mr. BRALEY. Well, you are familiar with what the word target

means, right?

Ms. DOAN. I think we could say that I am one right now, yes.

Mr. BRALEY. Yes. And what this means is that the Republicans

are trying to target these seats to win them back in 2008. That was

what was discussed at the presentation.

Ms. DOAN. I appreciate your interpretation of that.

Chairman WAXMAN. If the gentleman would yield for 1 minute,

I just want to verify, did you know that your office supplied this

chart to us?

Ms. DOAN. Yes, I did, but I did not review the actual data. There

was different groups that were involved in this, since this was not

my meeting. I did not convene it. I didn’t run the agenda of it. I

didn’t invite Speaker Jennings, Scott Jennings, to the meeting. I

actually didn’t have any involvement in it. The group that was involved in that, they prepared that submission for you.

Chairman WAXMAN. You were just there, though?

Ms. DOAN. I attended the meeting. Yes, I was there.

Chairman WAXMAN. OK. Well, I am going to let Mr. Braley continue.

Ms. DOAN. Yes.

Mr. BRALEY. You would agree that a reasonable interpretation of

this slide is that it was a political attempt to try to target the top

20 Democratic candidates for defeat in 2008?

Ms. DOAN. No, I would not say that. I would say that this is a

slide that says 2008 House Targets, Top 20. I do not want to try

to speculate on what was intended by Mr. Jennings on the slide.

I really think you have to ask him.

Mr. BRALEY. Well, I think reasonable people interpreting and

viewing this material can probably get a pretty good understanding

of what Mr. Jennings was doing there.

The next slide I would like to talk about is slide 579. This is a

slide that has as a heading, 2008 House GOP Defense. Have you

seen this slide before?

Ms. DOAN. I saw it yesterday is when I remember. I’m sure I

probably, possibly saw it during the meeting. I don’t remember it

during our meeting, but honestly, as I said before, I don’t really remember the PowerPoint presentation very clearly during that

meeting.

Mr. BRALEY. And this slide lists a number of vulnerable Republican House seats that are being targeted for protection in the 2008

congressional elections; isn’t that a reasonable conclusion that you

can draw from this slide?

Ms. DOAN. Congressman, I will accept your explanation of it.

Mr. BRALEY. And then, if we look at slide 581, this slide has the

caption, Battle for the Senate, 2008, and identifies potential pickup

opportunities, one category described as Republican offense listing

six States, one category described as Republican defense listing

eight States, and then listing other noncompetitive States. Do you

agree that a reasonable person interpreting what is contained on

this slide could conclude that these are targeted Senate seats that

the Republican White House is trying to protect or pick up?

Ms. DOAN. Senator, I will accept your interpretation of this slide.

I mean, I’m sorry, Congressman. A promotion.

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Mr. BRALEY. I am very proud of my title as Congressman, so

thank you.

Ms. DOAN. Demotion. I’m sorry. I’m not even going to get into

that, guys.

Mr. BRALEY. Can you tell us what, if anything, these slides have

to do with the GSA’s core purpose of procuring supplies and managing Federal buildings?

Ms. DOAN. This brown bag luncheon I believe has been

mischaracterized. This is a meeting that is a team-building meeting that is hosted by our White House liaison, a GSA employee, a

non-career employee, and it is hosted every month. I try to attend

whenever I can. Occasionally I realize I am late either coming in

or leaving early, but I do try to be supportive. We look upon this

as team-building. We have had a variety of speakers who speak in

whatever their particular area of expertise is. That is what we do

in these luncheons. I am trying to build a superior management

team at GSA, and any kind of team-building activities that I can

do, I——

Mr. BRALEY. With all due respect, Ms. Doan, I don’t believe you

answered my question, which was——

Ms. DOAN. I’m sorry.

Mr. BRALEY [continuing]. To ask what these slides had to do with

the GSA’s mission.

Ms. DOAN. I’m sorry.

Mr. BRALEY. I think the answer to my question is clear. This was

a partisan political briefing. It occurred on GSA property during

work hours and had nothing to do with the GSA mission. You identified team-building as one of the purposes of this meeting. Can

you explain to the taxpayers of this country how holding this partisan political briefing helped with team building?

Ms. DOAN. As I had said a little bit earlier, this is a brown bag

lunch. It occurs on the lunch hour of our non-career employees.

This is not my slide presentation. And I really do ask you, if you

need to have an accurate interpretation of what that PowerPoint

slide presentation means, please, you know, I would ask you to ask

Mr. Jennings. This is his product and he was a guest at our meeting.

Mr. BRALEY. Well, when the presentation begins with the White

House Office of Political Affairs on the cover slide and the slide

presentation has multiple references to the Republican’s wanted,

72 hour get out the vote effort, and its impact on a host of different

congressional races, which is what is contained on the other slides

that are in this presentation, I think the American taxpayers have

a very good reason to wonder whether the only team that was

being helped during this briefing was the Republican party team.

The Federal Hatch Act says you can’t use the workplace to engage

in team building for any political party.

You have suggested that this wasn’t intended to have a partisan

purpose in your presentations, and yet the committee has been informed by multiple sources that after Mr. Jennings finished his

presentation, you took the floor, thanked him, and then posed a

question to the entire group of participants. And, according to those

sources, you stated, ‘‘How can we use GSA to help our candidates

in the next election?’’

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Now, reminding you that you are under oath, can you tell the

committee whether, in fact, you did make that statement?

Ms. DOAN. I do know that I am under oath, and I will tell you

that honestly and absolutely I do not have a recollection of actually

saying that.

Mr. BRALEY. The committee has interviewed and deposed witnesses who participated in the briefing, and these were not the

type of off-the-record discussions the White House is currently recommending in the Attorney Generals investigation. One of those,

Justin Bush, is a Republican political appointee at GSA, and he is

quoted as saying that your comment was, ‘‘How can we use different GSA projects, building openings, and the like to further aid

other Republicans.’’ Do you have any reason to doubt Mr. Bush’s

memory?

Ms. DOAN. Honestly, I have told you I do not have any recollection of saying that, but I do know, I have been brought to understand that there is actually a difference of opinion among the

attendees about what exactly was said.

Mr. BRALEY. Well, another attendee, Jennifer Millikan, is the

Deputy Director of Communications at GSA and also a Republican

appointee. She stated that you said, ‘‘How we could help candidates.’’ Do you remember saying that?

Ms. DOAN. I have no recollection of saying that.

Mr. BRALEY. Do you disagree with your own press person that

comment was made by you?

Ms. DOAN. Congressman——

Mr. BRALEY. A comment about helping candidates, our candidates?

Ms. DOAN. Congressman, I don’t know how many times I have

said this, fourth or fifth time, but I will repeat again that I cannot,

I do not recollect this. I honestly and absolutely have no recollection. But I will tell you that the IG has requested an investigation

from the Office of the Special Counsel into this matter. That investigation, to my knowledge, is still open. It is currently running. We

at GSA, I, in particular, we are cooperating fully, and I would actually ask you to please allow the investigation to run its course.

Mr. BRALEY. Well, part of our function here is to perform congressional oversight, which by its very nature includes investigation. That is the purpose we are here today.

Another attendee, the Chief Acquisition Officer of your agency,

Emily Murphy, also a Republican political appointee, said that at

the meeting you stated, ‘‘How can GSA help our candidates or help

position our candidates.’’

Her assistant, Kristyann Monica, backs up her account and says

that you said, ‘‘How can we help our candidates in the next election.’’

We also have a statement from Matthew Sisk, the Special Assistant to the Regional Administrator for Massachusetts, likewise a

Republican political appointee, as well as Michael Burkholtz, a

Senior Advisor to the Chief Acquisition Officer at GSA. These are

not partisan Democrats attacking you, as you have alleged. These

are statements from six different Republican appointees who work

at GSA, and they all told us the same thing about your making express reference to political comments during this meeting.

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Do you think all of these people are lying?

Ms. DOAN. I cannot answer for them. I can only answer for myself, and I will tell you that I honestly have no recollection of making that statement.

Mr. BRALEY. Giving you one last chance to clarify the record, I

am going to ask: did you ever make the statement, ‘‘How can we

use GSA to help our candidates in the next election,’’ or words to

that effect?

Ms. DOAN. Congressman, I cannot recollect making that statement.

Mr. BRALEY. The reason this is so important to me is because

you directed comments to staff of this committee and you said,

‘‘Shame on you for getting so caught up in the game of politics that

you let partisan politics affect your judgment.’’ Turning that mirror

around, Ms. Doan, I think there are people on this committee who

wonder whether the same statement could apply to you, in light of

what these Republican political appointees have testified you said

during this meeting on GSA property with GSA employees in attendance. Can you understand that concern?

Ms. DOAN. I do not believe that there were any 14 year olds at

that meeting.

Mr. BRALEY. You don’t believe that you could be perceived as

having participated in a meeting where partisan political politics

was the main subject with GSA employees in attendance on GSA

property and asking a question which you cannot recall where you

talk about helping our candidates, how that could be perceived as

maybe being possibly clouded by partisan political judgment?

Ms. DOAN. I do not believe that this was an inappropriate meeting. I believe that all around Government there are non-career employees who meet to discuss different ways to advance policies and

programs of the administration. But that is not the same as asking

Federal employees to engage in partisan political activities in the

workplace. I simply do not have any recollection of ever saying

that.

Chairman WAXMAN. The gentleman’s time has expired.

Mr. BRALEY. Thank you.

Chairman WAXMAN. I am now going to yield to Mr. Davis, but

one quick question on this whole thing.

It was a brown bag lunch for those who were there, but this was

a teleconference, and even people as far away as California were

participating in this meeting; isn’t that correct?

Ms. DOAN. That is true.

Chairman WAXMAN. Thank you.

And Mr. Davis?

Mr. DAVIS OF VIRGINIA. And the White House called this, right?

This is what they do on a regular basis, where they like to get together with their Schedule C’s?

Ms. DOAN. Yes, it is.

Mr. DAVIS OF VIRGINIA. How often do these occur at GSA?

Ms. DOAN. Usually they occur monthly.

Mr. DAVIS OF VIRGINIA. OK.

Ms. DOAN. And they are convened and arranged by our White

House liaison.

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Mr. DAVIS OF VIRGINIA. So the White House liaison, basically,

the White House says we want to talk to our Schedule C’s. These

are employees who serve at the pleasure of the President?

Ms. DOAN. Right. We have a requirement to try to advance the

policies of the administration and execute them and make these

initiatives successful.

Mr. DAVIS OF VIRGINIA. Now, you didn’t see these slides ahead

of time, did you?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. You didn’t help prepare these slides, did

you?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. You had no idea what they were going

to say, did you?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. In fact, you weren’t even paying attention, it sounds like.

Ms. DOAN. It is embarrassing to admit it, but it is true. If I could

just say, it was a very busy week for me. I had received a letter

from the committee. We were in the middle of preparing all of the

document requests.

Mr. DAVIS OF VIRGINIA. But when the White House does these,

they like the agency heads to be there?

Ms. DOAN. I try. I think it is important for my employees to see

that I am engaged in all aspects of GSA and I do try, even if I have

to leave early or come late.

Mr. DAVIS OF VIRGINIA. Now, we are told by some witnesses,

there are some witnesses that say you said something, some that

say you didn’t, and it was a long time ago, but did anybody at any

point say these were inappropriate subjects, or somebody said we

should move away from this? Do you remember any of that?

Ms. DOAN. I really do not remember anything about this meeting.

Mr. DAVIS OF VIRGINIA. OK. But you don’t deny what people are

saying? You are not denying——

Ms. DOAN. No, I’m not denying what they are saying; I’m simply

saying there were cookies on the table, I remember coming in late,

I remember we had, it seemed like, quite a few people who were

actually missing.

Mr. DAVIS OF VIRGINIA. Well, let me just ask you this: when

there are building openings and the like, it is the policy, and is it

your policy and the GSA policy that incumbent Members of Congress from both parties be invited to those events?

Ms. DOAN. Absolutely. GSA has an incredible record on this. We

have Federal buildings, we have courthouses, and we have traditionally and consistently invited all members of State congressional

delegations.

Mr. DAVIS OF VIRGINIA. There was no conversation about excluding Democrats or excluding one party from any of these openings,

was there?

Ms. DOAN. Absolutely not. In fact, we try to get everyone to

come, and if any of you have not been to a building opening—I see,

Congressman Higgins, you will have an opportunity certainly at

the Buffalo Courthouse in a few years—but if you have an opporVerDate 11-MAY-2000 14:07 Feb 04, 2008 Jkt 000000 PO 00000 Frm 00157 Fmt 6633 Sfmt 6633 C:\DOCS\40153.TXT HGOVREF1 PsN: HGOVREF1
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tunity to come to one of our building openings, they are incredible

things. You can see the truly splendid work that we do at GSA. I

think we are really proud of that, so we invite everyone.

I think, if you look at my actions, you will find that I have spent

an enormous amount of time in outreach activities and responding

to Democrats in the last——

Mr. DAVIS OF VIRGINIA. Ms. Doan, what I gather is this is a presentation that the White House was giving to Schedule C employees. You obviously had a lot of other things on your mind. You

didn’t call the meeting. You didn’t approve the slides. You didn’t

even know what they would talk about——

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA [continuing]. In a general sense. And you

said, ‘‘Well, what can we do?’’ Is that basically the gist of what I

understand the majority is saying? You look and they are saying

this is somehow illegal violation, they want to run you out of town.

Ms. DOAN. Honestly, I don’t even remember that.

Mr. DAVIS OF VIRGINIA. I understand.

Ms. DOAN. I know you are trying——

Mr. DAVIS OF VIRGINIA. I think this goes on every day. It happens in Republican and Democratic administrations. This was during the people’s lunch hours?

Ms. DOAN. Yes, it is.

Mr. DAVIS OF VIRGINIA. And generally their lunch hours are free

for people to do—you don’t regulate what people do during their

lunch hours?

Ms. DOAN. Well, we don’t even regulate what time your lunch

hour is. Usually you can take your lunch hour whenever you want.

Mr. DAVIS OF VIRGINIA. Some Members came during their lunch

hour to do this, and the allegation, I think, from the other side is

that somehow, because there was a video conference to listen to the

White House, that somehow you are to blame. You didn’t arrange

this? This came at the request of the White House?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. Thank you. Thank you very much.

Chairman WAXMAN. For the record, in California it is not lunch

hour, so somebody is videoconferencing this in California. While it

is a lunch hour here, it is early morning there.

Mr. DAVIS OF VIRGINIA. They might be having an early lunch,

Mr. Waxman.

Ms. DOAN. That is true. In fact, you could take your lunch whenever you choose, so if you wanted to arrange your day differently

or if you were on——

Mr. DAVIS OF VIRGINIA. Well, I guess if they really want to pursue this they can go back to the time slips——

Ms. DOAN. Yes.

Mr. DAVIS OF VIRGINIA [continuing]. And they could just see if

somebody took an 8 a.m. lunch and a 12 lunch, and maybe they

can find some act of genocide there that they can hang some Schedule C on, as well.

Let me go ahead to SUN Microsystems, because there have been

a lot of allegations on it. I mean, this has happened. I have been

in this town a long time. I worked in the Nixon White House. You

know, this is a political town, and these are political appointees,

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and there is no allegation here that there were any actions taken

by GSA to retaliate against anybody. We just finished one election

there weren’t even candidates in these races. So it has to be put

in perspective, and it just shows how desperate they get to focus

on some meeting that was called by the White House that you attended and some statement. There are variations, if everyone will

read the record, in terms of what people recollect you saying and

other people saying at that point.

Now, on the SUN Microsystems issue, a lot was made of that

from Senator Grassley over here, and he clearly wasn’t that familiar with the fact that this is basically a license to hunt, that all

SUN Microsystems was trying to do or you were trying to do is

keep them on the GSA schedule; is that correct?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. Now, because you were on the GSA

schedule with certain prices, that isn’t necessarily the price the

Government pays, is it?

Ms. DOAN. No. In fact, we ask that any Government agency also

attempt to negotiate a lower price, and, of course, then they would

compete it probably with maybe two other or three other contractors.

Mr. DAVIS OF VIRGINIA. So that is a ceiling?

Ms. DOAN. Yes, that is the high end, and then you are trying to

drive the price down from there.

Mr. DAVIS OF VIRGINIA. And, in fact, often the prices that are negotiated, because once the SUN Microsystems or any company is

on the schedule, they have to compete with that ceiling price

against other companies to get the business; is that correct?

Ms. DOAN. Yes. This is all about competition.

Mr. DAVIS OF VIRGINIA. And SUN Microsystems is a big company, isn’t it?

Ms. DOAN. They are quite large.

Mr. DAVIS OF VIRGINIA. I mean, less than 10 percent of their

business is Federal, as I understand it.

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. So in the scheme of things, their numbers don’t rise or fall when they are doing business with the Government, unlike a lot of Government contractors; is that fair to

say?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. So they could, in theory, just walk away

from this. And who wins then? Give us your perspective about why

you felt it was important to try to keep SUN Microsystems within

the Government. And I just add, we have already heard Senator

Grassley testify that on Medicare Part D maybe the Government

can negotiate low prices in some areas, but there are other areas

where people walk, where pharmaceuticals walk and don’t offer

their products and don’t give the Government the opportunity.

That is similar to what could happen in this case. Just walk us

through your thought process of why you wanted to bring this to

a resolution one way or the other.

Ms. DOAN. SUN is a major IT vendor of really mammoth proportions. They are very important, especially connected to the Internet. Obviously, at least at GSA we use the Internet quite a bit.

156

GSA is the premier procurement agency for the Federal Government. Our job is to make sure that all different types of technologies, the most innovative, the most leading edge types of products and services are available to our Government community to

purchase. And so I feel that, as the Administrator of GSA, and certainly the Commissioner, I believe, of Federal Acquisition Service

would say, it is our obligation to make sure that we have the

widest array of products and services available to our Federal Government customers. And for that reason, if nothing else, it is really

important that we try to work with all of our many vendors to get

them on the schedule.

Mr. DAVIS OF VIRGINIA. Let’s assume for a minute that we had

gone the way of the IG and you just knocked them off the schedule,

so you are not getting on the schedule. And you had a Government

agency that wanted to buy a SUN Microsystems product, either for

continuity of operations or for some other reason, that they had the

product that met the Government’s particular need and they

weren’t on the schedule. How would that agency then go about buying the product, and what is the likely cost in that case vis-a-vis

buying off the schedule?

Ms. DOAN. Well, I probably would have to ask you to have Jim

Williams give you a lot more clarification on that, but I will tell you

that I think that the Government agency would probably, just in

a general way, be scrambling a little bit, because one of the neat

things about the GSA schedule is it is very easy to use. It is very

easy to get something immediately.

Mr. DAVIS OF VIRGINIA. But they could go out for a procurement

to try to——

Ms. DOAN. They could, but that would take a lot longer probably.

Mr. DAVIS OF VIRGINIA. Would it cost more, probably?

Ms. DOAN. It would certainly cost more, because you would also

have to then add into the cost the procurement officials who would

have to be involved, the statement of works, the source selection

committee.

Mr. DAVIS OF VIRGINIA. So there are good policy reasons for trying to keep them within the Government ambit on the schedules?

Ms. DOAN. Absolutely.

Mr. DAVIS OF VIRGINIA. Now, the IG has made a lot of the fact

that you mentioned that they might go to NASA soup. Could you

explain to us what NASA soup is—I’m familiar with it, but I’m not

sure other Members are—and what this would mean, not only to

GSA but to the costs to the American taxpayers?

Ms. DOAN. NASA soup is another Government-wide acquisition

contract. It is called a GWAC. This is a contract vehicle where

other——

Mr. DAVIS OF VIRGINIA. Similar to a schedule?

Ms. DOAN. It is similar to a schedule. They can provide goods

and services; however, usually the fee is quite a bit more that the

Government agency would pay on top of the cost of the product.

Mr. DAVIS OF VIRGINIA. So, as a general rule, it is your belief

that NASA soup is a more expensive vehicle for these than the——

Ms. DOAN. That has always been my belief, and I think I am

pretty well documented in the press for saying that.

157

Mr. DAVIS OF VIRGINIA. OK. And also there was a fee involved,

correct?

Ms. DOAN. Yes, there is.

Mr. DAVIS OF VIRGINIA. If an agency were to buy off NASA soup

instead of the GSA schedules, that fee would then go to NASA as

opposed to your agency, which was suffering budgetary constraints;

is that correct?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. That is an additional reason to try to

keep them within the ambit, if you could?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. Now let me ask you this. Did you personally appoint the contracting officers in this case to negotiate this?

Ms. DOAN. No. I did not even know who they were until I read

their name in Congressman Waxman’s invitation letter.

Mr. DAVIS OF VIRGINIA. Well, what was your role? Was your role

here just to try to get a decision, that this had been bubbling for

years, we were on extensions, which are generally more expensive

than negotiating a new contract, and you just wanted to get a resolution? What were your instructions to Mr. Williams, or whomever

you delegated this to?

Ms. DOAN. Well, it was Commissioner Williams, and it was very

simple. I think I was actually at a much higher level, Congressman

Davis. My job is simply to provide some managerial oversight into

the different processes at GSA. What I was interested in was making sure that we were getting the very best value for the American

taxpayer. I believe that having SUN Microsystems on the GSA

schedule is an important aspect of that. I simply turned to Commissioner Williams and I said, Could you look into this. He then

took it from there.

And we have some very, very competent and incredibly qualified

contracting personnel.

Mr. DAVIS OF VIRGINIA. But there had been an impasse before.

I mean, we had been looking into this for months.

Ms. DOAN. They were at a total impasse, and I think our contracting folks did just an extraordinary job of bringing this to conclusion.

We are very proud of the work that they have done. I am proud

of my employees.

Mr. DAVIS OF VIRGINIA. I understand that, and we can get into

it later. Obviously, IG has a different perspective on this.

Did you say cut a deal no matter what? Or did you just say let’s

bring it to a conclusion? That is important for us to know.

Ms. DOAN. I don’t remember saying cut a deal no matter what.

I do remember saying let us look into this and see what can be

done, something along those lines.

Mr. DAVIS OF VIRGINIA. So you were just trying to resolve a problem that had been ongoing for some time?

Ms. DOAN. Yes. I’m more about options. I am more about saying

what are our options, what can we do to try to make things better.

Mr. DAVIS OF VIRGINIA. I understand that the Federal Acquisition Service Commissioner, Jim Williams, informed Mr. Miller, the

IG, that a contracting officer was being intimidated by an IG emVerDate 11-MAY-2000 14:07 Feb 04, 2008 Jkt 000000 PO 00000 Frm 00161 Fmt 6633 Sfmt 6633 C:\DOCS\40153.TXT HGOVREF1 PsN: HGOVREF1
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ployee and asked him to look into it. Did you followup with the IG

about this complaint?

Ms. DOAN. Yes, I did. At one of our monthly meetings—this was

about a month after Commissioner Williams had brought that to

the Inspector General’s attention—I asked him in the meeting, I

said, ‘‘So, you know, whatever happened. I was hoping I would hear

from you on that.’’ And then I was told, in what seemed to me a

sort of lackadaisical manner, well, you know, I looked into it. Nothing was there, or something along those lines. I don’t want to try

to do a direct quote because I don’t remember.

Mr. DAVIS OF VIRGINIA. You don’t have a good relationship with

the IG, do you, in your agency?

Ms. DOAN. Not in the agency, but I think that it has been wildly

mischaracterized in the press. I think we have a budget dispute

that has now spiraled into other areas. I believe that the Inspector

General believes strongly in independence and oversight, and I

think the challenge there is that I do, too; it is just that I believe

all, even oversight, needs to have oversight.

Mr. DAVIS OF VIRGINIA. OK. Let’s go to another issue that has

been raised here, and that is on the Diversity Best Practices and

the contract with Ms. Fraser. Can you contract your relationship

with Ms. Fraser? She was a vendor. I mean, she bought from you;

isn’t that correct? Isn’t that how you knew her?

Ms. DOAN. Yes, that is true.

Mr. DAVIS OF VIRGINIA. And for diversity practices did you feel

that the services her company offered were some of the best in the

field?

Ms. DOAN. The work that Diversity Best Practices does is almost

unparalleled in the area of opening doors and providing opportunities for small, minority, women-owned, service disabled veteran

businesses. They have done extraordinary work over many, many

years.

Mr. DAVIS OF VIRGINIA. And you had used them in your own

company, right?

Ms. DOAN. Yes, I did.

Mr. DAVIS OF VIRGINIA. She never hired you for anything, did

she?

Ms. DOAN. No, she did not.

Mr. DAVIS OF VIRGINIA. You hired her?

Ms. DOAN. Yes.

Mr. DAVIS OF VIRGINIA. OK. Now, walk me through your thought

process in terms of this $20,000 purchase order that has been alleged. Was this purchase order, did any money change hands?

Ms. DOAN. There was no money that changed hands, no Government contract was issued, no deliverables.

Mr. DAVIS OF VIRGINIA. That may be a technical term whether

a contract was issued, but nothing was ever—as I understand it,

no money changed hands, no performance. This was nixed pretty

early on; is that correct?

Ms. DOAN. Yes.

Mr. DAVIS OF VIRGINIA. What was your thought process in moving forward with this? The IG in his report says you should have

known the thresholds. It intimates that you were trying to give a

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sweetheart deal to a friend. Why don’t you give us an explanation

of that, from your perspective and your thought process?

Ms. DOAN. GSA was failing in opening doors to small and minority businesses. We got an F on our score card from the SBA. Sadly,

it seems like there is a possibility it might have been well deserved.

I thought that doing a study of what we were doing with our outreach to small, minority, women-owned, and service disabled veteran businesses would reveal what are the things that we are

doing well, what are the things that we are doing poorly. And the

idea there is that, once you understand this from an objective

source, then you can make a decision to try to do more of one and

less of the other.

As I said in my statement, this is both a personal and a professional embarrassment to me.

Mr. DAVIS OF VIRGINIA. My time is running out.

Ms. DOAN. I’m sorry.

Mr. DAVIS OF VIRGINIA. The question is: why didn’t you compete

this out and go to a number of firms? What was your thought process in just giving it to this one company that you knew could do

the job?

Ms. DOAN. It is because they are the unparalleled expert in the

field of diversity studies. I signed what I thought was a draft outline, a service confirmation order. I moved it on. I thought I was

putting it through the processes. I thought it was going to be

turned into a purchase order, or whatever. What my job was to do

was to try to take action to show that I wanted to turn this around

and to move it forward. This is what I was trying to do.

The minute it was brought to my attention that this was done

in error, and that was when my chief of staff called me and said

it was not going to be able to happen, I said fine. They said they

issued a termination. They did. The whole timeframe from start to

finish was about 10 days.

Chairman WAXMAN. Thank you, Mr. Davis.

Mr. ISSA. Mr. Chairman, a point of parliamentary inquiry. What

time will our official lunch be and when will it begin, 11:30 or 12?

Chairman WAXMAN. Well, we are going to continue on with our

hearing.

I will now proceed in regular order with each Member being

called in order under the rules for 5 minutes. I want to recognize

the gentleman from Maryland, Mr. Cummings.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Ms. Doan, welcome to our committee. I must tell you that when

I heard your opening statement I was very impressed, but as I listened to your answers to Mr. Braley I became very concerned.

One of the things I am concerned about is your memory. You

just, in answer to Mr. Davis’ question, went back to the Edie Fraser contract. You were able to tell us all kinds of things about that.

That happened back in July 2006. Mr. Braley methodically and excellently asked you about an incident that happened 2 months ago,

and it is interesting to me that you don’t remember certain things

during that time. As a matter of fact, you seemed like you didn’t

remember much of anything, but yet and still you remembered

quite well the Edie Fraser contract situation. That concerns me.

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I must tell you that, you know, this committee has serious questions about whether you violated the Hatch Act, which prohibits

Federal employees from engaging in partisan politics at the office.

You received training on the Hatch Act several months before the

January 26, 2007, meeting, did you not?

Ms. DOAN. Yes, I did.

Mr. CUMMINGS. And under your understanding of the Hatch Act,

are you permitted to ask staff to help a particular candidate or particular party?

Ms. DOAN. No, I am not.

Mr. CUMMINGS. Ms. Doan, we asked the Congressional Research

Service, which is independent, about the incident at GSA headquarters on January 26th, and CRS told us that—well, CRS is a

nonpartisan research arm of the Congress, so you will be very

clear. We asked CRS about both the White House presentation and

about your alleged comments afterwards. You said you didn’t remember that 2 months ago. I know that.

In response, CRS issued a report which I would like to make a

part of the official hearing record.

Chairman WAXMAN. Without objection, that will be the order.

Mr. CUMMINGS. Thank you very much.

[The information referred to follows:]

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Mr. CUMMINGS. This is what CRS said. First, on the White

House slides that Mr. Braley referred to, CRS said that this presentation raises concerns ‘‘the sponsor or presenter is closely affiliated, identified with a partisan political campaign, invitations are

directed only to political employees of a Department, and the objectives and agenda of the program appear to have a partisan slant.’’

Doesn’t that describe what Mr. Jennings did to a T, as best you can

recall?

Ms. DOAN. Could you do each one of those? Do I have to answer

them all at one time?

Mr. CUMMINGS. Well, first of all, you said—let me go back.

Ms. DOAN. OK.

Mr. CUMMINGS. You said something very interesting. You said

that these meetings, these brown bag lunches, were for the purpose

of team building, and I assume that you want your entire team to

be built.

Ms. DOAN. Yes.

Mr. CUMMINGS. But these team-building lunches were only Republican appointees. So help me with that. On the other hand, you

then seem to take a position that, oh, you just kind of mosied in

late and didn’t remember the very essence of the presentation. So

it is sort of hard for me to ask you questions when you don’t have

a memory from 2 months ago. I am trying to refresh your recollection.

Ms. DOAN. Thank you, Congressman, and I appreciate your giving me the opportunity. I do want to try to make this clear to you.

First, as far as what you are considering my memory lapse, I

have to tell you diversity opportunities for small and women-owned

business, this is a passion for me. This is something I have dedicated years to. I love this. It is important. Of course I am going

to remember it.

I have to tell you polls and stuff like that, this isn’t my thing.

This isn’t what really motivates me or energizes me.

I had an incredible day on the 26th. I had the article in the

paper. I had the letter from the committee. I had just gathered together the group of folks who were going to assemble. And you

guys got some of these documents. It was a huge submission that

we gave to you all. This was our first time we had ever done it as

a team, you know, made a submission for Congress. There was a

lot going on.

I came in just a little bit late at the beginning of the meeting.

I apologized for coming in late. I didn’t need to. But, frankly, I had

a lot on my mind that day.

Mr. CUMMINGS. Well, the question is: isn’t team building important to you?

Ms. DOAN. Team building is important to me, but this was not

my meeting, and happily I didn’t—this was one meeting where I

did not have to take the lead. I could just sit back and coast on

that.

Mr. CUMMINGS. Do you believe from what you have seen so far

and heard so far that this was a violation of the Hatch Act based

upon what you learned from your lessons about the Hatch Act?

Ms. DOAN. Congressman Cummings, I am not trying to be, you

know, snappy or something with you, but I will tell you I am a

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businesswoman who is now in a Government job for her first time,

and I will tell you that I cannot make a judgment on this, but I

do know that the Office of Special Counsel is looking into this. I

know that they are experts on it. I know they are going to make

a decision, and I am going to live with it.

Mr. CUMMINGS. Knowing what you know now, would you do it

again?

Ms. DOAN. I think I would have to——

Mr. CUMMINGS. Would you invite a White House——

Ms. DOAN. Absolutely. A White House liaison invites all sorts of

people. We get people from personnel——

Mr. CUMMINGS. And have charts that talk about targeting? You

would do that, too?

Ms. DOAN. I think that we will probably review charts in the future. There is no doubt about that. I think everything that you do

you try to be better every time you do it. Certainly, especially given

the concerns of this committee, I do not want this committee to be

focused on these issues. We have important things we have to do

at GSA.

Mr. CUMMINGS. That is our job. That is our job.

Ms. DOAN. I know. That is why, as I said, we will do what we

have to to make sure that we have the confidence of this committee

in the future because we do have important things we are trying

to do at GSA. And I want you all to be working with me on it to

try to make things better.

Chairman WAXMAN. The gentleman’s time has expired.

Ms. DOAN. Thank you, Congressman Cummings.

Chairman WAXMAN. Did you need——

Mr. CUMMINGS. Just one question. Did you give $200,000 to the

GOP?

Ms. DOAN. I’m sorry? What?

Mr. CUMMINGS. Did you give $200,000 in contributions to the

GOP?

Ms. DOAN. Yes. I am happy to say that I——

Mr. DAVIS OF VIRGINIA. Mr. Chairman, are we going to have regular order?

Ms. DOAN [continuing]. Am a Republican and a supporter of the

party. I am proud of it. I am happy that we have President Bush

as our President. I think he is a great man in very troubled times.

I am not ashamed of this.

Chairman WAXMAN. Thank you very much.

The Chair would now recognize for 5 minutes Mr. Mica.

Mr. MICA. Let me yield just a moment.

Mr. DAVIS OF VIRGINIA. News flash. The President appointed a

Republican to head GSA. I mean, this shouldn’t surprise anybody.

And let me just say I assumed that this chart was given all over

town. It wasn’t given to me, but they probably gave this to all the

different agencies, and that may or may not be a good thing and

this committee is welcome to look at it, but I think to lay it on Ms.

Doan when you have every Federal agency holding meetings with

Schedule C, some of them weekly, monthly, she didn’t call this

meeting. I think we need to put it in perspective. What it tells me

is that they are bankrupt. They are going after personal items.

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They are bankrupt, so now they are going after a White House political presentation.

Mr. MICA. Thank you.

That is kind of interesting, to follow what the ranking member

said, that originally they went after her for this contract. When she

came in, didn’t you say that they were getting an F grade, or about

to get another one?

Ms. DOAN. That is true.

Mr. MICA. This is on diversity. This is some of the diversity of

racial employment practices at GSA?

Ms. DOAN. Philippe Mendosa, who is our Office of Small and Disadvantaged Business Utilization Administrator, came to me. It was

probably my sixth—I don’t want to give exact dates—5th or 6th

day on the job, and he told me that GSA was getting a failing score

from the SBA and what could we do. We were failing in our opportunities to provide outreach to small minority owned business, you

know, service disabled veteran businesses, HUD zone businesses,

just——

Mr. MICA. So that is the reason——

Ms. DOAN. You know it. I jumped on it. I was on it.

Mr. MICA. OK. As a Republican minority appointee, this was

something important to you, and that is why the $20,000 contract—how much does GSA let in contracts, $66 billion?

Ms. DOAN. Between $56 and $60.

Mr. MICA. And this is interesting, because I am going to follow

the IG, because I don’t like his performance. Grassley talked about

getting five fired. I may want to work with him on six, because I

am not liking the picture that I see in some of the leaks and things

that came out of the IG’s office to go after you, and they targeted

you. They targeted you because you just told us, in fact, that the

day that this occurred was the day you got the so-called political

action that was taken, and this conference call was taken the same

day that you got the inquiry from the committee?

Ms. DOAN. No, no. It wasn’t the same day. It was in the same

timeframe.

Mr. MICA. In the same timeframe?

Ms. DOAN. We were in the process of—yes, we were preparing

the submission.

Mr. MICA. That is the point I am making. And this was a fishing

expedition to get you, and what they are doing to you they are

going to try to do to other appointees, so this is a good warning for

folks. Someone who came out as a successful minority business person and took on GSA, she has been there 8 months, and they have

made this 8 months hell for her. Wouldn’t you agree with that?

Ms. DOAN. It has been challenging.

Mr. MICA. So look at the timeframe. Every part of the violations

under the SUN contract, all of that took place before you ever got

there. You came when? June?

Ms. DOAN. June 2006. June 1st was my 1st day on the job.

Mr. MICA. We have the record of when that took place, and you

were trying to—SUN, you said, was a very important component

to Government services throughout the Government.

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Ms. DOAN. We have 27,000 vendors, and I want to say, in case

it is on TV or something, all of my vendors are important and I

am grateful for your business.

Mr. MICA. All right. Again, on the video conference, which they

are trying to make a big deal out of, that was the Political Office

of the White House. Schedule C’s are what? Political appointees,

serve at the pleasure; is that correct?

Ms. DOAN. That is true.

Mr. MICA. And what are you?

Ms. DOAN. I am a proud political appointee.

Mr. MICA. OK. Approved by——

Ms. DOAN. By the President of the United States. Yes.

Mr. MICA. And the Senate?

Ms. DOAN. And I am Senate confirmed. Yes.

Mr. MICA. Now, again, this is a fishing expedition. I have never

seen anything like it, and targeting. So they couldn’t find anything

on the $20,000, and it wasn’t a contract. It was never a contract.

Was it a contract?

Ms. DOAN. There is a lot of debate back and forth as to whether

it was.

Mr. MICA. Was a contract let? Was a contract let? Answer me.

Ms. DOAN. No, it was not. And I will tell you——

Mr. MICA. OK. There was no contract let?

Ms. DOAN. Could I say one thing, Congressman? People always

say, you know, you did a lot of business with the Government. How

come you really couldn’t tell the difference? And one of the things

I would like to show you, if you don’t mind, is this is what I signed.

It was a service order. Attached to it was a draft outline of the

study, what we were going to do, trying to open doors and opportunities. This is what I am used to seeing as a Government contract.

This is a standard form 33 that usually is the Section A, the front

page of every Government contract. It requires the signature of a

contracting officer. This is what I am used to seeing. This is what

I call a Government contract. The service order to me, I am trying

to move this study forward.

Mr. MICA. And some of this appears that this is where you initially rubbed the wrong way with the Inspector General’s Office. Is

this where the edict came down?

Ms. DOAN. No. Actually, I think it started pretty much in my

first week or second week in the job where he asked me for——

Mr. MICA. You added to the——

Ms. DOAN. No, no. It was a totally different thing. He asked me

for basically additional SES slots, which would have taken all the

ones that we had, and at the time we were trying to hold them for

the fast reorganization, so I think we got off to a little bit of a bad

start there.

Chairman WAXMAN. The gentleman’s time has expired.

I recognize Ms. Watson for 5 minutes.

Ms. WATSON. Ms. Doan——

Ms. WATSON. I have one additional question. Can I ask that, or

does the minority——

Mr. DAVIS OF VIRGINIA. Do it on our time.

Ms. WATSON. Retrieving my time, Ms. Doan, the political activities of GSA seem to be part of a much broader and more troubling

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trend throughout the entire Federal Government under this administration. We have learned, for example, how the White House and

the Attorney General politicized the hiring and firing of U.S. Attorneys—that is going on right now, that debate—and our Nation’s

top law enforcement officers. In fact, we now know that Karl Rove’s

deputy, Scott Jennings, was involved in both scandals.

This is not the only example. There have been civil rights enforcement at the Justice Department, and they have been undermined by political appointees; drug approvals at the Food and Drug

Administration have been based on political calculations, not the

best science; intelligence was twisted by White House officials to

build a political case for war in Iraq; and not many people realize

this, but there are now more political appointees working in this

administration than in any time in our Nation’s history.

Now, Ms. Doan, I know of your political activities, and I know

of your donations, and it is fine to be politically active. It is your

right and your obligation as a citizen, and we understand that. But

we have to maintain the rule of law. When you become a Government employee and when you become responsible for thousands of

Government employees, then you have a heavy new responsibility.

You can’t turn that agency into a political tool. When this was

held up and you said that you did not remember hardly anything

in it, that you came late and you had to leave, you have a heavy

week, it is like turning your head away from political activities

under your responsibility.

My concern is that what has happened at the GSA may be happening at other agencies throughout this Government, and we

surely see signs of that. So, Ms. Doan, do you know whether Mr.

Jennings gave this presentation at any other Federal agencies?

Ms. DOAN. I don’t know anything about that.

Ms. WATSON. OK. But he did give it at yours?

Ms. DOAN. Yes.

Ms. WATSON. OK. Do you think he prepared this just for the

GSA? Or is it more likely that he adapted something he already

had?

Ms. DOAN. Congresswoman, I have no idea. I think you really

would have to ask Mr. Jennings that question.

Ms. WATSON. OK.

Chairman WAXMAN. Would the gentlelady yield to me?

Ms. WATSON. I will yield, Mr. Chairman.

Chairman WAXMAN. It sounds like it is not just GSA, because the

way the Republicans on our committee say it is just routine practice, it is done everywhere, well, I think we ought to find out if that

is the case, because it is a violation of the Hatch Act. Thank you.

Ms. WATSON. Yes. I hope that he didn’t just target your agency

to hold you responsible for politicizing whatever goes on at GSA in

your agency, and why did he choose you, so I have some suspicions

there.

Ms. DOAN. I cannot possibly speculate.

Ms. WATSON. I know. I am not asking you to. I am stating an

opinion for what I heard.

Ms. DOAN. OK. I’m sorry.

Ms. WATSON. And I don’t think that this presentation is just tailored to GSA. Instead, it reads like a presentation that might have

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been given to other agencies across the Government, and I think

that this committee has the authority and the right to have oversight. Why did they choose your agency to make this presentation?

This is clearly targeting Democrats to take their seats. Clearly,

that is the purpose of this.

Chairman WAXMAN. Would the gentlelady yield?

Ms. WATSON. I will yield, Mr. Chairman.

Chairman WAXMAN. The last few seconds she has.

You said politics is not your passion.

Ms. DOAN. No, no. I did not say that.

Chairman WAXMAN. But you gave $200,000——

Ms. DOAN. I said polls, polls.

Chairman WAXMAN. I see. But politics is one of your passions.

You gave——

Ms. DOAN. Politics should be the passion of every American citizen.

Chairman WAXMAN. Yes.

Ms. DOAN. This is what makes our country run.

Chairman WAXMAN. Great. You gave $200,000 to the Republican

Party and you spoke at the Republican National Convention; isn’t

that accurate?

Ms. DOAN. If I could just——

Ms. WATSON. I am going to reclaim my time.

Chairman WAXMAN. Regular order. You don’t have any.

Ms. WATSON. Sorry. I am going to reclaim my time.

Chairman WAXMAN. You don’t have any time.

Ms. WATSON. You cannot tell me that, and would you please let

me reclaim my time.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, can we have regular

order.

Ms. WATSON. How much time do I have?

Chairman WAXMAN. Without objection, we will extend a courtesy

to the gentlelady for 1 additional minute, and we will do the same

for other Members.

Ms. WATSON. Thank you very much. I am trying to make a point

here. I think, Ms. Doan, your agency has been targeted and you

have been used to spread White House politicizing in your Department. I am so pleased that we are doing what we should do, and

that is to have these oversight hearings to hear where there are

violations of our laws, rules, and regulations.

Thank you so much, Mr. Chairman.

Chairman WAXMAN. Thank you, Ms. Watson.

Mr. MICA. Mr. Chairman, just an inquiry. Parliamentary inquiry.

Chairman WAXMAN. What is your parliamentary inquiry? Yes,

please?

Mr. MICA. Parliamentary inquiry is you just granted 1 additional

minute to the majority side. Is this a new change in policy, and can

I obtain 1 additional minute on the minority side?

Chairman WAXMAN. Well, you had 5 additional minutes that

other Members didn’t have, and I asked without objection she be

given another minute, and I would hope if a Member——

Mr. MICA. Well, if it wouldn’t be granted to me could it be granted to another——

Chairman WAXMAN. I will now recognize——

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Mr. MICA. If we could have——

Chairman WAXMAN. The regular order is Mr. Issa, who is now

recognized.

Mr. MICA. The committee is responsible for investigations and

oversight. Are we going to be equal in conducting investigations

and oversight or are we going to give the majority——

Chairman WAXMAN. Your point is——

Mr. MICA [continuing]. Additional time and not the minority? I

want that question answered.

Chairman WAXMAN. Oh, please.

Mr. MICA. I want the question answered.

Chairman WAXMAN. Oh, please. If someone asks for

additional——

Mr. MICA. This is one of the most important committees in the

Congress, and——

Chairman WAXMAN. Do you want the question answered or do

you want to speak?

Mr. MICA. Investigations and oversight, and are you going to

grant special consideration to their side of the aisle and not to this

side of the aisle? Now, I chaired for 10 years——

Chairman WAXMAN. Does the gentleman wish an answer, or does

he wish to talk?

Mr. MICA. And I chaired two of the subcommittees in this committee, Civil Service and——

Chairman WAXMAN. The Chair will now recognize——

Mr. MICA [continuing]. And also Criminal Justice——

Chairman WAXMAN. The gentleman is using his time.

Mr. MICA. I never, never denied the opportunity for a minority

Member or cut them off in questioning, and I expect the same courtesy for my Members. What is the policy? This is a parliamentary

inquiry in procedures, the conduct of one of the most important investigative committees of the U.S. Congress that dates back its

function to the early 1800’s.

Chairman WAXMAN. The gentleman stated a parliamentary inquiry and the Chair is prepared to answer his parliamentary inquiry. Under the rules, Members are given 5 minutes for questioning. By unanimous consent an additional minute may be given.

Under the rules, we ask that only opening statements today be

given by Mr. Davis and myself. We asked unanimous consent for

the gentleman that is complaining to have 5 minutes that other

Members didn’t get.

If a Member on the Republican side or the Democratic side asks

for additional time, it will be up to the Members, and I would hope

that Members would be generous enough not to cut people off. So

the time now is to Mr. Issa, and I will start the 5-minutes for him

so he will have his complete time.

Mr. Issa, you are recognized.

Mr. ISSA. Thank you, Mr. Chairman.

On my 5 minutes, I would like to ask that regular order be strictly adhered to unless there is unanimous consent, and I trust in the

future we can eliminate this problem by doing so. I think if we are

going to ask the GSA and other organizations to strictly adhere to

the rules, regulations, and laws, we should do no less.

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Administrator Doan, I am frustrated because I came out of the

business world, too, and I came to this committee to fight the bureaucracy that sits around us and behind us throughout all of Government, the people who are there when you arrive and will be

there when you are gone.

Now, I just want to concentrate on one simple thing. Your team,

your team building, these are people chosen, some confirmed and

some just straight appointments, but, like yourself, many are confirmed by the Senate. They are chosen by the elected President of

the United States to oversee and to provide policy guidance and

control over the largest body of human beings that exist on the face

of the Earth working for a government, our U.S. bureaucracy; isn’t

that right?

Ms. DOAN. That is true.

Mr. ISSA. And in your 8 months I think you probably found what

I found in my nearly 7 years now: that this is a bureaucracy that

will resist you at every point, isn’t it?

Ms. DOAN. You are absolutely right.

Mr. ISSA. So when you talk about team building, including a reminder that you worked at the pleasure of the President, it is not

inappropriate for you to understand, as the slides, the one they

don’t tend to show you, show that this President was right in the

middle in his last mid-term of how many seats he lost in the

House. That is informational, isn’t it?

Ms. DOAN. Yes, it is public domain.

Mr. ISSA. And when you are looking at the presentation by the

President and how the President views his working relationship

and how he views his—you are receiving a briefing from the man

who appointed you and for whom the Senate confirmed you?

Ms. DOAN. That is true.

Mr. ISSA. So, you know, the amazing thing here—and I don’t

want to take a lot of time talking about the Body up here—but

would it shock you to find out that members of perhaps this committee’s majority staff, and certainly personal staff members of

some of the people on that side and some of the people on this side,

they go to either the Republican committee or the Democrat committee and they make fundraising calls on their lunch hour for

Members of Congress, these Federal employees? Would that shock

you to find out?

Ms. DOAN. Thank you for telling me.

Mr. ISSA. Would you be shocked to find out that, well, chiefs of

staff, chiefs of mission, if you will, to our Districts come back here

to be briefed on Federal expense, Federal expense. We bring them

back here, we put them up in housing, and guess what, they go to

evening events either at the Democrat committee or the Republican

committee’s expense to find out how they can do a better job of

keeping their Member in office. Would that surprise you?

Ms. DOAN. I didn’t know that before, but thank you.

Mr. ISSA. Well, the American people probably are surprised. And

yet, in fact, that is a system that the chairman is well aware,

chairwoman, and so on, are all well aware of.

But I want to go back to the team building. You have been building a team to take this incredibly large bureaucracy, one that was

receiving F’s for how it dealt with disabled vets that had busiVerDate 11-MAY-2000 14:07 Feb 04, 2008 Jkt 000000 PO 00000 Frm 00183 Fmt 6633 Sfmt 6633 C:\DOCS\40153.TXT HGOVREF1 PsN: HGOVREF1
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nesses, veterans that had businesses, African Americans that had

businesses, women that had businesses, and, for that matter, small

businesses, in general. It had an F for reaching out and providing

opportunities for those contracts. That is one of the major things

you are working on, isn’t it?

Ms. DOAN. That is one of many initiatives, but it is a passion of

mine, yes.

Mr. ISSA. And it is something that this Congress and this Oversight Committee has wanted you to do, isn’t it?

Ms. DOAN. That is very true, because, you know, it is hard

enough as it is if you are a small or minority or woman-owned

business or a service disabled veteran. You know, I don’t want

working with the Federal Government to be yet another barrier or

challenge for them.

Mr. ISSA. Well, I tell you, I was recently given a small award by

my university, and I was honored with Ronny Harris, the Golden

Gloves champion of Mexico City. He is an African American, small

businessman in Ohio, and he finds it very frustrating, with a successful business, doing business with the Government. And you

know what? It has nothing to do with the fact that he happens to

be minority owned. It is just hard to do business with agencies, including the GSA. So I, for one, commend you for concentrating on

what is important, which is building a team that will break

through the bureaucracy and will meet the objectives that the

American people care about, and one of the most important is making your organization responsive to small and emerging businesses

and giving them opportunities.

I would like you just to tell us for a minute in the remaining

time how you are doing that and how this committee should be

helping you do more of that.

Ms. DOAN. At least we are trying as hard as we can to do a

much, much better job. The first thing we have done is we have

finally been able to start awarding schedules in 30 days. This is the

best and first opportunity for small and minority businesses to be

a prime contractor, and that helps them with cash-flow.

The second thing we have done is we have just made the largest

award of actual work, not just a hunting license, but the get-go

contract for IT infrastructure support to a service disabled 8A company. We are really proud of that. It is the largest award of its

kind. We have alliance small business. We have a lot of small business opportunities that are going to be out there. Even our satcom,

our satellite procurement that is ongoing, very unusual, it is going

to have a professional services component that will be for small

and minority businesses. We are trying really hard to carve out opportunities because, you know, everybody can talk a good story, but

when you are in the small business community you want efforts

that have real meat to them. You want actual funding to go to your

business. You don’t want it to just be an open vehicle that has

nothing behind it. This is what we are trying to change.

Chairman WAXMAN. The gentleman’s time has expired.

Ms. DOAN. Sorry. I didn’t mean to talk so long.

Chairman WAXMAN. We allow full answer to the questions, but

the question period is limited.

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I want to recognize Mr. Higgins, and as I do I want to inform

all the Members that it would be a violation of the law for them

to make phone calls from their office soliciting contributions. We

have to go elsewhere to do it. We don’t use our offices, nor many

of us think Government offices should be used.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, let me note, but the rules

pertaining to fundraising are different than other items. Members

politic in this building all the time. Democratic conferences, Republican, talk about politics within this building and within the Capitol, the conferences. You can’t raise money. No one solicited money

in this case.

Chairman WAXMAN. All right. I accept your point.

Mr. Higgins.

Mr. HIGGINS. Yes, thank you, Mr. Chairman.

Let me, before I ask Ms. Doan several questions, let me just clarify this issue of lunch hour and whenever this had occurred. It

doesn’t matter under the Hatch Act whether it was during the

lunch or whether she invited employees. Under the Hatch Act, the

Administrator is not allowed to be present at a political event on

or off Federal property in which these activities happened, if her

subordinates were at the event, even if they came voluntarily, because it is considered inherently coercive.

Ms. Doan, the committee has obtained internal e-mails between

the White House and GSA regarding political presentation of Scott

Jennings that he gave at GSA. I want to ask you about those. They

will appear up on screen here.

Ms. DOAN. Is that what this is?

Mr. HIGGINS. Yes. It is in your packet. I’m sorry.

Let me first direct your attention to the e-mail dated January 19,

2007, which is on page 1 of your documents. This e-mail is from

Jocelyn Webster, who works for Mr. Jennings at the White House,

and she is writing to Tessa Truesdale. I understand that Ms.

Truesdale is your confidential assistant?

Ms. DOAN. Yes. She works in the Administrator’s office for me.

Mr. HIGGINS. In this e-mail Mr. Jennings’ assistant is sending a

copy of Mr. Jennings’ slides to GSA. This is what Mr. Jennings’ assistant says. ‘‘Please do not e-mail this out or let people see it. It

is a close hold and we are not supposed to be e-mailing it around.’’

My question is, can you tell me why Mr. Jennings’ assistant says

this is close hold and why you are not supposed to be e-mailing this

around?

Ms. DOAN. I can’t imagine, since I am not actually on this e-mail.

I think probably either Jocelyn or Joycelyn—I’m not sure what her

name is—Joycelyn Webster or maybe Tessa Truesdale could answer that. But this isn’t my e-mail.

Mr. HIGGINS. I would like you to look closely at the e-mail from

Mr. Jennings’ assistant.

Ms. DOAN. Is that the same one?

Mr. HIGGINS. Yes.

Ms. DOAN. OK.

Mr. HIGGINS. An image of the e-mail is up on the screen. If you

look at the e-mail address, you can see that Mr. Jennings’ assistant

is sending this from GWB43.com account. The GWB43.com domain

is owned by the Republican National Committee. Do you know why

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Mr. Jennings’ assistant e-mailed this from a Republican National

Committee account instead of a White House account?

Ms. DOAN. No, I do not. This is not my e-mail and it was not addressed to me.

Mr. HIGGINS. Do you know of any reason why Mr. Jennings’ assistant would try to hide that she was communicating from the

White House?

Ms. DOAN. No. I don’t. I am not familiar with her and this is not

my e-mail or——

Mr. HIGGINS. Let me put up another e-mail on the screen that

is document 2–432. This is on page 2 of your packet.

Ms. DOAN. Yes. I have it.

Mr. HIGGINS. This one is from Mr. Jennings, himself. He is using

the Republican National Committee e-mail account, too. In this email Mr. Jennings is using his GWB43.com account to communicate with GSA’s White House liaison, J.B. Horton. My question

is: were you aware that your staff was communicating with the

White House officials who used e-mail accounts controlled by the

Republican National Committee?

Ms. DOAN. No, I was not.

Mr. HIGGINS. Let me show you another e-mail on page 3 of your

packet. This one is from your confidential assistant, Ms. Truesdale.

She had apparently been contacted by GSA staff who wanted to do

a trial run with a copy of the presentation on GSA’s audio-visual

equipment. Ms. Truesdale says that she can’t share the document

for use in a pre-meeting walk-through. Here is what she says, ‘‘I

just heard back from the presenter, and, as much as the information is highly sensitive, he would prefer not to e-mail it.’’

Ms. Doan, the e-mails show that Mr. Jennings regarded the

briefing as ‘‘highly sensitive.’’ His assistant also called them close

hold, that other people should not see. Do you know why he would

regard the briefing as highly sensitive?

Ms. DOAN. No, I don’t. I think you would have to speak to the

person whose e-mail and all this attachments that it was.

Mr. HIGGINS. I think the answer, Mr. Chairman, is obvious. The

briefing is highly secretive because it contains partisan political

analysis and strategy. The White House didn’t want to share their

target list with Democrats and they didn’t want Democrats to know

whom they regarded as most vulnerable Republican Members.

It is perfectly appropriate for party leaders to compose these

kinds of political hit lists and to hold discussions about political

strategy among party officials. It is not appropriate to use Government agencies to advance partisan political agendas, yet that is exactly what happened here.

GSA’s top officials were assembled to hear a presentation about

targeting Democratic Members in the upcoming elections, and then

they discussed how GSA could help Republican candidates. They

did this in a Government building during a week day where these

officials should have been doing business of the American people.

Mr. Chairman, I would like to make one other observation. Mr.

Jennings and other White House officials appear to be using their

Republican National Committee e-mail accounts on a routine basis

to discuss politically sensitive topics. We know from documents obtained by the Judiciary Committee, for example, that Mr. Jennings

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used the identical Republican National Committee account to discuss the U.S. Attorney firings that he was involved with, and we

know this from the committee’s work that the Abramoff investigation, that the White House used Republican National Committee email accounts to communicate with Mr. Abramoff and his staff.

I think this is a subject the committee should investigate, and it

would be a serious abuse if White House officials were using these

political e-mail accounts to subvert the requirements of the Presidential Records Act.

Chairman WAXMAN. The gentleman’s time has expired. Thank

you, Mr. Higgins.

Mr. Burton.

Mr. BURTON. I used to be the chairman of this committee. My

picture is here some place.

Ms. DOAN. I know. You look just like it.

Mr. BURTON. I want to tell you, Ms. Doan, I really appreciate you

coming here and being very open, and I want to thank you for the

$200,000 for the Republican Party. I wish more people would do

that.

Now, I have great respect for my colleagues on the other side of

the aisle. I have worked with them on a lot of legislation, and

Henry and I, the chairman, he was my ranking Democrat for 6

years. I want to give you a little bit of a history lesson, because

this is pretty interesting.

We had over 100, maybe 150 people that we had as witnesses

that were dealing with the Clinton administration that either took

the fifth amendment or left the country. They wouldn’t even talk

to us. We had to issue over 1,200 subpoenas to get people to come

up from the White House to talk to us. And every time we did that

Henry would say, ‘‘This is a witch hunt. This is a witch hunt.’’ So

I just want to say to my good friend, Henry, you know, there is

nothing as self righteous as a reformed lady of the evening.

Now, let me go into a few things that happened during my tenure as chairman. We had two guys that were downloading FBI confidential files into home computers, which is illegal. These are top

secret things. Two guys, Marceca and Livingston. You know, when

we had them before the committee they could not remember who

hired them at the White House. Now, Mr. Aldridge who was the

FBI agent who worked down there, said that he was told by the

chief of staff that Hillary Clinton hired them. But, of course, when

we brought that up in the committee, my god, this is a witch hunt,

you can’t talk about that. But they were downloading FBI files into

home computers so they could get stuff on Republicans to give us

a hard time.

We had a guy named Johnny Chung come before the committee who told us he got $300,000 from the head of the Communist Intelligence Agency in Hong Kong in a restaurant saying that he wanted to give it to the Clinton administration because he said he

thought President Clinton was doing a good job and he wanted him

re-elected. This was illegal. But, once again, this was just a witch

hunt.

We had a guy named John Whong—that was Johnny Chung, the

first one. John Whong, who was a member of the Lippo Group, said

that the Lippo Group of Indonesia gave the Clinton administration

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millions of dollars in illegal campaign funds. But, once again, this

was a witch hunt.

We had people come from the White House. I had the chief of

staff at the White House, his assistant, the chief counsel at the

White House, person after person at the White House come down

here and testify about all these things, and they couldn’t remember

a thing.

We had what we called an epidemic of selective memory loss. It

was really a difficult time. And all the while that this was going

on my good friend, Mr. Waxman, kept saying in the media and all

over the country, ‘‘Burton is on a witch hunt. This is terrible. These

are horrible things that were going on.’’

So I just want to tell you, Ms. Doan, you are here. You have not

taken the fifth amendment. You have not fled the country. You are

a patriotic American. I appreciate what you are doing by testifying

here today. And don’t let these guys intimidate you. And you

haven’t and I really appreciate that.

Now, I have high regard for my Democrat colleagues, and I see

a lot of new Members over there, but before you start pointing fingers about something that really can’t be proven—this is all spurious arguments that are being made. But before you start pointing

fingers please do me a favor. Do me a favor. Go back and look at

6 years of investigations that we conducted when I was chairman

of this committee and find out how many people in the administration couldn’t remember things, how many people wouldn’t talk, how

many fled the country or took the fifth amendment, and then come

back and say to me, ‘‘Well, we want to be fair.’’

I yield the balance of my time to Mr. Davis.

Mr. DAVIS OF VIRGINIA. On the e-mail——

Chairman WAXMAN. Before you yield to Mr. Davis, I just want

to point out—make sure this time doesn’t count. Stop the clock.

You have 1 minute left. I just want to say to Mr. Burton his characterizations today are inaccurate, wrong.

Mr. BURTON. This is my time. Let me just say let’s go and get

all the newspapers and the reports from the committee and look at

them. We will find out how inaccurate they are. Look at the papers

and look at the records. You did that for 6 years, and now you are

going to have to eat it.

Chairman WAXMAN. If I might just conclude very, very

briefly——

Mr. DAVIS OF VIRGINIA. I just want to get——

Chairman WAXMAN. I would like to put in the record a report

that we did on Mr. Burton’s investigation so people can see what

we thought was going on, and we also heard what you had to say

that you thought was going on. Without objection, that report will

be made part of the record.

Mr. BURTON. As long as mine is in there, I don’t object.

Chairman WAXMAN. Mr. Davis has the last minute.

Mr. DAVIS OF VIRGINIA. Thank you.

You know, officials appointed by the President with the advice

and the consent of the Senate who are in policy-determining positions and certain Presidential aides have restrictions, I mean are

exempt from restrictions, the no politics portion, so I don’t think a

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lot of this applies to you, but, anyway, the Office of Special Counsel

is looking at this.

Ms. DOAN. They are.

Mr. DAVIS OF VIRGINIA. Despite Members’ individual opinions on

this, I think what will be there will be. What I think is clear here

is that this is now turning into an assault, less on you—I think you

have acquitted yourself well today—than on the administration,

and raises other issues I suspect the committee will be looking at

over time.

I just want to ask for the record, the e-mails that came to your

aide that were put up on the board a couple of minutes ago, did

you ever see those? Do you recall seeing them?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. So a lot of e-mails go to aides and stuff

that never gets on your desk; is that correct?

Ms. DOAN. That is very true.

Mr. DAVIS OF VIRGINIA. OK. I wanted to clarify that for the

record.

Once again, this is nothing that she did. This is something the

White House evidently does on a fairly routine basis, and as far as

you go, the initial allegations against you have now turned into

just a lot of political mud fighting, unfortunately.

Thank you.

Ms. DOAN. Thank you.

Chairman WAXMAN. The gentleman’s time has expired.

We will now go to Ms. McCollum.

Ms. MCCOLLUM. Thank you, Mr. Chair.

Looking at the GSA mission statement again, it talks about respect for fellow associations, professionals——

Ms. DOAN. Excuse me, Congresswoman, could you talk just a tad

louder.

Ms. MCCOLLUM. Well, there has been so much yelling going on

I thought maybe a softer voice might be appreciated.

Under the GSA general missions, your values are listed:

ethics——

Chairman WAXMAN. Ms. McCollum, would you speak right into

the mic? I’m even having trouble hearing you.

Ms. MCCOLLUM. I couldn’t get much closer to it, Mr. Chair.

Maybe I don’t have a good mic.

Ethics and integrity in everything we do, respect for fellow associates, teamwork. When you received the briefing on the Hatch Act,

did you sign off any information? Did they give you any booklets

to get home?

I worked in the private sector for a long time and on our ethics

in retail to make sure that my employees were doing things, they

were handed a booklet. They signed off on something, and once you

signed off on it you became responsible for it. It was your responsibility to read it all. Do you recall if you were given anything?

Ms. DOAN. Congresswoman, I know I am under oath, so I have

to tell you I can’t remember, but what I can do is we can check

and then I can come back to you with this after the hearing with

exactly. I do know that I had an ethics letter that I had signed

when I became a Presidential appointee, and that was done by the

General Counsel’s office, you know, and I signed off on that. I know

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I did that. I did attend a Hatch Act briefing, but what I am having

a little trouble remembering is whether there was actually a document that at the time of the briefing I had to sign off. But I can

check and followup with you on that. Would you like me to do that?

Ms. MCCOLLUM. Well, once any one of us signs off on those

things we assume a responsibility, a very serious responsibility, especially when we are supervising individuals. Class C employees

are not exempt from the Hatch Act. They are not exempt. So I

want to go back, very seriously, to a letter on March 13th that you

sent to this committee, in which you stated there were no improper

political actions that occurred during or as a result of the January

26th teleconference. But your statement doesn’t square with the

facts, because Class C employees are not exempt from the Hatch

Act.

You also today—and I believe you read it, so you might want to

find it, because I don’t want to misquote you or misrepresent anything you have said—you talked about advancing the policy of the

administration. Well, what happened at this lunch is you were advancing the policy of Karl Rove and Mr. Jennings, either with the

best of intentions or with no intentions, by what happened.

So let’s go back to the slides. These slides are clearly partisan.

They are from the point of view of Republican. They are not saying

team, Democrats, Independents, and Republicans. They say us versus them, in fact. Slide 2–566 is called Lost Ground with Swing

Voters.

Ms. DOAN. Which one? Do you have a page number or something?

Ms. MCCOLLUM. It is 566. It is upside down. It is up there, but

right side up. Lost Ground with Swing Voters, Republicans or

Democrats. This is the Republicans losing ground, is it not?

Ms. DOAN. Can I check with somebody?

Ms. MCCOLLUM. Well, we will go to another slide.

Ms. DOAN. Honestly, I am happy to give an official opinion, and

if you say that it is we can just assume it is and let’s go on.

Ms. MCCOLLUM. Slide 2–567, Bigger Losses Among Men. Who

had the bigger losses, Republicans or Democrats? It is Republicans.

The next slide, 568, Long-Term Problems Among Latinos and

Youth Vote. Who has the long-term problem? Democrats? It is not.

The us in all of these slides are referring to the Republicans.

Here is the last one I am going to show, 576. This one shows the

Republicans’ 72-Hour Get Off the Vote Effort made a difference in

several races.

You concede that this slide refers to our strategy, meaning the

Republican strategy? They are not talking about the Independent

strategy or the Democratic strategy in 2008. So I am asking you,

your statement in writing, you regarded this briefing as team

building among GSA appointees. What kind of team do you think

this presentation was building? An Independent, a Democrat, or a

Republican team?

Chairman WAXMAN. The gentlelady’s time is expired, but the witness will be permitted to answer.

Ms. DOAN. I think she was just really probably trying to make

a statement, so that is fine.

187

Chairman WAXMAN. It sounded like a question to me. You don’t

want to respond?

Ms. DOAN. Was it a question?

Chairman WAXMAN. What kind of team were you building?

Ms. MCCOLLUM. What kind of team were you building?

Ms. DOAN. I am building the most incredible team in all of Government with incredible managers. Honestly, you guys, if you get

past this and everything let me send you their bios. You have to

look at these people. You have never seen anyone like these managers that I brought in. I have brought in people. These are not

your regular Government people. These are people from the outside. This is new blood. It is a great team. You have to give them

a chance. You really do.

Chairman WAXMAN. OK. The gentlelady’s time is expired.

Mr. Shays, you are next for questioning.

Mr. SHAYS. May I ask how many Members on the other side are

still waiting to ask questions?

Chairman WAXMAN. We have a lot of them over here.

Mr. SHAYS. This is my time and I would like to reserve it.

Chairman WAXMAN. OK. The gentleman will be called on later.

Next in order in the committee is Mr. Sarbanes.

Mr. SARBANES. Thank you, Mr. Chairman.

My questions are really trying to go to the process inside of GSA,

and so I am particularly concerned about the questions that have

been raised on the SUN Microsystems contract. It appears that for

2 years the career contracting officials inside of GSA were refusing

to renew the contract because SUN wasn’t giving the kind of pricing that it was giving to its commercial customers, as I understand

it. And then the Government, which really means taxpayers, paid

tens of millions of dollars more than we should have paid because

SUN concealed larger discounts that the company was giving to the

private sector. I am curious as to your role in this.

The committee interviewed one of the career contracting officials

on the SUN negotiation, a fellow named Mike Butterfield, and he

was opposed to signing the contract, as I understand, and he told

the committee that he had warned that signing a deal with SUN

‘‘would mean getting discounts that would be inferior.’’ But after he

made his recommendation to end the negotiations, Jim Williams,

who is your Commissioner of the Federal Acquisitions Service, told

him that you wanted the SUN contract done anyway. I believe his

exact words to Mr. Butterfield were, ‘‘Lurita wants this contract

awarded.’’

So my question is: did you tell Mr. Williams that you wanted the

SUN contract to be done in spite of all of these reservations that

had been brought forward?

Ms. DOAN. I cannot give you an exact, verbatim quote, but what

I can tell you is the sense of it, and that is that I spoke with Commissioner Williams and told him that I needed him to use his best

judgment, put his best people on the effort, and try to understand

what is the sense of it.

I think, if you could just possibly allow me to give you just a little bit of the context of all of this, it only came to my attention because I was sort of abruptly told that SUN Microsystems had been

referred for some kind of criminal judgment—that is probably not

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the legal word—to the Department of Justice, and I was absolutely

astounded, because this was the first I had ever heard of this, and

yet I had had, you know, multiple meetings with my Inspector

General. It had somehow never come up. So that was sort of the

entry point where I became engaged.

But at no time in either event have I ever intervened. I do not

believe that I have been intrusive in any way. I do believe that, as

the head of the agency, I have not just a right but also an obligation to be informed, to understand what is going on, and to make

some actions transparent to everyone within our community. So obviously SUN Microsystems is a technology vendor that falls under

our Federal Acquisition Service. Our Commissioner, Jim Williams,

we were all, all of senior management, totally, totally in the dark.

We did not know any of these challenges were going on connected

to the Department of Justice, because we had not been apprised.

We had not been kept informed. We had not been briefed. This was

just completely mind boggling to me that something of this scope

could have happened, with repercussions across the entire Federal

Government, and that nobody, not anybody, would have seen fit

from the IG’s office or, you know, nowhere, they never came to me,

they have came to my chief of staff, they never came to the Commissioner, who is directly affected and oftentimes meets with these

people every day. They never did that.

Mr. SARBANES. Thank you. Actually, I am not as interested in

that particular——

Ms. DOAN. This is not my time? I’m sorry. I thought that was my

time to talk.

Mr. SARBANES. I’m not as interested in——

Ms. DOAN. Sorry. This is my first hearing.

Mr. SARBANES [continuing]. That particular issue. What I am

going to is the people that were most familiar with the contract

who were bringing forth their concerns, it is interesting, because

you said the context you wanted to give me was that your message

back was exercise your best judgment, but that directly contradicts

the message that Mr. Butterfield feels he was receiving, which was,

despite your concerns about this contract, we want this to be done.

And when Mr. Butterfield held his ground and refused to sign the

contract, what happened to him?

Ms. DOAN. I have never met Mr. Butterfield and I didn’t realize

that he was a contracting officer. I do not know what happened to

him. But I will tell you that what you are saying, I truly believe

what you are implying, rather, seems untrue. What I know is that

Jim Williams is a great Commissioner for the Federal Acquisition

Service. He has stellar judgment, and we have great contracting officers. I don’t know what Mike Butterfield said. I don’t really know

what Jim Williams says. But what I do know is that——

Mr. SARBANES. Well, Mr. Butterfield——

Ms. DOAN [continuing]. I have said that——

Mr. SARBANES. What he told the committee was that he was replaced by another contracting officer named Shana Budd, who then

signed the contract. And the Inspector General——

Ms. DOAN. No, excuse me, who negotiated a great deal for the

American people, and in the process of doing that signed a contract.

189

Mr. SARBANES. Yes. Well, our information is that it wasn’t a

great deal for the——

Ms. DOAN. We must beg to differ on this.

Mr. SARBANES. Mr. Chairman, just 30 seconds.

Chairman WAXMAN. Without objection, the gentleman will be

given 1 additional minute.

Mr. SARBANES. Thank you very much.

What I am concerned about is the message that gets sent down

from high levels to professionals in these agencies, and this is adding sort of the third leg to a three-legged stool I see in terms of

an assault on Federal employees.

The first piece that we have seen in your hearings, Mr. Chairman, is cutting resources to people that are trying to do their job.

The second piece is contracting services out without the oversight

that ought to be with them. And the third piece, which is evidenced

here, is that when people try to do their job and they bring their

best judgment to the table they are overruled from above in a way

that I think is demoralizing for people in that agency.

Thank you.

Chairman WAXMAN. Thank you, Mr. Sarbanes.

Mr. Shays.

Mr. SHAYS. Thank you, Mr. Chairman. I appreciate your recognizing me.

I want to say to you, Ms. Doan, I think you have a remarkable

history and you should be very proud of your accomplishments as

a minority businesswoman who did something any American would

be so grateful to do—create a business that you could be so proud

of. And you did it, and many of us haven’t. I congratulate you for

that.

I also want to thank you from the bottom of my heart for your

service to our country, for your willingness to step in and basically

make so much less than you make in the private sector, and want

to serve a President you believe in. And I particularly appreciate

it because now the President isn’t so popular, and the in thing is

to say you hardly know the man, and good for you.

You know, with hindsight I would have recommended to the

White House they not do this chart and I would have recommended

they should know to have probably said to you, you know, this

shouldn’t happen on a Government site. But this wasn’t about how

you were going to raise money and it wasn’t how you were going

to undermine Democrats. It helped explain why we lost. And I

think we, Republicans, you know, we lost because of corruption

issues, we lost because we weren’t doing things as well as we

should have. You know, a terrible thing for someone to have

learned. Frankly, I am happy that would have been conveyed so it

would tell you that, you know, if you want to help your country and

you want to help someone you believe in, just do a good job. That

is the message that I heard.

It is my understanding—and I want to say this—that when you

have had events, that you make sure Republicans and Democrats

all know about it. And I fully understand if a Democrat administration is in power, you know, they might notify our two Senators, or

at least one of our Senators first before they notify me, but they

are going to invite me and they are not going to say I have done

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a great job. They will say the Senator has. I understand that, and

I don’t lose sleep about it.

I feel like this committee is straining out gnats and swallowing

camels at this particular hearing. We have had a lot of very important hearings. This isn’t one of them.

With that, I would like to yield time to my colleague.

Mr. DAVIS OF VIRGINIA. Thank you.

You never met Mr. Butterfield to your recollection; is that correct?

Ms. DOAN. I still have not yet.

Mr. DAVIS OF VIRGINIA. And I’d just refer the gentleman to Ms.

Budd’s, who did negotiate that, her comments that we put in the

record earlier in the day.

SUN Microsystems were referred to the Department of Justice,

is my understanding from the IG.

Ms. DOAN. That is what I believe.

Mr. DAVIS OF VIRGINIA. Did you do anything to stop them from

being referred? Did you step in the way and say we can’t do this?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. You just let the ordinary process take its

way and let the——

Ms. DOAN. Apparently, it actually had already been done, but nobody bothered to inform me. It had already happened 2 weeks before.

Mr. DAVIS OF VIRGINIA. And it would be helpful to know that,

wouldn’t it?

Ms. DOAN. It would have been nice to at least have a courtesy

memo dropped to me or something.

Mr. DAVIS OF VIRGINIA. And that is really part of the problem

here, isn’t it? The IG, who is supposed to report to you, just——

Ms. DOAN. And he doesn’t, and it is hard because we sit with our

vendors and they feel in many ways that we are two-faced and we

are not, you know, we are not understanding of their issues, and

it is very hard when you are sitting in a meeting with someone and

they know they have been referred to the Department of Justice

and you are smiling and doing a meet and greet and you don’t

bring it up, and it looks like we are duplicitous, when the truth of

the matter is we were simply uninformed.

Mr. DAVIS OF VIRGINIA. We don’t debar companies for referrals

to Department of Justice, do we?

Ms. DOAN. No, we do not.

Mr. DAVIS OF VIRGINIA. It is not in the rules, is it?

Ms. DOAN. No. I think there has to be a ruling and a finding and

wrongdoing found.

Mr. DAVIS OF VIRGINIA. Yes, there has to be adjudication.

Ms. DOAN. Nothing has happened in that area yet, to my understanding.

Mr. DAVIS OF VIRGINIA. So if you were to debar them or throw

them out for this and there had been no adjudication, you would

probably be in violation of the law, wouldn’t you?

Ms. DOAN. Yes, but I don’t think debarment would be happening

even as a result. That is for the Department of Justice to decide

what has to happen.

Mr. DAVIS OF VIRGINIA. Exactly.

191

Ms. DOAN. I think.

Mr. DAVIS OF VIRGINIA. If they were convicted——

Ms. DOAN. Can I just correct it, because I don’t know the——

Mr. DAVIS OF VIRGINIA. You are not an attorney.

Ms. DOAN. The General Counsel for GSA is making wild signals

to me.

Mr. DAVIS OF VIRGINIA. Not renewing the contract would be de

facto debarment.

Ms. DOAN. Yes. right.

Mr. DAVIS OF VIRGINIA. That is my point.

Ms. DOAN. OK. I am sorry.

Mr. DAVIS OF VIRGINIA. But if SUN Microsystems is adjudicated,

if Justice sees merit in this and moves forward, they could still be

debarred, right?

Ms. DOAN. Yes. It would then come to our suspension and debarment official and then he would take that action.

Mr. DAVIS OF VIRGINIA. And that has not happened, has it?

Ms. DOAN. No, that has not.

Mr. DAVIS OF VIRGINIA. And if that came up, then you would review it on its face and weigh all the other factors?

Ms. DOAN. Well, I wouldn’t be. I actually have delegated that authority to the suspension and debarment official at GSA.

Mr. DAVIS OF VIRGINIA. Well, that brings me up, because there

were some allegations earlier about there was—and you might say

this where the Big Five accounting firms or Four—I don’t want to

slight anybody—en masse, and you were told about that, and what

would that have done to the Government to not have been able to

get the accounting from the biggest accounting firms and have

them eligible to do audits. That would have crippled.

Ms. DOAN. It would have been devastating, especially since initially, when e-mail came to me, it was 2 weeks before the end of

the fiscal year.

Mr. DAVIS OF VIRGINIA. But you didn’t do anything to interfere

with that, did you?

Ms. DOAN. No. It was a Sunday. I just wanted to be informed.

I was hoping people could wait until Monday to do it.

Mr. DAVIS OF VIRGINIA. Can you imagine what would have happened if a debarment official debarred the Big Four accounting

firms with Government audits coming on and we had to go to

smaller companies that did not have the level of expertise to get

this done, and all of the sudden——

Mr. SHAYS. Could I ask for a unanimous consent?

Mr. DAVIS OF VIRGINIA [continuing]. You didn’t know about——

Mr. SHAYS. Mr. Chairman, could I ask unanimous consent for my

colleague. It is my time.

Chairman WAXMAN. This is your time.

Mr. SHAYS. It is my time. And could I ask for unanimous consent

for an additional minute?

Chairman WAXMAN. I will let Mr. Davis complete his sentence,

but we have——

Mr. SHAYS. Could I ask for a unanimous consent for an additional minute?

Chairman WAXMAN. The Chair will object, because we do want

to get another Member able to ask questions.

192

Mr. DAVIS OF VIRGINIA. I think my point is simply this. My understanding is that you just made an inquiry at that point and

wanted to be informed. You did nothing to interfere with that decision.

Ms. DOAN. I did not.

Mr. DAVIS OF VIRGINIA. But had you not been informed and that,

in fact, took place, can you imagine coming up before this committee at that point and saying you were out of the loop.

Ms. DOAN. Yes.

Mr. DAVIS OF VIRGINIA. Thank you.

Chairman WAXMAN. Let me ask you this question. Jim Williams,

your Commissioner of Federal Acquisition——

Mr. SHAYS. Point of order, Mr. Speaker. Point of order.

Chairman WAXMAN. The Chair has not taken his time.

Mr. SHAYS. And are you yielding yourself——

Chairman WAXMAN. I am asking a question. That is my answer

to your point of order.

Mr. SHAYS. I’m asking if you are yielding time. I am raising a

point of order. I would like to know——

Chairman WAXMAN. What is the point of order?

Mr. SHAYS [continuing]. If you are yielding yourself 5 minutes

now.

Chairman WAXMAN. I am yielding myself 1 minute.

Mr. MICA. Point of order. Point of order. Question. The parliamentary inquiry about the rules——

Chairman WAXMAN. Look, you have carried on enough today. I

would like to ask a question.

Mr. MICA. I have a parliamentary inquiry.

Chairman WAXMAN. Jim Williams, your Commissioner——

Mr. MICA. I have a parliamentary inquiry——

Chairman WAXMAN [continuing]. Of Federal Acquisition

Services——

Mr. MICA. I have a parliamentary inquiry.

Chairman WAXMAN [continuing]. Told the committee that he

knew of the——

Mr. MICA. Parliamentary inquiry.

Chairman WAXMAN [continuing]. Department of Justice referral

in early August.

Mr. MICA. Parliamentary inquiry.

Chairman WAXMAN. Did he not tell you that? And do you know

why he didn’t tell you if he didn’t.

Mr. MICA. Parliamentary inquiry.

Ms. DOAN. I don’t know what Jim Williams told you all. What

I do know is that I was—I think it was—I don’t want to go with

the date, but it was, like, 26, 27, somewhere, 29, something like

that. That was when I first heard about it. It is not, I believe—I

don’t know who heard about it first. I think you would have to

probably followup with me afterwards. I can do something in writing and figure out exactly that time line.

Chairman WAXMAN. OK. Thank you.

Mr. MICA. Parliamentary inquiry.

Chairman WAXMAN. It is Mr. Welch’s time. What is your parliamentary inquiry?

193

Mr. MICA. Parliamentary inquiry relates to yielding 1 additional

minute to the minority Member who requested it. He waited patiently for his time. Others were yielding——

Chairman WAXMAN. I am sorry. That is not a parliamentary inquiry. It is, rather, a complaint, and I think an unfounded one.

Mr. Welch.

Mr. SHAYS. I do have a parliamentary inquiry, Mr. Chairman,

and it is a sincere one. I just want to——

Chairman WAXMAN. All of your statements are sincere. What is

it?

Mr. SHAYS. Well, I know, but I would like you to listen, and my

request is this: would you think that your obligation is to yield

yourself 5 minutes, because what I see is you yielding yourself 1

minute in between our questioning, and then we never know when

your time is. So wouldn’t it be logical that you would——

Chairman WAXMAN. If the gentleman would permit, while I don’t

think that is a parliamentary inquiry, I gave Mr. Davis additional

time. I didn’t cut him off when his time finished. It wasn’t a great

deal of time.

Mr. SHAYS. My parliamentary inquiry——

Chairman WAXMAN. But I, as the Chair, have the prerogative of

asking a question that related to this matter, and I said I yielded

myself time for that. That is out of my time. But, if you will

permit——

Mr. SHAYS. Just one question.

Chairman WAXMAN. Let me ask this of Mr. Welch. Do you want

to take your time now, because we are going to have to respond to

votes.

Mr. SHAYS. I just want to know how the process works.

Chairman WAXMAN. Well, you know how the process works.

What is your question?

Mr. SHAYS. The question is this: when you yield yourself time

isn’t it appropriate to yield yourself 5 minutes and to use your 5

minutes and not choose a minute here and a minute there and a

minute here? That is my question.

Chairman WAXMAN. Well, that is a good question, except the

Chair does have prerogatives, and I have seen other chairmen, including yourself, use the prerogatives of the Chair to occasionally

ask questions. I am not going to consider that in violation of the

rules.

Now, Mr. Welch——

Mr. SHAYS. So you can give yourself time any time you want?

Mr. WELCH. I will proceed if we have enough time for the vote.

Chairman WAXMAN. I think we have 5 minutes.

Mr. WELCH. OK. Thank you.

Ms. Doan, thank you. Just one very simple question about this

presentation, and it is this: you know what the content is. It identifies the 20 Democratic targets to be defeated in the next election.

Was that a proper topic of discussion and presentation at a lunch

at your office?

Ms. DOAN. Congressman, there is an investigation open by the

Office of Special Counsel. I am not even going to try to speculate

on this. I am just going to let the investigation take its course, let

194

them make their decision. They are independent. I will live with

it.

Mr. WELCH. In your capacity as the head of that organization,

was that a proper topic of discussion at a lunch?

Ms. DOAN. Congressman, I am going to let the Office of the Special Counsel’s investigation move forward and let them make a

judgment as to what they feel is appropriate or not.

Mr. WELCH. I heard you the first and the second time.

Ms. DOAN. OK. Great.

Mr. WELCH. And let me ask you my question the third time. In

your capacity as the head of the organization, where you have responsibility about the administration of time within your office,

was that a proper topic of discussion?

Ms. DOAN. I am going to allow the Office of the Special Counsel

to make a decision on this investigation. Since it is open, and this

is exactly what they do, I am going to allow them to make a decision as to whether they thought it was appropriate or not.

Mr. WELCH. Yes, but I am asking you whether you thought it

was appropriate.

Ms. DOAN. And, Congressman, I am going to allow the Office of

Special Counsel, which has an open investigation, to proceed with

the course of their investigation. I am not going to try to murky

the waters one way or the other, and I am going to allow them to

make their independent judgment, and I will live with it.

Mr. WELCH. Well, I would be glad to live with your answer, if

you would give me an answer.

Ms. DOAN. I am happy to leave the investigation and the decisionmaking to the Office of the Special Counsel, Congressman.

Mr. WELCH. If Nancy Pelosi called up and said that she wanted

to come over or send somebody over to identify the top 20 Republican targets, maybe some of our friends here, would that be a topic

that you would invite her or her representatives to discuss at

lunch?

Ms. DOAN. We were very blessed to have Speaker Pelosi in our

new San Francisco Federal building, and I’ll tell you——

Mr. WELCH. I didn’t ask you if she was going to come to a ribbon

cutting. Look, this is a very serious question. You have a very serious responsibility.

Ms. DOAN. Yes.

Mr. WELCH. The person who heads an agency has to make certain that there is integrity in how the time of taxpayer money and

people working for taxpayers is used, whether they are Schedule C

employees or not. Right?

Ms. DOAN. Yes. I have a responsibility to——

Mr. WELCH. It is a very simple question. I honestly, you know,

I listened to you not remember, not remember, not remember, despite what is very clearly a very good memory and a very competent record of accomplishment in your own career, so I found

that a little frustrating.

Ms. DOAN. So does my husband, because I can never remember

our wedding anniversary.

Mr. WELCH. You want to know something? I am deadly serious

about this because it is a very simple question.

Ms. DOAN. I understand.

195

Mr. WELCH. And I find you being evasive on this, in all candor.

I am asking you very simply, as the Chief Operating Officer of

this very important organization, whether you think it was proper

to allow a political appointee to come in on lunch time and identify

the 20 political targets in the House races. It is a simple question

that I am asking you. I am asking you your opinion. I am not asking you what I know to be the case if there is an ‘‘investigation’’

ongoing.

Ms. DOAN. I appreciate that, Congressman, and since there is an

open investigation ongoing and since this investigation involves me

I believe that I need to allow this independent investigation by the

Office of Special Counsel to proceed without weighing in one way

or the other and coloring their judgment.

Mr. WELCH. How does it adversely affect the investigation if you

express an opinion about——

Ms. DOAN. I have not yet been interviewed.

Mr. WELCH [continuing]. Using lunch to have a discussion targeting political candidates?

Ms. DOAN. Congressman, I have not had an investigation before

by an Office of Special Counsel. I have actually not testified in

front of a committee before. But what I will tell you is that I will

allow what is another organization’s responsibility, which is to

make a decision on this matter, to proceed. And I will wait and live

with their judgment.

Mr. WELCH. Let’s say an archbishop—I am a Catholic——

Ms. DOAN. So am I.

Mr. WELCH [continuing]. Wanted to come in and proselytize at

lunch. Would that be a proper activity at lunch?

Ms. DOAN. I don’t know. I might have to take the Fifth on this.

I don’t know the murkiness of that.

Chairman WAXMAN. Would the gentleman yield?

You are going to have to answer this question to the Special

Counsel. Why can’t you answer this question to us?

Ms. DOAN. And when the Special Counsel asks me, this is their

purview. When they investigate and——

Chairman WAXMAN. It is also our purview——

Ms. DOAN. I appreciate that, Mr. Chairman.

Chairman WAXMAN [continuing]. To ask you whether you think

it is appropriate. I think it is a violation of the law.

Ms. DOAN. Mr. Chairman——

Chairman WAXMAN. Do you think it is appropriate?

Ms. DOAN. Mr. Chairman, you are allowed to have an

opinion——

Chairman WAXMAN. I want your opinion.

Ms. DOAN [continuing]. And this is a free country, I am allowed

to have one, too, and my opinion is that I get to wait——

Chairman WAXMAN. We are asking your opinion.

Ms. DOAN. I am telling you. My opinion is I get to wait until the

Office of Special Counsel makes a decision, and I will live with it.

Mr. WELCH. That is not an opinion.

Ms. DOAN. Yes, it is.

Mr. WELCH. That is a——

Ms. DOAN. It is my opinion.

Mr. WELCH. That is a tactic.

196

Ms. DOAN. No, no, no.

Chairman WAXMAN. That is a tactic——

Ms. DOAN. Politicians have tactics.

Chairman WAXMAN [continuing]. Of evasion.

Chairman WAXMAN. The gentleman’s time has expired. We have

a series of votes on the House floor. We will recess to respond to

those votes, then Members who have not been recognized will complete the questioning of Ms. Doan. Then we will hear from the Inspector General.

Mr. TURNER. Mr. Chairman, if you might, please, if you could

recognize me and allow me to yield my time to the ranking member

so that he might have my time when we return, I would greatly

appreciate the favor.

Chairman WAXMAN. You want to do that now?

Mr. TURNER. If you would allow.

Chairman WAXMAN. We do have to respond to the vote.

Mr. TURNER. And then he could take his 5 minutes when we return from voting.

Chairman WAXMAN. I will check the rules on that, but I would

certainly want to be as generous as possible to my colleagues.

We will now adjourn to respond to the votes.

[Break.]

Chairman WAXMAN. The meeting of the committee will come

back to order.

Mr. DAVIS OF VIRGINIA. Mr. Chairman.

Chairman WAXMAN. Yes?

Mr. DAVIS OF VIRGINIA. Let me just say at the outset that I know

some of my colleagues have expressed some consternation about

your inter-toning. When I was chairman I would occasionally, as

you know, tone in after a question for clarification, and we have

always had an understanding. We don’t try to abuse it, and I know

you are bending over backward to be fair, but that is in tune with

how I acted, as well. I just wanted to clarify that. This has been

a rough hearing. We have some disagreements about this, but, you

know, I appreciate your trying to answer some of the inquiries and

just note for the record that I intoned when I was chairman, as

well.

Chairman WAXMAN. I appreciate that.

Mr. DAVIS OF VIRGINIA. And we are trying to get through this.

Chairman WAXMAN. I appreciate that, and I want to be fair to

all the Members on both sides of the aisle on this committee.

Mr. Tierney, it is your turn.

Mr. TIERNEY. Thank you, Mr. Chairman.

Chairman WAXMAN. Just a minute, Mr. Tierney. Ms. Norton was

ahead of you. I didn’t see her walk in, but she is here, and I am

going to recognize her to take her turn.

Ms. NORTON. This may not be a welcome occasion. More than

most Members, I am saddened by this occasion, surprised even by

it, because I have gotten to know you since you have become Administrator. I share jurisdiction with this subcommittee. I also

know personally about your accomplishments and am proud of your

accomplishments, particularly as an African American businesswoman. I know how likeable and bright you are.

197

One of the reasons why I think, for the administration people

here, you have an obligation because you are not doing your job

when these people are making their transition from the private sector. Anybody in the White House who had this woman in on that

call, you ought to be—that is who ought to be punished.

Look, I am not going to ask the political questions, because the

most serious things that have happened here, as far as I am concerned, the political questions are very embarrassing, very

straightforward, will be understood by the public. I am more concerned about the IG and the SUN Microsystems, and I can’t ask

about both of them.

Ms. Doan, I worked with the appropriators when you combined

Government policy and congressional affairs, because that, again,

gave the impression of politicizing the Office of Government Policy.

Maybe it wouldn’t have looked that way in the private sector. That

is an agency where GSA is the lead agency, but it controls travel

and space use all around the Government. It is kind of the CR. It

kept that from happening. But the IG, somebody should have told

the Administrator how sacred the IG was.

In your testimony—and you have to explain how you explain

this—on page 4 you describe what amounts to your attempt to

order the IG. In black and white here it looks like the Administrator is having problems with the IG, the way he spends his

money. And you say that the divisions were required to supplement

the Office of IG with an additional $5 million above and beyond the

budget that Congress had approved and appropriated, and you

quickly moved to address this imbalance.

Administrator Doan, were you not aware that, in removing this $5 million, you were not removing money from the IG’s budget.

Each division has set aside funds that are, indeed, included in the

budget of your agency so that pre-audits may occur. Pre-audits are

what divisions do to make sure that they will not be hauled before

Congress for violations or for not getting the best deal for the Government.

Your agency manages $56 billion in contracts for the Defense Department, Homeland Security, and other agencies. By taking that

$5 billion (sic), which divisions request pre-audits be done of their

work, very businesslike practice, to assure they were getting the

best deal for the Government, you left the impression that you did

not want, particularly in eliminating the entire amount, that you

did not want pre-audits in order to assure that the best deal was

being done. Far from what your testimony says, as if somehow the

IG was over-spending, the money had been included and you apparently had to restore it because the Hill went ballistic. This

money was included so that this $56 billion in contracts could be

pre-audited to catch the kinds of errors and bad deals that this

committee has already heard a great deal about last year and this

year.

Why do you characterize in your testimony as the IG spending

beyond his budget? Were you aware that this money was already

in the budget of your agency to do pre-audits and that you were

de-funding all pre-audits for $56 billion of contracts when you did

that?

Ms. DOAN. Do I have time to respond?

198

Chairman WAXMAN. Yes, please. Please respond.

Ms. DOAN. Congresswoman Norton, thank you for your kind comments at the beginning.

To give you a very brief context, as I mentioned in my hearing

submission and in my oral presentation, when I came to GSA this

was an agency that was in distress, and I mentioned that it was

over $100 million deficit that I had to immediately work to address.

What I found was that the $120 million that was sort of in the red,

if we are going to go from a business point of view, was actually

in the division that ironically was now being tasked with paying

the $5 million supplemental to the Inspector General.

I am not undermining oversight. I am totally supportive of oversight.

Ms. NORTON. I am just asking you a question. Did you know that

money was included in your budget precisely for pre-audits, and

that he was not over-spending his budget?

Ms. DOAN. What I know is that this funding was coming from

a failing division that was already $120 million in the red and they

were required to supplement it. What I have always said is I

approve——

Ms. NORTON. And so you think——

Ms. DOAN [continuing]. Of oversight because I want it to

occur——

Chairman WAXMAN. The gentlelady’s time has expired.

Ms. DOAN [continuing]. In the appropriated dollars from the Inspector General. That is all I have asked. Do as many as you want,

be as independent as you want, but do it within your appropriated

funding.

Chairman WAXMAN. Thank you.

Mr. Tierney.

Mr. TIERNEY. Thank you, Mr. Chairman.

Ms. Doan, I think today’s hearing is pretty much about judgment, and yours in particular, and I know we are not going to go

into political slides again. I accept the fact that you apparently

want to give no opinion on that. But on the diversity issue, before

you decided to give a contract to Edie Fraser had you ever personally reviewed the Small Business Administration report that granted an F to the agency?

Ms. DOAN. I’m sorry? What?

Mr. TIERNEY. Before you decided to look in the direction of Edie

Fraser, had you ever personally reviewed the SBA report that gave

an F to your agency on the diversity issue?

Ms. DOAN. I had spoken with Philippe Mendosa, our OSDBUA.

I trust him, and he at that time was warning me, giving me a

heads-up, it is coming.

Mr. TIERNEY. OK.

Ms. DOAN. It did, indeed, come.

Mr. TIERNEY. So had you looked at the report, the SBA report,

before you wanted to contract Edie Fraser——

Ms. DOAN. I believe that Philippe Mendosa tells the truth, and

when he tells me that——

Mr. TIERNEY. Ma’am, this isn’t rocket science. I am asking you

a question, and I am asking you to answer it. The Mr. Smith Goes

to Washington stuff is old already, and it is not even over for this

199

hearing, so just please answer the question. Did you personally

look at the SBA report before you looked in the direction of Edie

Fraser for a contract?

Ms. DOAN. I appreciate what you are trying to ask——

Mr. TIERNEY. No, you don’t, because you are not answering it.

Did you or did you not?

Ms. DOAN. Congressman——

Mr. TIERNEY. Did you or did you not personally look at the SBA

report?

Ms. DOAN. Congressman Tierney——

Mr. TIERNEY. Are you going to—Mr. Chairman, would you direct

the witness to answer and be responsive?

Ms. DOAN. Would I be allowed to just——

Chairman WAXMAN. This is the time for Members to ask you

questions.

Ms. DOAN. OK.

Chairman WAXMAN. There is a limited amount of time.

Ms. DOAN. I am sorry.

Chairman WAXMAN. If it is a yes or no question, answer it yes

or no. If you say you don’t know, that is fine.

Ms. DOAN. OK. I appreciate it. I’m sorry, Mr. Chairman.

Chairman WAXMAN. Just answer the question directly.

Ms. DOAN. This is the first time I talked with him. I was trying

to be respectful.

The answer to that, Congressman, is no.

Mr. TIERNEY. Thank you. Now, had you talked to the people,

your own Office of Minority and Disadvantaged Matters, about that

report, about the F?

Ms. DOAN. Yes. I talked with Philippe Mendosa.

Mr. TIERNEY. And did you do it in detail to find out what that

report and findings were, what the data was behind it?

Ms. DOAN. Yes. We had a pretty long talk. I think we spoke in

our first meeting for——

Mr. TIERNEY. So the answer is yes?

Ms. DOAN. Yes. The answer is yes.

Mr. TIERNEY. Thank you very much. If I direct your attention to

page 16 of your packet, please, I want to show you a fact sheet that

the GSA career people put together during the SUN Microsystems

contract negotiations. It says in the post-audit audit, which covered

1999 to 2005, we have forfeited $70.4 million in reseller price reductions and $7.04 million in GSA price reductions, for a total of

$77.4 million. That was the last 5 years. The career auditors also

discussed what would happen for the next 3 years of GSA signed

the contract, and the fact sheet says about that, for the remaining

3 years on the extension option, if we accept SUN’s proposed price

reduction clause, we estimate we will lose a minimum of $13.1 million in reseller price reductions and $1.31 million in GSA contract

price reductions, for a total of $14.41 million.

Had you read that or familiarized yourself with that part of the

report before Shana Budd took over for Mr. Butterfield?

Ms. DOAN. No, I did not, because I did not in any way——

Mr. TIERNEY. OK. So without having read that——

Ms. DOAN [continuing]. Get involved in this process.

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Mr. TIERNEY. Without having read that, all right, Shana Budd

comes on, and she then, within 9 days of the time she takes the

job, for a matter that has been going on for a couple of years, within 9 days she then signs a contract with returns highly unfavorable

to the taxpayer, and when we asked her about it, the committee

asked her about it, she said, well, she doesn’t rely on auditors to

determine contract prices. Her approach is just to do what the contractor wants. That is a serious judgment issue.

You are her boss. You don’t look into this report or even know

what the projected losses are or what the past losses are. You hire

a woman whose approach, apparently which you adopt, is that she

just wants to do what the contractor wants to do.

The Inspector General then goes on to say that, with regard to

your involvement in this, it is the first time we are aware of which

an Administrator has personally intervened in this way.

Now, you, on the other hand, tell Senator Grassley in his letter

that you weren’t involved. I wasn’t briefed by FAS in August or any

other time on the SUN Microsystems contract deficiencies. I had no

knowledge of the negotiations or the basis for decisions made regarding this contract.

I direct your attention to page 4 of your packet. On August 27,

2006, Marty Wagner, Jim Williams’ Deputy at FAS, the Federal

Acquisition Service, sent an e-mail to your chief of staff, John

Phelps, explaining that the SUN contract was likely to be canceled

because they couldn’t meet contract requirements on pricing. Your

chief of staff forwarded the e-mail directly to you with this message: ‘‘Lurita, wasn’t sure you had seen this or not. Looks like

Jim’s prediction came true.’’ He is referring, of course, to Jim Williams, the Commissioner of the FAS.

Three minutes later you wrote back your chief of staff, Mr. Williams, saying, ‘‘This is truly unfortunate. There will be serious consequences felt across the FAS.’’

Less than an hour later Mr. Williams writes back to you stating

that he has scheduled a meeting with the president of SUN’s Federal sales to see what can be done to resurrect the partnership.

Then you have an e-mail exchange between Washington Management Group, a fellow named Larry Allen—I’m looking at page 7 of

your packet. Mr. Allen works for the Washington Management

Group. That firm represents SUN in the negotiations. Mr. Allen

also runs a group called the Coalition for Government Procurement

that just happens to have SUN as a premier member.

In that packet you will see an e-mail dated September 7, 2006,

from Mr. Allen that says, ‘‘Ms. Doan, I understand that new life

has been breathed into the SUN situation. They are meeting with

Mr. Williams today, among other things, and I understand that a

new deal is, indeed, possible within the 30-day timeframe you have

envisioned.’’

Chairman WAXMAN. The gentleman’s time has expired.

Mr. TIERNEY. My question is, Ms. Doan, how can you tell Senator

Grassley that you had no involvement in this at all and then look

at that trail of e-mails?

Ms. DOAN. Because I was not directly involved in this matter at

all. What I did do is exercise proper oversight that I should do as

the administrator of GSA. Larry Allen is, to my knowledge, the

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head or president or something of the Coalition for Government

Procurement. This is the capacity in which I know him, in which

I have met with him, with all of our schedule holders and things

of that nature. I think you are mischaracterizing this and I think

it is a little bit outrageous what you are trying to say.

Mr. TIERNEY. Just read the—I am not mischaracterizing. I directed you to the e-mails. Just read it. I was reading literally from

it.

Chairman WAXMAN. The gentleman’s——

Mr. TIERNEY. That is not a characterization; that is a quote.

Chairman WAXMAN. The gentleman’s time has expired.

Mr. Davis, you can be recognized now.

Mr. DAVIS OF VIRGINIA. Thank you.

Chairman WAXMAN. Five minutes.

Mr. DAVIS OF VIRGINIA. You were not directly in the negotiations

with SUN Microsystems, correct?

Ms. DOAN. No, I was not.

Mr. DAVIS OF VIRGINIA. Basically, you were up there saying we

would like to keep this going. What would have been the ramifications on the supply schedule if SUN Microsystems were not an option for Government buyers?

Ms. DOAN. I think this would be very dire for the Federal Government.

Mr. DAVIS OF VIRGINIA. Can you explain why?

Ms. DOAN. Because SUN Microsystems has servers, it has software, it has java scripts, that everyone in the Federal Government

uses. They may not be aware of it, but it is one of the things that

is the backbone of their Internet and many other areas.

Mr. DAVIS OF VIRGINIA. And if you didn’t offer your supply schedule, is it likely it would have been offered on other supply schedules, perhaps at even more disadvantageous rates?

Ms. DOAN. I think it would have been much more expensive for

the Federal Government to purchase SUN products.

Mr. DAVIS OF VIRGINIA. You can’t just measure it by what is on

your schedule.

Now, let me just ask you, on the procedures on this, as I understand it, once on the schedule SUN is not guaranteed any business

at all, correct?

Ms. DOAN. No, they are not.

Mr. DAVIS OF VIRGINIA. A Government agency orders items off

the schedule after it reviews the prices of at least three schedule

holders; isn’t that correct?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. So SUN would offer their prices. If they

weren’t competitive, a Government buyer could go somewhere else,

is that correct, to some of the other schedule holders that offer

same or similar services?

Ms. DOAN. That is true.

Mr. DAVIS OF VIRGINIA. And the chosen contractor would have to

represent the best value. Now, throughout the process, ordering

agencies are encouraged to seek and often receive significant price

reductions above and apart from the discounts that are encompassed in the schedule prices. So even if the schedule price is something, isn’t it true—and we have been through this before—that

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very often the negotiated price is far lower than what is on the

schedule?

Ms. DOAN. Yes. That is what we hope and anticipate.

Mr. TIERNEY. Would the gentleman yield?

Mr. DAVIS OF VIRGINIA. I would be happy to.

Mr. TIERNEY. Thank you. If SUN Microsystems wasn’t on the

schedule, somebody else would be; is that correct?

Mr. DAVIS OF VIRGINIA. No. I can answer that.

Mr. TIERNEY. SUN Microsystems was the only one offering on

that schedule, was it?

Mr. DAVIS OF VIRGINIA. No. There were a lot of people on the

schedule.

Mr. TIERNEY. Exactly. That is my point.

Mr. DAVIS OF VIRGINIA. Well that is my point.

Mr. TIERNEY. And your staff had filed a report that said it was

going to cost $77 million plus if you sign the agreement with them

to put them on the schedule.

Mr. DAVIS OF VIRGINIA. Let me——

Mr. TIERNEY. I am hard pressed to see what you are losing by

not having them on.

Mr. DAVIS OF VIRGINIA. As someone who has spent their career

on this, I can explain it very quickly. There are going to be some

Government servers that are SUN systems that are going to want

to continue with SUN products. If they can’t get it off the schedule,

they would go to NASA soup or GWETS or they may go off the

schedule entirely and buy it on the market, which traditionally had

been much higher prices. That is one of the concerns with this.

Now, let me just ask, the contract that Mr. Butterfield was negotiating—maybe this is to a detail you don’t know, but maybe you

have learned it after the fact—we didn’t say yes to the contract he

said no for. There were changes, weren’t there, after Mr. Williams

negotiated it?

Ms. DOAN. That is true. It was a negotiation, which means there

is give and take on both sides.

Mr. DAVIS OF VIRGINIA. And when Mr. Butterfield was relieved

at that point and Shana Budd came in and negotiated, she negotiated a different agreement than what Mr. Butterfield had offered;

isn’t that right? Both parties moved?

Ms. DOAN. That is my understanding, that both parties moved.

Mr. DAVIS OF VIRGINIA. And maintenance was one of the key elements of this?

Ms. DOAN. Yes, I believe it was.

Mr. DAVIS OF VIRGINIA. A key element throughout. So I think it

is important for this committee to understand how schedules work,

how these are negotiated. That is certainly appropriate. But I think

the key here is all you were doing as the Administrator was to just

keep the negotiations going.

Ms. DOAN. That is exactly right.

Mr. DAVIS OF VIRGINIA. Because you recognized what it could do

to the schedules, what it could do to Government buying options

if you didn’t reach an agreement. You never dictated an agreement,

did you?

Ms. DOAN. That is exactly correct.

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Mr. DAVIS OF VIRGINIA. You didn’t walk into a room and negotiate directly with SUN Microsystems, did you?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. You didn’t appoint the contracting officers that negotiated it, did you?

Ms. DOAN. No, I did not.

Mr. DAVIS OF VIRGINIA. So I think if Members have questions,

we are asking the wrong person. To my way of thinking, she did

the appropriate thing to try to get a more inclusive schedule. SUN

Microsystems’ business, less than 10 percent of it is with the Federal Government. If we say no to them, they can walk around the

world and sell their products, and they don’t have to sell at discounts here when they can sell at a fuller price other places.

We have held hearings on this before. One of the difficulties is

trying to get companies that traditionally don’t sell to the Government to sell to the Government, where we can get the variety of

prices and the options and the technologies that are being developed in the private sector and apply them to Government. But because Government has a different set of regulations, a different set

of accounting standards, a different set of rules, some companies

just find it disadvantageous to redo all of these kind of things. We

try to work through the procurement process to find options to

bring them in.

So I don’t know that there is anything necessarily improper

about this. Time will tell if this was the right approach or not. It

is hard to say if you save or lose money, because we don’t know

how SUN Microsystems competes with other products that are on

the schedule right now once you have to go to three for Government buyers to choose whether they want SUN Microsystems or

something else on the schedule and get the best deal; is that correct?

Ms. DOAN. That is correct.

Mr. DAVIS OF VIRGINIA. Thank you.

Chairman WAXMAN. Mr. Clay.

Mr. CLAY. Thank you, Mr. Chairman.

Thank you, Ms. Doan, for being here today. Ms. Doan, it is my

understanding that, as Administrator of the GSA, you manage over

$56 billion in contracts. What percentage of the GSA contracts is

currently held by minority owned businesses?

Ms. DOAN. I do not have that fact at this moment. Can you hold

1 minute?

Mr. CLAY. Sure.

Ms. DOAN. Could we followup with you after the record for that

precise number?

Mr. CLAY. You certainly can. I would appreciate a description of

what types of programs you have.

Let me ask you, during your 10 month tenure, how many contracts have you personally awarded to minority owned businesses?

Ms. DOAN. I haven’t personally awarded any contracts to minority or large businesses.

Mr. CLAY. OK. All right. You stated in your written testimony

that it was outrageous for the committee to cite that, as an example of the personal assistance Ms. Fraser provided to you—she assisted your high-school aged daughter in securing a congressional

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internship—you denied that Ms. Fraser assisted you and called the

suggestion despicable; yet, in her interview with the committee Ms.

Fraser was asked this very question and confirmed that she called

a Senate office to seek an internship for your daughter.

Here is what Ms. Fraser told the committee: ‘‘I am really glad

you asked that question because I think it is a really—if there is

any humor in this whole situation, you know, when she said to me,

you know, Edie, I am so dedicated to the Republicans, you are so

dedicated to the Democrats. My daughter needs to learn there is

another side. And so I called the administrative assistant to Senator Stabenow and said, ’This high school kid, you know, all their

high school has internships in Government and in the Senate.

Would you take her on?’ ’’

So, Ms. Doan, it was Ms. Fraser who said that she did this for

you. By the way, no one has suggested that your daughter did anything wrong by accepting Ms. Fraser’s help, but perhaps you would

like to reconsider your statement to Congress that Ms. Fraser did

not provide any assistance, in light of Ms. Fraser’s clear testimony

that she did.

Ms. DOAN. What I believe I said—and if I am incorrect maybe

I will check my letter that I wrote to the committee. What I said

is that this is a 40-year program that is hosted by Madiera High

School that has been well documented. It provides 90 interns, nonpaying, throughout the entire Federal Government. I am happy to

hear that she had support from so many different people, but this

is how—they have interns in many, many offices, both Democratic

side and the Republican side, the House, and the Senate. Every

junior at this high school does this. It is a very well-recognized program. That is what I believe, something of that nature I think I

wrote in that.

I still believe, and I will say this, the fact that you are willing

to keep pushing this point absolutely indicates your willingness to

drag whatever kind of extraneous things in. There is nothing

wrong. I was not the Administrator at the time. This is a high

school child——

Chairman WAXMAN. Will the gentleman yield?

Mr. CLAY. I will yield to the gentleman from California.

Chairman WAXMAN. I just want to read that, what you said in

your statement. This is what you said: ‘‘Over 3 years ago, as a high

school junior, my daughter participated in a mandatory schoolsponsored community service program. School counselors worked

directly with Members of the House and the Senate to arrange for

entry-level, non-paying positions. My innocent daughter was assigned to the staff of Senator Debbie Stabenow.’’

Now, what Mr. Clay is pointing out is that we know it wasn’t

school counselors but your good friend who was the one who recommended her.

I yield back the balance.

Ms. DOAN. Am I allowed to comment at all, because this——

Chairman WAXMAN. If there is a question.

Mr. CLAY. Please do.

Ms. DOAN. There is nothing on this that is incorrect. There is

nothing on this that is incorrect. The high school counselors at

Madiera work with the House and the Senate, and they absolutely

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have internships. We have probably people on this committee who

have these interns here.

Mr. CLAY. Well, Ms. Doan, why would Ms. Fraser make this

statement? Can you shed any light on that?

Ms. DOAN. No, I can’t shed any light on that. I can share with

you that people often try to help when other people say there are

things that are of interest or concern or things. This is what we

do. We care for one another. People do things like this. This is very

kind of her to have done that.

Mr. CLAY. And that is all fine and well, but I think that the concern here is that this is conflicting testimony between Ms. Fraser

and you and what you have told committee investigators.

Ms. DOAN. This is not conflicting testimony. It says here that

high school counselors worked directly with Members of the House

and Senate to arrange for entry-level, non-paying positions.

Chairman WAXMAN. The gentleman’s time has expired.

Ms. DOAN. This is a statement of fact.

Chairman WAXMAN. I would ask unanimous consent that I have

a minute so I can pursue this issue, without objection.

Mr. DAVIS OF VIRGINIA. Without objection, but I would like to

also reserve just a clarification question at the end of that.

Chairman WAXMAN. Absolutely.

Ms. Doan, I know you are outraged about this whole thing. You

expressed it with a great deal of emotion. But your statement was

it was school counselors. We pointed out that Edie Fraser claimed

that she helped her daughter. I am not saying that there is anything wrong with it, but it is something——

Ms. DOAN. Thank you. I appreciate that, because the implication

there was that there was something improper going on.

Chairman WAXMAN. No, the implication of it was that she helped

you. You had a relationship, she helped you, and evidently you

wanted to help her with that contract, and there was a give-andtake kind of relationship.

Ms. DOAN. Mr. Chairman, with all due respect, Congressman,

Congressman Clay prefaced it—and I don’t have the exact transcript, but he prefaced it with something like, ‘‘In the process of her

performing personal services for you.’’ That was improper, in my

mind. That implied a certain amount of impropriety.

Chairman WAXMAN. But you don’t deny that she helped?

Ms. DOAN. She apparently did help, and I am very grateful that

she did.

Chairman WAXMAN. OK. That is fine. Let’s just get the record

complete.

Mr. DAVIS OF VIRGINIA. Mr. Chairman.

Chairman WAXMAN. Yes, Mr. Davis.

Mr. DAVIS OF VIRGINIA. I have had interns from the Madiera

School. It is not in my District. It is not uncommon for kids from

Madiera to apply across the Hill, and it is not uncommon, by the

way, for people to recommend people that are applying. These are

unpaid internships during the school year when, frankly, many offices can use interns. Summer time it is different. These are during

school year. And we work directly with the counselors, because we

have to fill out forms——

Ms. DOAN. Exactly.

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Mr. DAVIS OF VIRGINIA [continuing]. Telling how the kids do. I

don’t see any conflict in this at all. If this is the best you can do,

I think we are wasting our time.

Chairman WAXMAN. Well, I certainly don’t think it is a conflict.

I think people ought to understand the complete picture.

Let’s see, Mr. Lynch, it is your turn now.

Mr. LYNCH. Thank you, Mr. Chairman. Thank you for having

this hearing. I also thank the ranking member.

We seem to be getting tied in knots about your testimony, previous testimony, current testimony. I am getting a little frustrated,

just like you are, trying to figure out what you are exactly saying.

You just told us a moment ago that you weren’t involved with

the SUN Microsystems deal, you were just involved in the oversight of it. Now, you weren’t directly involved, you just did your job

in an oversight capacity.

Now, I just want to compare what you said to Senator Grassley.

This is a quote. When asked about the SUN Microsystems, you

said, ‘‘I had no knowledge of the negotiations or the basis of the

decisions made regarding this contract.’’ That is a very broad statement, and it is completely inconsistent with what you have said

here today. I just want to tell you—and this may go further. I know

you know that you are under oath. What is troubling to me is

this—and there is a lot of peripheral stuff, but there is some central stuff about what is being testified to here today.

You have testified to the facts that at the GSA headquarters, the

headquarters of this agency, a Government institution, that there

was a meeting, a presentation, a teleconference at which you were

present. The object of that meeting, especially, was for influencing

the election. More specifically, the object of the meeting was to target, and, if successful, remove Members of Congress who are

charged with the oversight of your agency. This goes to the integrity of the electoral process that has been violated here, not just

in the Hatch Act but also embodied in the Voting Rights Act.

There were Members of this Congress that were targeted by a

Government agency, by a sitting Government agency with the head

of that agency present, and also special assistants to the White

House present to influence the election. That is central to what you

did. That is central.

Now, you haven’t claimed the fifth amendment, which maybe you

should have, but you have come here today and you have testified,

you have really adopted the Sergeant Shultz defense, you know

nothing. But I want to just recount what you have testified here

today. And I came here in an objective fashion just to listen to

what you had to say.

You have testified that you remember the time you have arrived.

You testified as you knew who was in the meeting, who was not

in the meeting. You testified that you know who called in and who

did not call in. You testified as to what food was served. You testified—if you want to read the transcripts, go ahead—you remember

the folks that were telecommunicated in from California. You testified that you saw before a PowerPoint presentation, which is an enhanced cognitive medium, but then you have a blank spot in your

memory as to what you recall about the PowerPoint presentation

targeting Members of Congress.

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We have the testimony of six Republican colleagues who have

your own testimony as to what can we do to help the Republican

Members of Congress, and that is terribly troubling, in my estimation. Maybe this will be worked out in the subsequent investigations. I am not sure. But certainly just the core facts that you have

helped establish here, you know, leads me to believe that there is

further action necessary to be taken on this, and it is not good for

you. I have to say, your own testimony has been very damning, I

think, that you have had this very selective lapse of memory before

Members of Congress.

You know, I think the whole episode is utterly disgraceful, in my

opinion, and, you know, maybe there are Members here that think

that you helped yourself here today by testifying, but I need to be

quite honest with you. The only thing that you have removed here

is the original impression that it was incompetence, it was incompetence, because now it appears that your action was purposeful.

I just have to say, as a Member of Congress trying to uphold the

Constitution, trying to uphold the integrity of Government, that I

am deeply disappointed in your testimony here today and I will do

everything I possibly can to get to the bottom of this and to restore

the integrity that I think has been diminished by your own actions.

Thank you.

Chairman WAXMAN. The gentleman’s time has expired.

The Chair wishes to recognize himself for 5 minutes just to ask

a few questions. Maybe I won’t even take the full 5 minutes.

There were two contracts that we have been discussing. One was

the SUN Microsystems contract. In your March 13th letter you

said, ‘‘I was not briefed by FAS in August or at any other time on

the SUN Microsystems contract deficiencies.’’ FAS is the Federal

Acquisition Service.

Ms. DOAN. Right.

Chairman WAXMAN. Now, we interviewed Mr. Williams and we

asked him whether he briefed you on the SUN contract and he said

he did. He told us directly that he updated you on the SUN situation several times during the contract negotiations. Was he lying

to us? How do you explain this contradiction?

Ms. DOAN. Mr. Chairman, I don’t want to ask you to read it back

to me again, but I think——

Chairman WAXMAN. You said that you weren’t involved and he

said he briefed you.

Ms. DOAN. In the August timeframe, I believe we talked about.

Is that what we talked about? I think I would much rather sit

there and, you know, add up the dates and stuff like that and organize it for you and provide it.

Chairman WAXMAN. Did he brief you?

Ms. DOAN. Some time in early September.

Chairman WAXMAN. I am not asking you when. Did he brief you

on this contract?

Ms. DOAN. Well, I thought the date was the issue we were discussing here.

Chairman WAXMAN. Well, your March 13th letter you said he

had not briefed you. I presume this is before you agreed to the contract. Did he brief you or not?

Ms. DOAN. Well, no, he didn’t brief me.

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Chairman WAXMAN. He did not brief you?

Ms. DOAN. He just spoke, you know, once on the phone. I don’t

know.

Chairman WAXMAN. Only once on the phone.

Ms. DOAN. I honestly cannot—we never sat down and actually

had a briefing. We just had a brief discussion on the phone.

Chairman WAXMAN. On how many occasions?

Ms. DOAN. He said one or two times. I am just following, maybe

twice.

Chairman WAXMAN. OK. And then on the——

Ms. DOAN. I think the issue is August versus September.

Chairman WAXMAN. Do you consider it a briefing if it is a telephone conversation when someone tells you about a contract?

Ms. DOAN. No. I consider a briefing when you are actually provided with substantive information related to a matter at hand.

That is what I consider a briefing.

Chairman WAXMAN. I would just point out that you sent a letter

to Senator Grassley to say, ‘‘I was not briefed by FAS—‘‘ Federal

Acquisition Service—‘‘in August or at any other time on the SUN

Microsystems contract deficiencies.’’ That is a pretty clear statement, but now it seems as if you are backing off that statement.

You did have a couple phone conversations telling you about it?

Yes, you did have phone conversations? No, you didn’t have a couple phone conversations?

Ms. DOAN. I don’t consider that a briefing.

Chairman WAXMAN. OK. That is Clintonian. Now, on the other

contract, you were directly involved in the contract for Edie Fraser,

weren’t you?

Ms. DOAN. I do not believe that was a contract, but yes, I was

directly involved in directing the action to try to start a study for

minority and women-owned and diversity——

Chairman WAXMAN. OK. You were directly involved in that. But

these others you were indirectly involved. You are the head of GSA,

and that is the agency in charge of giving out those contracts, so

other things were delegated to other people, but on the Edie Fraser

contract you were personally involved; is that a fair statement?

Ms. DOAN. Yes, it is a fair statement at the beginning of the action. After I approved the draft outline, I then moved it on to be

processed through the contracting shop and the office for the procurement.

Chairman WAXMAN. OK. Thank you.

Well, I want to thank you.

Does the gentleman have any additional questions he would like

to ask, maybe make some comments about the way life is going?

Mr. MICA. Could you yield?

Chairman WAXMAN. Certainly.

Mr. MICA. How much time?

Chairman WAXMAN. Whatever time is left, I would be glad to

give it to you.

Mr. MICA. OK. Well, again, let’s just take it in reverse order. The

$20,000 contract that you attempted—and it wasn’t a contract, was

never awarded.

Ms. DOAN. It was not.

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Mr. MICA. OK. The video conference, this says the White House.

The first chart there is the White House Political Office? Is that

what that says, the White House Political Office?

Ms. DOAN. Yes.

Mr. MICA. Is that who conducted that? Did you initiate the videoconference?

Ms. DOAN. No, I did not.

Mr. MICA. OK. And then SUN Microsystems, the third question,

you were never fully briefed? You never sat down and had a full

briefing about the terms of the contract, and most of the problems

had occurred before you got there?

Ms. DOAN. All of that is true.

Mr. MICA. In 15 years, you know, they tried to get you on this $20,000, and this is embarrassing, too, what they are doing to your

daughter, 2004 to intern with a Democrat Senator. But I have

never seen such an attempt to go after a minority appointee of any

administration in this fashion, and the thing about this——

Chairman WAXMAN. The gentleman’s——

Mr. MICA [continuing]. It will discourage others from ever coming

into the——

Chairman WAXMAN. The gentleman’s time has expired.

Mr. MICA [continuing]. What you are doing here today.

Chairman WAXMAN. Ms. Doan, thank you very much for your

presentation.

Ms. DOAN. Thank you, Chairman. Thank you, Ranking Member

Davis. Thank you, committee members.

Chairman WAXMAN. We will probably ask you some further questions for the record.

We are now pleased to call our next witness, Mr. Brian D. Miller,

the Inspector General of GSA. Before assuming this post in 2005,

Mr. Miller worked as Federal Prosecutor in the U.S. Attorney’s Office for the Eastern District of Virginia, where he helped prosecute

Zacharias Mousaui and John Walker Lindt. In this position, he also

supervised numerous audits and investigations involving procurement, grant, and health care fraud.

Mr. Miller, I thank you very much for being here. Your prepared

statement will be in the record in full. I would like to ask you now

to proceed with your oral statement.

STATEMENT OF BRIAN D. MILLER

Mr. MILLER. Thank you, Mr. Chairman, and thank you, ranking

member, and thank you, members of this committee, for inviting

me here to testify.

I would also like to thank Senator Grassley for taking the time

to testify here this morning about the importance of oversight and

the role of an Inspector General. Indeed, it is a privilege for me——

Mr. MICA. Parliamentary inquiry and procedure. Was the witness sworn in?

Chairman WAXMAN. The gentleman is correct. It is our practice

to swear in all witnesses, and we want to put you under oath, as

well.

[Witness sworn.]

Mr. MILLER. Thank you, Mr. Chairman.

Chairman WAXMAN. I thank you. Now let’s start all over again.

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Mr. MILLER. OK. It is a privilege to be here this afternoon. I

have devoted most of my professional life to public service. For

roughly a decade-and-a-half before becoming Inspector General at

GSA I served as a career Federal attorney. As a U.S. Attorney in

the Eastern District of Virginia, the ranking member’s own District, I worked on a variety of cases, including terrorism cases, as

the chairman has noted.

In July 2005, the Senate confirmed me as Inspector General of

GSA, and it is, indeed, an honor for me to lead the Office of the

Inspector General. Our audits and investigations safeguard the integrity of Government operations and provide cost avoidance for

taxpayers in the billions of dollars.

For years my office enjoyed good working relations with GSA

managers who appreciate our work. My relationships with former

GSA Administrator Stephen Perry and Acting Administrator David

Bibb were excellent. They recognized that independent oversight

was a tool for good management. And I have been trying to establish a good working relationship with Administrator Doan and will

continue to do so.

It is important for me to note here that it is my duty, as Inspector General, to investigate allegations of wrongdoing and to conduct

audits. I would not be doing my job if I were to look the other way

at credible allegations of wrongdoing or pass over an embarrassing

audit, as Senator Grassley has noted this morning.

The taxpayers and the Congress rely on IGs to do their job to ferret out fraud, waste, and abuse, and to help their agencies run

more efficiently and effectively.

At the end of the day, it is about accountability, accountability

to the President, to the Congress, and, most importantly, to the

American taxpayers.

Now, this committee has asked me to address three issues in

connection with the actions of the Administrator: first, her intervention in a major contract negotiation, SUN Microsystems; second, her sole source award of a contract to a friend; and, third, her

alleged role in encouraging use of GSA resources for partisan political purposes.

Six months ago GSA awarded a contract extension to SUN

Microsystems. Our auditors showed that it was a bad deal for the

Government. The contracting officer thought it was a bad deal. All

of GSA’s management, up to and including Commissioner Jim Williams, agreed it was a bad deal. And a notice was sent to SUN that

the contract would end.

But then Administrator Doan found out and word went out that

SUN was a strategically important vendor and that the Administrator wanted the contract awarded. The contracting officer could

not extend it, so a new contracting officer was assigned. Eight days

later, the contract was renewed.

Why is this such a bad deal? Well, the auditors warned that

SUN’s past charges looked fraudulent and told GSA management.

Frankly, the deal should have been terminated when allegations of

potential fraud first surfaced.

I agree with Senator Grassley that once the potential for serious

fraud was identified, the deal should have been slowed down, at

the very least. Instead, it was speeded up. None of this would have

211

happened if Administrator Doan had not intervened and directed

GSA to make the award.

Now, turning to the Public Affairs Group contract, Administrator

Doan was wrong in attempting to award a sole source contract to

the company of a personal friend, Edie Fraser. She was wrong to

keep trying to get this project awarded to her friend, even when

told the first contract was improper. And she was wrong to try and

cover up the extent of her improper efforts.

Administrator Doan has tried to say that she did nothing improper and that, anyway, it wasn’t a contract, but that is not what

her own General Counsel has told her. Administrator Doan has

claimed that she did everything she could to clean up the mess, but

that is not what her own General Counsel told this committee.

Turning to the Hatch Act issue, when my investigators received

credible information about a potential Hatch Act violation, we referred the matter to the appropriate investigatory agency, the Office of Special Counsel. That is our duty.

Now, in tandem with these events, the Administrator has advocated for reduced oversight and has made many statements to that

effect. Unfortunately, the Administrator has demonstrated a disregard for the very contracting rules that oversight is meant to detect.

I notice my time is out. I would like to thank the committee, and

I stand ready to answer questions.

Thank you.

[The prepared statement of Mr. Miller follows:]

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Chairman WAXMAN. Mr. Davis.

Mr. ISSA. Mr. Chairman, he will be right back. Do you want us

to begin?

Chairman WAXMAN. Why don’t you just finish your statement.

We did give Ms. Doan additional time, and I think it would be only

fair to let you have additional time to complete your statement.

Mr. MILLER. Thank you, Mr. Chairman. There is not much left.

In fact, she may have violated basic rules of conduct for an agency head while, at the same time, worked to pare back the mechanisms for uncovering such violations. What may explain both is the

lack of respect for law and law enforcement.

I would be happy to answer questions.

Chairman WAXMAN. Thank you very much.

Mr. Davis, I am going to recognize you to control 15 minutes, and

we will let you go first, then our side will control 15 minutes.

Mr. DAVIS OF VIRGINIA. Mr. Miller, I heard you say that you are

accountable to the White House, to the Congress, and to the American people.

Mr. MILLER. That is correct, Congressman.

Mr. DAVIS OF VIRGINIA. Aren’t you also, under the statute, accountable to the head of the agency to keep the establishment and

the Congress fully informed?

Mr. MILLER. Indeed.

Mr. DAVIS OF VIRGINIA. You mentioned that?

Mr. MILLER. Yes, sir.

Mr. DAVIS OF VIRGINIA. You didn’t mention that.

Mr. MILLER. Well, I would be happy to mention it now.

Mr. DAVIS OF VIRGINIA. And you are not an accountant; is that

correct?

Mr. MILLER. Pardon me?

Mr. DAVIS OF VIRGINIA. You are not an accountant; is that correct?

Mr. MILLER. That is correct.

Mr. DAVIS OF VIRGINIA. You are not a CPA; is that correct? You

are a prosecutor by career, right?

Mr. MILLER. Correct.

Mr. DAVIS OF VIRGINIA. Your prepared statement today takes

credit for saving the Government a lot of money. How much did the

investigation of this diversity study cost in your own staff time and

expense? Any idea?

Mr. MILLER. Congressman, I don’t have that number right now,

but let me tell you that when this complaint originally came in, it

came in with documentation to our office. It was a credible complaint. We looked at it. We decided that it was credible. We had

to interview the Administrator.

I personally went up and told the Administrator that we had received this complaint and that my agents would have to go up and

interview her.

Mr. DAVIS OF VIRGINIA. You didn’t save any money on this one,

though, did you, because it was canceled? Am I right? You didn’t

save any money on this one?

Mr. MILLER. Part of our job, Congressman, is——

Mr. DAVIS OF VIRGINIA. Just yes or no.

Mr. MILLER [continuing]. Is to investigate——

243

Mr. DAVIS OF VIRGINIA. Is that a yes or a no? Did you save any

money on this investigation? The answer is no, isn’t it?

Mr. MILLER. I believe it——

Mr. DAVIS OF VIRGINIA. Because the contract was never——

Mr. MILLER. There was no money paid on that contract. That is

correct.

Mr. DAVIS OF VIRGINIA. Now let me ask you this. What obligation

does the IG and his investigators and his staff have to prevent disclosure of investigative information to outside sources in ongoing

investigations? Can you tell us what your responsibility there is

under the statute?

Mr. MILLER. I will, but I hadn’t finished my answer to the last

question.

Mr. DAVIS OF VIRGINIA. I have limited time and I want to have

the answer to this question.

Mr. MILLER. OK. The question is responsibilities to safeguard

confidential information. We do have a responsibility to do that and

we do take measures to safeguard confidential information, Congressman.

Mr. DAVIS OF VIRGINIA. Now, do you think that the premature

disclosure of investigative information, even when permitted by

law, can cause substantial harm to an ongoing investigation?

Mr. MILLER. It is possible, Congressman.

Mr. DAVIS OF VIRGINIA. Do you think that the GSA IG investigative information in the ongoing investigation of Administrator

Doan was provided to the Washington Post reporters who authorized the January 19, 2007, article entitled, ‘‘GSA Chief Scrutinized

for Deal with Friend?’’

Mr. MILLER. Congressman, we did not disclose any part of the investigative file to anyone who is not authorized to see it. I don’t

know how the Post reporters got that information. I was surprised

to see it.

Mr. DAVIS OF VIRGINIA. Did you do any investigation to see how

it might have gotten out of your office?

Mr. MILLER. Well, we did ask around. In fact, we received a call

in January, January 25th, from Mr. Nardoti, Administrator Doan’s

private attorney. He called our lead investigator and said that on

January 19th the Washington Post reporters had documents, they

showed Administrator Doan documents that came out of the investigative file. I think they claimed it was her supplemental statement correcting mis-statements in the earlier——

Mr. DAVIS OF VIRGINIA. That information, under the law,

shouldn’t get out; isn’t that correct?

Mr. MILLER. That is correct, Congressman.

Mr. DAVIS OF VIRGINIA. And your office—you are under oath—

had nothing to do with this?

Mr. MILLER. I am confident that my office had nothing to do with

it. If I may finish, we immediately looked into this. Mr. Nardoti

said that the Post reporter showed the information to Administrator Doan and to the acting General Counsel. When we heard

this, we immediately interviewed the acting General Counsel, who

said that didn’t happen, that the Post reporters did not show him

any documents from the investigative file, and that to his knowledge they had not.

244

Mr. DAVIS OF VIRGINIA. What did you do to investigate the leak

at that point, though? It is clear that something had been leaked,

correct?

Mr. MILLER. Well, at that point the head of my investigations

said that the allegation by Administrator Doan’s attorney was not

credible. In fact, the lead agent called him back and told him that.

Mr. DAVIS OF VIRGINIA. So there was no documents that were

leaked to the Post that shouldn’t have been out there; is that correct?

Mr. MILLER. Congressman, they didn’t come from my office.

Mr. DAVIS OF VIRGINIA. Did you investigate——

Mr. MILLER. I am confident my office did not disclose any——

Mr. DAVIS OF VIRGINIA. What did you do to ensure that it didn’t?

Did you do an investigation in your office to make sure that they

didn’t? Did you talk to employees, put anybody under oath, or anything?

Mr. MILLER. Well, Congressman, I am trying to answer your

question——

Mr. DAVIS OF VIRGINIA. I want you to answer it.

Mr. MILLER [continuing]. As best I can. It is a little involved, and

I ask you to bear with me, but at that point our lead agent called

Mr. Nardoti back and told him what the General Counsel said, and

he gave a nervous laugh and said, Well, gee, I will have to go talk

to my client again. Well then he calls back on February 1st with

a changed story, and the revised story said that Ms. Doan saw the

statement in the Post reporter’s hands, and that he also talked to

another party that indicated subpoenaed e-mails had been turned

over to the press, and he then told us he was filing a PCIE complaint.

Now, part of the mystery was solved 2 weeks later on February

13th. The attorney for PAG—Public Affairs Group—sent a letter to

us saying they were producing an e-mail for the first time to us because they had learned that it had been leaked to the press. That

is before it even got to our office. PAG tried to characterize it as

outside the scope of our request, but it was a September 6th e-mail

ending in 309.

At any rate, that second half of Mr. Nardoti’s statement was

clearly explained that it came from the Public Affairs Group.

Mr. DAVIS OF VIRGINIA. OK.

Mr. MILLER. I am trying to answer in the sense that we also

learned that there was a complaint filed with the PCIE, and we did

not want to interfere with the investigation of the PCIE.

Now, we also asked the Administrator for copies of documents

that she was producing to this committee relating to the PAG investigation, and in connection with that Mr. Nardoti wrote us a letter saying she would not produce them in light of the PCIE complaint.

I responded to her, in response, preparing for that response, I did

ask everyone who had access to those documents, whether or not

they had disclosed them to anyone except other Governmental officials with a legitimate interest in the investigation. So we did

make inquiries. We did not—if your question is did we take sworn

statements, the answer is no.

245

Mr. DAVIS OF VIRGINIA. OK. The first public disclosure of the

problems between you and the Administrator were revealed in a

Post article December 2nd. Do you remember that article?

Mr. MILLER. I do generally.

Mr. DAVIS OF VIRGINIA. The Post stated that they had obtained

notes from a private meeting you had with the Administrator. One

of your assistants took notes in that meeting, and those notes

found their way to the Post. The Post wrote that, according to

these notes, the Administrator compared Miller and his staff to terrorists. Do you know anything about that leak?

Mr. MILLER. I don’t know where the Post reporters got those

notes. I do——

Mr. DAVIS OF VIRGINIA. You don’t think they got them from Ms.

Doan, do you?

Mr. MILLER. I don’t think that they got them from Ms. Doan.

Mr. DAVIS OF VIRGINIA. Is it appropriate——

Mr. MILLER. They did not——

Mr. DAVIS OF VIRGINIA. Is it appropriate for the notes of one of

your staff to appear in the Washington Post in a meeting like that?

Mr. MILLER. Congressman, those notes—we did share some of

those comments and those notes the congressional staff, and I don’t

know where the Post——

Mr. DAVIS OF VIRGINIA. Which congressional staff? when did you

do that?

Mr. MILLER. We shared them with congressional staff, maybe in

October.

Mr. DAVIS OF VIRGINIA. OK. Which congressional staff?

Mr. MILLER. I believe that I shared them with Representative

Platts’ staff.

Mr. DAVIS OF VIRGINIA. OK.

Mr. MILLER. I may have shared them with other oversight staff.

Mr. DAVIS OF VIRGINIA. You think they may have leaked it? Of

course, this meeting that we are talking about here, these notes

that found their way, you are assuring me they didn’t come from

your office?

Mr. MILLER. Congressman, as far as I know, those notes did not

come from my office to the Post reporters.

Mr. DAVIS OF VIRGINIA. And you hadn’t talked to the Post reporters prior to the article on December 2nd; is that correct?

Mr. MILLER. Well, they did call me and asked me to confirm the

read out of the notes, and I said, look, I am not going to confirm

or deny, I am not going to comment on the relationship, my relationship with the Administrator. And then I talked about the positive mission of my office.

I did have one prior conversation with the Post reporters several

months before that about how GSA contracts operate, in general.

Mr. DAVIS OF VIRGINIA. Did you initiate that conversation or did

they initiate that conversation?

Mr. MILLER. I believe they did.

Mr. DAVIS OF VIRGINIA. OK.

Mr. MILLER. And we talked about firm fixed price contracts versus time and material contracts. There was not one word mentioned about my relationship with the Administrator or any of the

issues going on between me and the Administrator.

246

Mr. DAVIS OF VIRGINIA. Now, you say that Allen Swindeman,

General Counsel, told this committee that he asked the Administrator several times to terminate the contract and that she refused.

That was your briefing to the committee; is that correct?

Mr. MILLER. I’m sorry. I didn’t hear you.

Mr. DAVIS OF VIRGINIA. That Mr. Swindeman told this committee

that he had asked the Administrator several times to terminate the

contract and that she refused, talking about the $20,000 contract?

Mr. MILLER. Yes, I believe that is on the Web site in the chairman’s letter.

Mr. DAVIS OF VIRGINIA. But he never told the committee any

such thing that we are aware of. Are you aware of him telling the

committee that, or did you get that off the Web site?

Mr. MILLER. I got that off of the Web site and the chairman’s letter.

Mr. DAVIS OF VIRGINIA. So you getting the information from the

majority in this case. OK.

Have you given any information about the committee’s investigation that you have included in your report and testimony today,

have you been given any information about the committee’s investigation that you have included in your report and testimony today

besides that?

Mr. MILLER. I would have to go back and look at the report. We

did look at the chairman’s letter, and I would have to go back and

take a close look and see——

Mr. DAVIS OF VIRGINIA. How much of your testimony comes from

what the majority has put on their Web site and how much of it

comes from your independent investigation, because the information about Mr. Swindeman’s discussion, from our investigation, is

flat out false. So what does that say about your credibility?

[No response.]

Mr. DAVIS OF VIRGINIA. You don’t have any independent investigation; you just took it off the majority Web site. That is what

you are saying?

Mr. MILLER. That is not correct, Congressman. Most of my testimony is taken from our——

Mr. DAVIS OF VIRGINIA. I asked about that particular issue.

Mr. MILLER. Most of the report is based on the investigation that

my office did.

Mr. DAVIS OF VIRGINIA. Most of it?

Mr. MILLER. Most of it is——

Mr. DAVIS OF VIRGINIA. But not all of it?

Mr. MILLER. There——

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. MILLER. The statements that Mr. Swindeman——

Mr. DAVIS OF VIRGINIA. It seems that a significant——

Chairman WAXMAN. Wait. Give him a chance to answer.

Mr. DAVIS OF VIRGINIA. He has answered it. He just took this off

your Web site. Am I wrong? That is where you said you got the information?

Mr. MILLER. Well, the statements that I was referring to that

Mr. Swindeman made, I actually said he said to this committee——

Mr. DAVIS OF VIRGINIA. Correct. That is why I was moving off.

I’m not going to let him run the clock out on us.

247

Let me just ask this: it seems that a significant area of disagreement between you and the Administrator centers on the OIG’s performance of contract support audits; is that fair to say?

Mr. MILLER. I don’t believe so.

Mr. DAVIS OF VIRGINIA. The disagreement between you and the

Administrator, is it your view that it is important that your office

provide this audit assistance on contract support?

Mr. MILLER. Mr. Congressman, I think my disagreement with

the Administrator is more on oversight. She has made numerous

statements that she would like to reduce oversight.

Mr. DAVIS OF VIRGINIA. But you have also, in your own testimony you went after this SUN Microsystems, and that is contract

support, correct? I mean, a significant part of your testimony

today——

Mr. MILLER. Sure.

Mr. DAVIS OF VIRGINIA [continuing]. Was focused on that. So all

I was saying is a significant area of disagreement was on contract

support. Now, my understanding is that in most agencies they either use DCAA or auditors that do acquisition support exclusively,

as opposed to auditors from the IG’s office. Isn’t that true in a lot

of agencies?

Mr. MILLER. I don’t know what the practice is at other agencies.

Mr. DAVIS OF VIRGINIA. You don’t?

Mr. MILLER. I know that many of them do use DCAA.

Mr. DAVIS OF VIRGINIA. Thank you.

Mr. MILLER. What is different about our agency is that there was

a GAO report, and the GAO recommendation was that—and it was

agreed to by GSA. It was actually an arrangement developed and

established by the Office of Management and Budget. It was a

Bush administration initiative to set up this reimbursable agreement for us to do these pre-award price audits.

Mr. DAVIS OF VIRGINIA. But it doesn’t happen that way in a lot

of agencies. That is my only point.

Mr. MILLER. That is correct.

Mr. DAVIS OF VIRGINIA. OK. Is your office paid by the GSA contracting activities for this audit support?

Mr. MILLER. There is a reimbursable arrangement where they reimburse us for our audit activities.

Mr. DAVIS OF VIRGINIA. How much per year does your office receive for these services, ball park?

Mr. MILLER. Ball park, it is between $4 and $5 million.

Mr. DAVIS OF VIRGINIA. What is your total budget?

Mr. MILLER. Total budget for last year was around—I would

have to get back to you with the specific number.

Mr. DAVIS OF VIRGINIA. Ballpark, $40 million?

Mr. MILLER. About $43, maybe more, maybe less.

Mr. DAVIS OF VIRGINIA. Is it your understanding that your office’s role in providing pre-and post-award contract audit reports is

to support the contracting officer?

Mr. MILLER. Yes, generally.

Mr. DAVIS OF VIRGINIA. That is not an oversight role in that

sense, correct?

Mr. MILLER. I’m sorry?

248

Mr. DAVIS OF VIRGINIA. Your role in providing pre-and postaward contract audit reports is to support the contracting officer

who makes the decision. You are not vested with making the decision?

Mr. MILLER. That is correct, Congressman.

Mr. DAVIS OF VIRGINIA. You were advisory, correct?

Mr. MILLER. That is correct.

Mr. DAVIS OF VIRGINIA. I mean, do they always take your advice?

Mr. MILLER. No, they don’t always.

Mr. DAVIS OF VIRGINIA. OK. So it is not odd for a contracting officer to say thank you very much but I’m going to settle it, correct?

Mr. MILLER. They have a warrant and they are responsible

to——

Mr. DAVIS OF VIRGINIA. Correct.

Mr. MILLER [continuing]. Exercise their own judgment.

Mr. DAVIS OF VIRGINIA. In our acquisition system, it is the contracting officer that makes the final decision to award a contract,

exercise an option, or take any other contract action, correct?

Mr. MILLER. Yes.

Mr. DAVIS OF VIRGINIA. As I understand it, one of the roles of

the Office of the Inspector General is to impartially evaluate the

agency’s programs and functions. Do you see any tension between

the evaluation role and the role of advisor to the contracting officer

in a particular acquisition?

Mr. MILLER. Do I see any conflict between——

Mr. DAVIS OF VIRGINIA. Any tension, not conflict. Do you see any

tension between your evaluative role and the role of advisor to the

contracting officer in a particular acquisition?

Mr. MILLER. Congressman, I think I would have to think about

that question.

Mr. DAVIS OF VIRGINIA. That is fine. You can get back to us on

it.

I think my time is up now. We will have more questions. Thank

you.

Mr. MILLER. Mr. Chairman, may——

Chairman WAXMAN. Yes.

Mr. MILLER [continuing]. I explain, I guess, an answer a little

more fully? We did interview Mr. Swindeman. The report of his

interview is in our investigative report, so we did rely on those

statements from Mr. Swindeman, as well. I would like to point that

out.

Chairman WAXMAN. Thank you.

Mr. DAVIS OF VIRGINIA. Wait a minute. I am looking at the list

of witnesses and exhibits for today, and I don’t see it. I have a

number of others. I am looking here at the report of investigation

for official use only. This is on page 26, if you want to move to page

26. That is your list of witnesses and exhibits, and I see a number

of exhibits but I do not see that.

Mr. MILLER. With the Chair’s indulgence may I consult with——

Mr. DAVIS OF VIRGINIA. Sure. Please. And maybe you could be

confusing Moentrip, who was the acting General Counsel. Is that

what happened?

Mr. MILLER. OK. I will withdraw.

Mr. DAVIS OF VIRGINIA. That is fine. For the record, we just——

249

Mr. MILLER. Thank you, Congressman.

Chairman WAXMAN. The gentleman’s time has expired.

The Chair will recognize himself to pursue some questions.

By the way, your investigation of the leak was more extensive

than the White House investigation of the outing of the CIA agent

which was involving national security. They did nothing. We had

a hearing on that a couple weeks ago. They did absolutely nothing.

They didn’t ask any of the employees, didn’t ask anybody who had

access to this information how it got out, how it was being marketing to different press people, even though it affected national security and might have threatened the life of a covert CIA agent.

Mr. DAVIS OF VIRGINIA. Maybe they could transfer Mr. Miller to

the White House and everybody would be happy here.

Chairman WAXMAN. Then he could make political presentations

about the upcoming Republican campaigns.

I want to ask you about a statement that you made regarding

the SUN contract. You said that Ms. Doan’s actions were a breach

of GSA’s fiduciary duty to U.S. taxpayers. Why did you say this?

Mr. MILLER. Well, because for the first SUN contract—there

were two contracts with SUN prior to that were consolidated into

one SUN contract. We did a post-award audit. We did two postaward audits on that and learned that SUN had overcharged us by

$27 million, so the first SUN contract cost $27 million in defective

pricing. To push through another contract with SUN following that

is what I was trying to express was not in the best interest of the

taxpayer, especially when we had done a pre-award audit indicating that the rates, the discounts that SUN was offering were not

the best discounts to the Government. They were offering commercial customers better discounts than they were to the U.S. taxpayers.

Chairman WAXMAN. And that was inconsistent with the rules,

wasn’t it?

Mr. MILLER. It was. Yes, sir.

Chairman WAXMAN. Now, you also said it is the first time we are

aware of in which an administration has personally intervened in

this way. Why did you say that?

Mr. MILLER. My staff is not aware of an Administrator becoming

involved in any negotiation in the same way at any time in the

past.

Chairman WAXMAN. Well, she says she wasn’t involved.

Mr. MILLER. Our office has not been aware of any Administrator

being involved, even in the way that she says she was involved,

with the e-mails and with talking with the Commissioner of FAS,

and certainly with the word going out that this was a strategically

important contract and needed to go through. On August 29th she

called an impromptu meeting with the head of audits of my staff

and with my counsel, and at that meeting she told them how important the SUN contract was and that it needed to go through.

They attempted to explain the programs with the SUN

negotiation——

Chairman WAXMAN. And this was with Ms. Doan, herself?

Mr. MILLER. With Ms. Doan, herself.

Chairman WAXMAN. Never would have thought that.

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Mr. MILLER. She cut them off when they tried to explain the

problems with the SUN negotiation.

Chairman WAXMAN. Now, they were trying to explain to her

what her own contracting officers had said, that if they go ahead

with this contract the taxpayers were going to have to pay millions

of dollars in additional funds for a service than otherwise would be

the case; is that right?

Mr. MILLER. That is right.

Chairman WAXMAN. So she acted as if she wasn’t involved in

this. I guess the question is what does involved mean. It is sort of

like what is a briefing. A briefing seems to be in her mind only a

sit-down meeting where charts and pointers are involved. But you

actually had a sit-down meeting with her, or was it a telephone

conversation?

Mr. MILLER. Actually, it was the head of my audits, Andy

Pagent.

Chairman WAXMAN. Yes.

Mr. MILLER. He was the Assistant Inspector General for Auditing

and the Counsel for the Inspector General, who went up and

briefed her on this, at very short notice.

Chairman WAXMAN. Yes. Well, if they didn’t give this contract to

SUN Microsystems, wouldn’t they have had other bidders come in

and have some competition and see if somebody else could do the

job at a cheaper amount?

Mr. MILLER. Mr. Chairman, that was our position. In fact, our

Deputy Inspector General suggested that one way to resolve the

impasse was for GSA to team up with NASA, the NASA soup, to

force SUN to give the Government better discounts, because by

joining forces with NASA we have more leverage on SUN and we

would be able to push the discounts to get greater discounts at a

better price for the taxpayer.

Chairman WAXMAN. Well, that would have been good. Did Ms.

Doan seem to worry that NASA might provide a contract with SUN

Microsystems and that she wouldn’t get the money that GSA gets

for that contract; is that right?

Mr. MILLER. Well, that is what I understand was her point to the

head of my auditing and to the counsel. She did mention the NASA

soup. Now, I wasn’t there so I can’t say for sure what was said.

Chairman WAXMAN. Well, the only comment I would make to

that is her job is to protect the taxpayers, not to have the taxpayers pay more just so she could get a percentage for her agency.

Mr. MILLER. Well, at GSA, obviously, if the price goes up GSA

gets a commission, so to speak, a fee, and so the revenues going

into GSA actually increase, but if the price goes down the fee decreases. By our pre-award audits, we can actually push. If the contracting officer accepts our recommendations, the prices can actually go down and it may result in fewer funds going into GSA.

Chairman WAXMAN. How are NASA soup prices compared to

GSA’s? I am told NASA’s are often better. Is that the case?

Mr. MILLER. Mr. Chairman, I don’t know personally. I understand that NASA soup may actually adopt GSA’s price negotiations. I’m not sure.

Chairman WAXMAN. Now, this is a schedule that goes out Government wide, and GSA is supposed to bargain tough, hard——

251

Mr. MILLER. Yes.

Chairman WAXMAN [continuing]. And negotiate the lowest prices,

because otherwise that is what everybody in the Government assumes they have done when they go out and take advantage of a

contract negotiated by GSA; isn’t that correct?

Mr. MILLER. That is correct. And it does have an impact to resellers, as well. The price negotiation drives the price, the discount

that resellers of the same product sell to Government agencies, so

it can have a massive impact.

Chairman WAXMAN. Well, that involved money. Now let me ask

you about a third statement you made involving Edie Fraser contracting.

Mr. MILLER. Yes, sir.

Chairman WAXMAN. And I gather that didn’t go through, but in

your testimony you said that the record paints quite a different picture than what Administrator Doan told the OIG investigators.

This sounds like you are saying that she was not candid. Why did

you say this?

Mr. MILLER. Well, as I was trying to explain to the ranking member, but I didn’t get a chance to explain, was the allegation came

in. We thought the agent would simply interview the Administrator

and we would close the report, write a letter or report to the White

House liaison, but instead she told a story to our agents that could

not possibly be true. As a result, we had to go forward with our

investigation of the Administrator.

Now, several days later her attorney sent a letter trying to explain that the statements she made were incorrect, inaccurate.

Chairman WAXMAN. What did she say that was not true?

Mr. MILLER. Well, as I recall, I wasn’t actually at the interview,

but what the agents told me about the interview was she denied

signing the contract and she actually folded up the paper to say

that it wasn’t this, it was something like something else, and she

folded it up, and when you put those pieces of paper together you

get two paragraphs that have the same number, and it just was

not a plausible story.

Other statements are statements that it wasn’t a contract, that

she also minimized her relationship with Ms. Fraser.

Chairman WAXMAN. What is the significance? I know she said a

lot today that it wasn’t really a contract. What is significant? Why

does she keep on denying this is a contract? She said it was a draft

outline of the work to be performed, but she has difficulty saying

that the document was a binding contract. I find it surprising a

person coming from a business background, as Ms. Doan does,

would have so much trouble understanding whether or not she has

entered into a contract. Was it a contract or was it not a contract?

Mr. MILLER. I believe it was a contract, Mr. Chairman. Also, the

General Counsel at the time, Allen Swindeman, believed it was a

contract, as did the now Acting General Counsel, Lenny

Loewentritt. In fact, that was the reason why there had to be a letter of termination. In fact, when asked about the letter of termination, I believe Ms. Doan said that was to correct the perception

on the part of Ms. Fraser that there was a contract, when, in fact,

we saw e-mails back and forth between her and John Felts after

the termination letter went out where John Felts says, Well, I will

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have to tell Edie that we have more work to do on our end to get

this moving forward.

Chairman WAXMAN. You started to say before that she minimized her relationship with Ms. Fraser. What is the significance of

that?

Mr. MILLER. Well, over a 3-year period Ms. Doan has paid over

a half million dollars to Edie Fraser’s Public Affairs Group, to Ms.

Fraser for consulting and other——

Chairman WAXMAN. That is interesting, because under questioning from the Republicans they made the statement that Ms.

Doan—so Ms. Doan did pay money to her, so she was working for

Ms. Doan?

Mr. MILLER. That is correct. It was for sponsorships and consulting. The consulting services was to promote Ms. Doan personally

and as President of NTMI, and the fee for that was $20,000 a

month, and it is interesting to note that the fee that Ms. Doan

fixed was $20,000, and she said that she decided that on her second or third day at GSA.

Chairman WAXMAN. We are told over and over again $20,000 is

a small sum of money, and, besides, it didn’t happen. She didn’t actually enter the contract. So do you think it is a big deal or not?

Mr. MILLER. Mr. Chairman, I think what the problem is, as I explained, we thought that our agents would interview her, she

would accept responsibility and admit the mistake. Instead she did

not. She told a story and it forced us to continue to investigate. It

forced us to issue subpoenas. We had to wait for documents to

come back on subpoenas.

I think the issue is that of candor, of accepting responsibility, of

being truthful with law enforcement. She mentioned that—and I

think she said publicly—that she worked hard to terminate the

contract, the relationship, when, in fact, the e-mails and the documents that I believe are in the committee’s possession show that

she was still trying to get this going as late as, I believe, early September, September 4th or so.

I mentioned the August e-mail where——

Chairman WAXMAN. That is astounding. You are saying she

wasn’t candid with law enforcement. Are you saying law enforcement is your independent investigation?

Mr. MILLER. Yes. I meant our agents.

Chairman WAXMAN. Your agents?

Mr. MILLER. Yes.

Chairman WAXMAN. OK.

Mr. MILLER. And the statement from her attorney admits that

she made mis-statements to our agents. That explains the need for

the supplemental statement.

Chairman WAXMAN. Yes. Can you explain the leadership role the

GSA Administrator plays in the Federal acquisition community

and why it is important for her to demonstrate a familiarity with

the Federal acquisition regulations? Your investigation concluded

that when she awarded this contract she ignored several of the

most basic rules of Federal contracts, such as a principle that contracts should be awarded on a competitive basis.

Mr. MILLER. Yes, Mr. Chairman. As head of the premier civilian

procurement agency, it is important that the chief of that agency

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follow the procurement rules. As Inspector General, our job is to

make sure that everyone follows those rules and procedures.

Chairman WAXMAN. That is a basic principle of Government contracting that you award a contract based on what is best for the

Government, not based on your friendship with somebody; isn’t

that a correct statement?

Mr. MILLER. That is correct, Mr. Chairman. And, you know, at

the time, Public Affairs Group was owned, I believe ultimately, by

General Electric, so it was a subsidiary of General Electric at the

time.

Chairman WAXMAN. Now let me just conclude, because I see the

yellow light is on. You raised these concerns. It sounds like you had

a pretty acrimonious relationship with her. You didn’t feel she was

being candid with you and your agency, even though she has an

obligation to be. Her response was to try to cut your budget, wasn’t

it?

Mr. MILLER. Mr. Chairman, there were efforts on the part of the

Administrator to try and cut our—actually, prevent us from presenting our budget to OMB, and she actually stopped and said I

had a proposal to add criminal investigators, and she simply would

not——

Chairman WAXMAN. You felt that was a recrimination against

your criticism? Yes or no, and then I have one last question before

my time is up.

Mr. MILLER. I don’t want to go there.

Chairman WAXMAN. OK. The last question I want to ask you is:

are you concerned about the slides that involved a political presentation on the premises of GSA that was Republican partisan from

the political person at the White House about how people ought to

get involved, or at least know what is happening for Republicans,

and about her statement that a number of witnesses gave to us

that she said, How can we help our candidates in this next election?

Mr. MILLER. As I have said, a confidential source told our agents

all that, and it was very concerning. We did our duty, which was

to refer to the appropriate investigatory agency, the Office of Special Counsel.

Chairman WAXMAN. Do you know whether everybody does this?

It sounded to me from her defenders was that everybody does it,

all the agencies do that, all administrations do that. Do you know

that to be the case, and does that mean everybody violates the law?

Mr. MILLER. I certainly hope that is not the case, Mr. Chairman.

As Inspector General, I have sworn an oath to follow the law. As

Administrator, she has sworn an oath to follow the law. I hope that

other officials follow the law.

Chairman WAXMAN. Thank you very much.

We will now proceed to Mr. Platts for 5 minutes.

Mr. PLATTS. Thank you, Mr. Chairman.

First, Inspector General Miller, I appreciate your testimony and

also your service at GSA.

Mr. MILLER. Thank you, Congressman.

Mr. PLATTS. I apologize for being in three other places at the

same time and having to run back out of here, but I know the one

issue was raised about the documents that were shared with my

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committee staff and then of the same topic was addressed in a Post

story.

One, I appreciate the Inspector General having met with my

staff, as we sought to, I would say, take a similar approach as Senator Grassley to try to diminish the problems that were between

the IG’s office, Administrator, and my staff had conversations with

OMB, with Clay Johnson’s office to try to resolve these issues.

Mr. MILLER. Thank you.

Mr. PLATTS. But I wanted to make clear that, in the documents

that were shared by you—and I appreciated your working with

us—that, neither prior to the story being published or since have

any of my staff that were part of that meeting or I shared any of

those documents with the Post or any other journalist to address

this issue through the media. I think it is important that we understand our efforts were in a similar vein to Senator Grassley to just

trying to have a good Government resolution of the issue.

Mr. MILLER. Sure.

Mr. PLATTS. But I do appreciate your service and efforts in taking your responsibilities seriously.

I apologize that I am not able to stay. I am going to yield the

balance of my time to the ranking member.

Mr. MILLER. Thank you.

Mr. PLATTS. Thank you.

Mr. MILLER. Congressman, I appreciate your help and your

staff’s help on these issues. Thank you.

Mr. DAVIS OF VIRGINIA. Mr. Miller, let me ask who else did you

brief besides Mr. Platts, because you threw his office out there. Did

you brief Mr. Grassley’s staff at that time?

Mr. MILLER. I believe I—it is hard for me to reconstruct.

Mr. DAVIS OF VIRGINIA. Well, we are trying to reconstruct where

the documents came from, and Mr. Platts has said he didn’t. Did

you brief Mr. Waxman’s staff at that point?

Mr. MILLER. I don’t believe I did. You are asking me to think

back from July through——

Mr. DAVIS OF VIRGINIA. Correct. If you don’t remember, you don’t

remember.

Mr. MILLER. When did the story come out? December?

Mr. DAVIS OF VIRGINIA. Correct.

Mr. MILLER. And I met with oversight, I met with Senate oversight staff, Homeland Security and Governmental Affairs.

Mr. DAVIS OF VIRGINIA. Let me ask you this. You were on the

invite list for the January 26th brown bag lunch. Did you attend?

Mr. MILLER. I did not.

Mr. DAVIS OF VIRGINIA. Did anyone from your office attend?

Were there any Schedule C’s that attended?

Mr. MILLER. No, sir.

Mr. DAVIS OF VIRGINIA. You made a referral to the Office of Special Counsel, correct?

Mr. MILLER. That is correct.

Mr. DAVIS OF VIRGINIA. Did the referral include the White House

for the slides, or did you just include Administrator Doan?

Mr. MILLER. The referral referred the allegations. As I understand it, a confidential source talked to agents in my office. They

contacted agents at the Office of Special Counsel——

255

Mr. DAVIS OF VIRGINIA. Correct. I am just saying——

Mr. MILLER [continuing]. Telling them what the allegations were.

Mr. DAVIS OF VIRGINIA. In terms of the allegations, were the allegations directed at the Administrator or were they also to Mr. Jennings at the White House who gave the political slide that has been

the subject today?

Mr. MILLER. I would have to go back and look at the file, Congressman. I believe I gave a copy of the referral to the chairman

on his written request.

Mr. DAVIS OF VIRGINIA. We have not received a copy of the referral, Mr. Waxman, from your staff. It would be helpful to have that.

My question here is was this labeled just at Administrator Doan

or was it the White House, as well? And you don’t remember?

Mr. MILLER. I don’t know, Congressman.

Mr. DAVIS OF VIRGINIA. Can you ask your staff? Would anyone

here know?

Mr. MILLER. I think——

Mr. DAVIS OF VIRGINIA. So you supplied it to Chairman Waxman’s staff, but you haven’t provided it to us, basically?

Mr. MILLER. Well, the chairman wrote a letter to me asking for

it.

Mr. DAVIS OF VIRGINIA. Right. And he copied me.

Mr. MILLER. I don’t know if he copied you or not.

Mr. DAVIS OF VIRGINIA. Generally you do.

Chairman WAXMAN. Yes, we always copies letters to you and we

always share the information we get in response to those letters,

so I can’t explain it.

Mr. DAVIS OF VIRGINIA. OK. We would like to know that.

Chairman WAXMAN. We will check our files.

Mr. MILLER. I will provide a copy of the referral to you.

Mr. DAVIS OF VIRGINIA. I just want to know if it is aimed at Administrator Doan or if it is also aimed at the White House, who,

after all, called the meeting. It was not called by Administrator

Doan, correct?

Mr. MILLER. Congressman Davis, I wouldn’t say that it was directed to any one person or another person.

Mr. DAVIS OF VIRGINIA. So you are not even saying here it was

directed at the Administrator?

Mr. MILLER. What we got were credible allegations that appeared

to be a violation of the Hatch Act. My investigations office referred

it over to the Office of Special Counsel.

Mr. DAVIS OF VIRGINIA. But the media reports and the other allegations seemed directed just at her, and she didn’t call the meeting, and at the same time she didn’t make the presentation, which

if you have watched today has really been the subject of some controversy, whether the administration was right to come in and

make these presentations in a Federal building. She wasn’t the one

who originated this.

So my question would be—and I guess this goes over to Mr. Waxman—is there a retaliation going on or anything. Was this directed

at her or was it directed at the whole presentation, and you don’t

know the answer to that is what you are telling me? You made a

referral to the Justice Department or just the—not to Justice, or

did you just make it——

256

Mr. MILLER. Office of Special Counsel.

Mr. DAVIS OF VIRGINIA. Just to the Special Counsel on Hatch

Act?

Mr. MILLER. Yes. As I explained earlier—I think you may have

been out of the room—I have to do my duty as Inspector General.

Mr. DAVIS OF VIRGINIA. I agreed with that. I am just asking if

that included the White House or just the Administrator.

Mr. MILLER. When we get credible allegations in, we refer them

to the appropriate investigatory agency.

Mr. DAVIS OF VIRGINIA. I understand, but my question is, the allegations, if you look at this, would have included both, would they

not?

Mr. MILLER. Well, as I understand it, the Hatch Act issue is

within the sole jurisdiction of the Office of Special Counsel.

Mr. DAVIS OF VIRGINIA. Correct. But the referral——

Chairman WAXMAN. Mr. Jennings could well have been exempt

from the Hatch Act.

Mr. DAVIS OF VIRGINIA. He may or may not have. Do you know

if Mr. Jennings was exempt from the Hatch Act or not?

Mr. MILLER. I am not an expert in the Hatch Act.

Mr. DAVIS OF VIRGINIA. Exactly my point. Actually, Ms. Doan

has some exemptions under the Hatch Act, as well, as the Administrator.

Mr. MILLER. The Office of Special Counsel is, and that is why,

when we——

Mr. DAVIS OF VIRGINIA. But you understand my point. My point

is was this inclusive of the entire presentation and the slides from

the administration, or was this just about Ms. Doan, and you don’t

know the answer?

Mr. MILLER. I think what happened was someone told our agents

that this happened, it looked like it was wrong, and that it may

violate——

Mr. DAVIS OF VIRGINIA. What happened?

Mr. MILLER. I think the allegation—and, again, I wish I had the

referral in front of me, but——

Mr. DAVIS OF VIRGINIA. You knew this was the subject when you

came here today, so I am——

Mr. MILLER. Well, as I understand it, I also knew that my office

was not very involved in this, that we handed it off to the Office

of Special Counsel. But, as I understand, the confidential source

said that there was a presentation on some sort of election results,

maybe. I don’t quite remember what—then, again, I would rather

just go back and check the documents and then respond.

Chairman WAXMAN. We will hold the record open to receive it.

Mr. DAVIS OF VIRGINIA. I just wanted to get him while he was

under oath though to get it, because when he sends them later I

don’t know if that applies, and I just want to make sure you don’t

know the answers right now. You will get back to us?

Mr. MILLER. Yes, I will get back to you.

Mr. DAVIS OF VIRGINIA. OK.

Chairman WAXMAN. Mr. Issa.

Mr. ISSA. Thank you, Mr. Chairman.

257

I am going to continue a little bit along that line. When you were

speaking to Chairman Waxman and you referred to law enforcement officers——

Mr. MILLER. Yes?

Mr. ISSA [continuing]. Now, that term is really a term from your

years as a U.S. Attorney, Assistant U.S. Attorney, isn’t it? And, in

fact, that is really your career? You are a career prosecutor, you

are not an accountant?

Mr. MILLER. No, sir.

Mr. ISSA. You don’t understand how to deal with bureaucracies,

where the problems are? I know you are smiling, but I want to understand this. You are not just about the Hatch Act. In fact, that

is not within your jurisdiction. Your jurisdiction is supposed to be

to find the waste, fraud, and abuse within the GSA, right?

Mr. MILLER. Correct, and to investigate credible allegations of

wrongdoing.

Mr. ISSA. OK. And it seems like we are spending an awful lot of

time on a $20,000 non-contract, but let me just run you through

a couple of questions here, because I want to understand it related

to Administrator Doan.

She could have taken $200,000 worth of her employees’ time and

had them do research and prepare and try to consult, right? She

has the ability to have those people work for her and do what she

needs to do?

Mr. MILLER. Congressman, first of all, I do believe it was a contract. I believe that is what the General Counsel then concluded,

Allen Swindeman, and also the acting——

Mr. ISSA. I appreciate that, but——

Mr. MILLER [continuing]. The acting General Counsel, Lenny

Loewentritt.

Mr. ISSA. Right. I appreciate that, but that is a personal service

contract, if we are going to put the word contract on it. It was a

request for a service that would cost $20,000 which she wanted

done in order to further the office’s ability to execute things. And

I want to simply ask you, she could have, in fact, gone to her people and said, go study and read and spend $200,000 accomplishing

the same thing? Wouldn’t have been a problem at all, right? She

has the ability to use her own resources, millions and millions of

dollars worth of human beings’ time, to do that? As the IG, I am

assuming you can answer that with some credible validity.

Mr. MILLER. Well, Congressman, I would assume that she would

also look at the in-house capability to do that job, as well——

Mr. ISSA. Right. I asked you a question——

Mr. MILLER [continuing]. And she would follow all the procurement rules.

Mr. ISSA. No. You know, the point is I am asking the questions,

I would like the answers to my questions.

Mr. MILLER. Sure.

Mr. ISSA. I believe that you have been on a witch hunt and that

this is, in fact, an IG who, instead of looking at the waste, fraud,

and abuse, is going after one person, a big prosecution, if you will,

of one individual, and that is my opinion. We will see in the long

run how it pans out. But I do see $20,000 in an agency of $54 billion, and I am going back to my questions. You are not really comVerDate 11-MAY-2000 14:07 Feb 04, 2008 Jkt 000000 PO 00000 Frm 00261 Fmt 6633 Sfmt 6633 C:\DOCS\40153.TXT HGOVREF1 PsN: HGOVREF1
258

fortable looking into the nuances of all the contracts. You picked

this $20,000 service agreement in order to go after; is that correct?

Mr. MILLER. That is not correct, Congressman. I would really

like the opportunity to try and explain to you——

Mr. ISSA. My time is very short. It is 5 minutes, so when I ask

a question that is a yes or no I will take a yes or no, and you are

welcome to it, or a little beyond that.

Mr. MILLER. Absolutely not. It is not a witch hunt.

Mr. ISSA. OK. What other areas are you working on in the $54

billion that is being spent by the GSA?

Mr. MILLER. Well, we recently settled a case with Oracle and PeopleSoft for $98.5 million. That was settled in October. I am Vice

Chair of the National Procurement Fraud Working Group in the

Department of Justice.

Mr. ISSA. Is that as a result of your position, or is that something

you had before you came to this position?

Mr. MILLER. I was appointed to that when it was formed in October.

Mr. ISSA. You know, look, I have no question you are a fine prosecutor with a great history of being able to do those things. I am

just trying to understand why a mistake which was corrected by

the GSA, itself, the contract, if you call it that, was canceled, even

though there is nothing in that contract that says it would be canceled, it was canceled without a penny being spent.

My real question is: when you said earlier if Ms. Doan had said,

oh, I made a mistake, you implied that would have been the end

of it. Now, in your years as a prosecutor, do cases end if you think

they are criminal or wrong? Do they end because somebody says I

am so sorry? And her belief that it wasn’t a contract and she didn’t

do anything wrong, does that somehow change the facts on the

ground for you, because that is what you said here under oath

today was that, in fact, if she had just apologized it would have

been OK, if she had just admitted that.

Mr. MILLER. Well, Congressman, first of all, I didn’t say if she

just apologized. My point was that this was a credible allegation.

We have a responsibility. I don’t have a choice. I have a duty to

followup on credible allegations of wrongdoing. This was a credible

allegation. It came complete with documents.

Mr. ISSA. Because my yellow light is on, I just want to do one

followup. She, in fact, said she didn’t think it was a contract. As

such, she wasn’t apologetic for it, and that is what caused you to

continue on with the prosecution, is what you said here today.

Chairman WAXMAN. The gentleman’s time is expired. You will be

given opportunity now to answer the question.

Mr. MILLER. Thank you, Mr. Chairman. I think that is not what

I said, Congressman. What I said and what I meant was that we

have a duty to followup on allegations. I went up to her personally

and say, you know, I’m sorry, but our agents are going to have to

come and interview you. We have this complaint.

We fully expected that she would be totally forthcoming with our

agents and that would explain the whole matter, there would not

be any other leads to followup on, and that we would just close it

out. I was actually wondering who do I write the letter to—is it the

White House liaison—because this does not happen very often. And

259

the agents come back and said no, she told a story that they did

not believe was a correct story, an accurate story, and then we had

to make a decision. We had the followup to see, gee, what are the

facts here. I do have an obligation to follow the facts.

Chairman WAXMAN. Thank you.

Mr. MILLER. And no more, but no less.

Chairman WAXMAN. Thank you, Mr. Issa.

Mr. Mica, I think you are next.

Mr. MICA. Thank you, Mr. Chairman.

Sorry I didn’t get to hear all of it. I heard your testimony, but

not all of the questions. I hope I don’t repeat any.

Mr. Miller, one of your responsibilities as the Inspector General

is to look at things that aren’t going right or problems with contracts within GSA; is that correct?

Mr. MILLER. Generally, yes, sir.

Mr. MICA. Were you aware of, like, say, in a human resources

situation, it may or may not have been important to you, but were

you aware of some of the failings as far as GSA in getting—I guess

they were going to get a failing score or they got a failing score on

some of the diversity issues in regard to GSA. Were you aware of

that?

Mr. MILLER. We were aware of that issue and that problem, yes,

sir, and——

Mr. MICA. Did you investigate it, or was there any review by

you? Did you ever see the memo that was referred to that Ms.

Doan did not read but she was briefed on, by Mendosa?

Mr. MILLER. Congressman, I am not exactly sure what you are

referring to, but there is an SBA score card——

Mr. MICA. Yes.

Mr. MILLER [continuing]. That I believe came out in December

2006, that gave an F rating to the GSA.

Mr. MICA. A failing. But, again, this wouldn’t be a concern, but

you were not aware of it?

Mr. MILLER. To the extent that we are part of the agency, we are

concerned about that. It doesn’t fall within the mission of the Office

of the Inspector General.

Mr. MICA. Well, again, I think one of the things that Administrator Doan, her concern, and probably rightfully so, an African

American female Administrator of agency, one of her concerns was

to come in here in this position from the private sector and see the

public sector getting a failing score, or about to get a failing score,

maybe for a second time. I guess she was really trying to push this

contract to get a review through this group. Was it Diversity Best

Practices, Ms. Fraser? She was really pushing that, wasn’t she?

Mr. MILLER. Congressman, for her to be involved in those issues

is perfectly fine. I understand that. Our concern was we got an

allegation——

Mr. MICA. But she was trying——

Chairman WAXMAN. Would the gentleman yield? Just one point

for the record.

Mr. MICA. Yes.

Chairman WAXMAN. That failing score wasn’t something that motivated it. That failing score was after this contract had fallen

through.

260

Mr. MILLER. That is what I understand, Mr. Chairman.

Mr. MICA. It is my understanding that GSA already had a reputation for a failing score, that this isn’t like a new revelation, and

she was briefed that they were going to get a failing score and was

trying to do something about it, but it wasn’t very important to

you, but she was really pushing this because I think even the General Counsel had advised her. She had signed off on this contract,

but was the contract executed, fully executed?

Mr. MILLER. I believe it was, Congressman.

Mr. MICA. But she was really pushing this to get this diversity

study? And you advised her not to, or was that the General Counsel, Mr. Allen Swindeman—is it Swindeman?

Mr. MILLER. I believe Allen Swindeman strongly counseled

her——

Mr. MICA. You did not advise her? It was Mr. Swindeman?

Mr. MILLER. That would have been the General Counsel’s role.

Mr. MICA. OK. And Mr. Swindeman or the General Counsel allegedly told the committee that they had evidence that he repeatedly advised that the contract be terminated; is that——

Mr. MILLER. That is my understanding.

Mr. MICA. But you never advised that. Did he advise you that

something was wrong?

Mr. MILLER. Mr. Swindeman.

Mr. MICA. Yes, the General Counsel. I don’t think Doan was

going to call you.

Mr. MILLER. Well, it would not have been his role. He did not

advise us.

Mr. MICA. Well, how did you find out, then?

Mr. MILLER. We received a complaint, an anonymous complaint

with documents of the contract.

Mr. MICA. And was that before or after?

Mr. MILLER. I guess it would be after the contract was signed.

Mr. MICA. After the contract was signed.

Mr. MILLER. I don’t recall the precise date. I can look it up.

Mr. MICA. But when did the General Counsel contact you?

Mr. MILLER. Pardon me?

Mr. MICA. Did the General Counsel contact you?

Mr. MILLER. No.

Mr. MICA. It was an anonymous?

Mr. MILLER. It was an anonymous——

Mr. MICA. OK. Then did you contact him?

Mr. MILLER. Who?

Mr. MICA. The General Counsel. You get a complaint——

Mr. MILLER. Our agency——

Mr. MICA. First thing I would have done is call the General

Counsel and say, I have a complaint here that she is trying to push

this contract that has been signed, and you advised her against it.

Did you talk to him?

Chairman WAXMAN. The gentleman’s time has expired, but

please answer the question.

Mr. MILLER. My agents did interview Mr. Swindeman. They also

interviewed Mr. Loewentritt of the General Counsel’s office. Our

obligation was to followup on the contract, on the allegation. We

261

had the allegation, the complaint, and the contract. We then, our

agents interviewed the Administrator.

Chairman WAXMAN. Mr. Shays.

Mr. SHAYS. Thank you.

Mr. Miller, I believe the Inspector Generals have a vital role to

play. I get uncomfortable when I think they focus on minutia and

then ignore big pictures. Frankly, you know, this is a——

Mr. MICA. Could you yield for just——

Mr. SHAYS. Let me just make my points.

So I have a problem with that. And the second issue I have a

problem with is I have a problem if I feel like an Inspector General

is just doing something to get you, and so when I look at this meeting that I think never should have happened and I know that you

were invited, what I find curious is why someone didn’t go to the

chief of staff of the Secretary or the Administrator and say, you

know, this is a really dumb idea. I think it borders on a bad meeting. Was it just that you knew there was a meeting but you didn’t

know what was going to happen in the meeting?

Mr. MILLER. That is correct. I get e-mails for these brown bag

lunches all the time because I am a Presidential appointee appointed by President Bush, and I am copied on all of those——

Mr. SHAYS. You didn’t know what the purpose of the meeting

was?

Mr. MILLER. I looked at the e-mail briefly, and went on to my

other e-mails.

Mr. SHAYS. So the answer is, like, other people come before you

looked at the—but did it make clear in the e-mail what it was

about?

Mr. MILLER. I think what I read was that it was Mr. Jennings

coming over for a brown bag.

Mr. SHAYS. That is it?

Mr. MILLER. That is all I recall.

Mr. SHAYS. OK. The next issue I just want to ask you, with the

issue of the contract, the diversity contract, basically I look at it

and say no contract, no service performed, no money transferred,

end of story. What am I missing in this?

Mr. MILLER. Thank you for asking that. I think what you are

missing is when our agents interviewed the Administrator they received a story that couldn’t possibly be true, which forced us to continue to investigate to find out what happened.

Mr. SHAYS. To me, no contract, no money spent, no service performed. That is the way I look at it.

But let me yield to my colleague, the ranking member. Did you

want to quickly get something?

Mr. MICA. The committee doesn’t have the Special Counsel’s

memorandum, the——

Mr. DAVIS OF VIRGINIA. Yes, do you have notes from the interview of Mr. Swindeman?

Mr. MILLER. I believe we do.

Mr. DAVIS OF VIRGINIA. Could you make those available? And

here is why I ask. Our information—we interviewed him—is that

he wrote one memo to the Administrator. There are no phone calls

and no e-mails. That is at variance with what you are representing.

We just need to see if we can get that squared.

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Let me ask a couple other questions.

You assumed your duties as the GSA IG in July 2005?

Mr. MILLER. Correct.

Mr. DAVIS OF VIRGINIA. And in June 2006, Administrator Doan

assumed her duties. The GSA at that point was experiencing serious fiscal challenges, with the possibility of Anti-Deficiency Act violations; is that correct?

Mr. MILLER. Congressman, I don’t believe that is correct. I believe they were running a surplus of over—I would have to check

into it, but I believe they have always run a surplus, and last year

it was over $400 million.

Mr. DAVIS OF VIRGINIA. OK. So you don’t think that there were

serious fiscal challenges?

Mr. MILLER. There are always serious fiscal challenges, and I applaud Administrator Doan’s attempts to exercise fiscal discipline.

Mr. DAVIS OF VIRGINIA. Did you take any actions in your office

to address the fiscal challenges, or did you feel that wasn’t your

problem, that was part of the rest of GSA? I guess that goes to the

nub of it.

Mr. MILLER. No. We obviously had a very serious fiscal problem,

because Administrator Doan informed us that our 2007 money was

going to be terminated, and so all of the sudden we had $5 million

or $2.5 million——

Mr. DAVIS OF VIRGINIA. I know she——

Mr. MILLER [continuing]. Taken out of our current operating

budget.

Mr. DAVIS OF VIRGINIA. But had you done anything else to

streamline your budget in response to her request to tighten the

budget?

Mr. MILLER. Well, we tightened all around. We had to tighten.

Mr. DAVIS OF VIRGINIA. What did you do to tighten?

Mr. MILLER. Pardon me?

Mr. DAVIS OF VIRGINIA. What did you do in your office to tighten

the belt?

Mr. MILLER. Well, we reduced hiring. We actually looked at——

Mr. DAVIS OF VIRGINIA. Did you put a freeze on?

Mr. MILLER [continuing]. Two dozen auditors were in danger of

RIF, of reduction in force, so we were looking at those.

Mr. DAVIS OF VIRGINIA. That was under her rules, not under

yours. What did you do? What did you do?

Mr. MILLER. No, that was my—I mean, I was looking at how to

manage the office without the reimbursable moneys.

Mr. DAVIS OF VIRGINIA. But, aside from the reimbursable moneys, notwithstanding that, if the agency was undergoing fiscal constraints did you come forward and say, Look I don’t think you need

to take away that money. I will do these to reduce operations. That

is what I am asking. As a loyal member of the team——

Mr. MILLER. OK. I understand your question now. I believe that

I am duty bound, as an Inspector General, to make sure that we

have the resources to do our job.

Mr. DAVIS OF VIRGINIA. Doesn’t everybody? So the answer is you

didn’t do anything?

Mr. MILLER. May I explain?

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Mr. DAVIS OF VIRGINIA. Yes, but my red light is on. I just wanted

to make sure. You can answer that, but also do this. I think every

agency head feels it is their job to do that, and if everybody does

that, when the Administrator comes down and says, can you tighten up, can you let this go, you are all going to say no and you are

all going to complain.

Mr. MILLER. I believe the point you are missing here is we have

a separate appropriate.

Mr. DAVIS OF VIRGINIA. Right.

Mr. MILLER. The money that goes to our office is a separate appropriate. Our request or our budget requests are attached to the

GSA budget. Never before has any Administrator said no, we are

not going to pass it on to OMB and to the Congress or extensively

edited what we said, taking out phrases like fraud, waste, and

abuse. So it is not coming out of the GSA budget. It is a separate

budget.

Mr. DAVIS OF VIRGINIA. Are you the only separate line in GSA?

Aren’t there other agencies that have separate lines in the budget,

as well?

Chairman WAXMAN. That will have to be the last question.

Would you answer it, and then I think we have to conclude this

hearing.

Mr. MILLER. I believe other IGs have separate appropriations.

Mr. DAVIS OF VIRGINIA. But within GSA are there other separate

lines of appropriation?

Mr. MILLER. I do not know the answer to that, Congressman. One very last point is that the $5 million that the Administrator

was taking was still going to be spent. It was not a budget-cutting

issue at all. It was going to be spent. It was simply going to be

spent on small contractors. So it was not a budget issue.

Mr. DAVIS OF VIRGINIA. Let me——

Chairman WAXMAN. Thank you very much.

Mr. DAVIS OF VIRGINIA. Mr. Chairman, let me just ask if we

could keep the record open on that just to clarify some questions

and inconsistencies.

Chairman WAXMAN. Thank you very much, Mr. Miller. We appreciate your testimony. We may have further questions that we

will submit in writing to you, and we would appreciate a response

in writing for the record.

Mr. MILLER. Thank you, Mr. Chair. Thank you, ranking member.

Thank you, Members.

Chairman WAXMAN. Let me just conclude, and I will give Mr.

Davis a chance if he wants to say anything to conclude, but I think

that the basic rules of Government is that Federal agencies are not

to be used for Government politicking. The rules for anybody heading up an agency is that they have to follow the rules that say that

Government resources are not to be used for partisan politics, they

can’t give no-bid contracts to their friends, and they should listen

to their career staff and auditors when it involves millions of dollars out of taxpayers’ pockets.

I just want to close by pointing out what Senator Grassley said.

This investigation is not only worthwhile, but that we would be ignoring our constitutional oversight responsibilities if we didn’t hold

these hearings. I think that it is clear in my mind that Senator

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Grassley was correct. GSA involves billions of dollars, and if we are

seeing millions of dollars squandered I think we ought to speak up

about it, because if money is being squandered it comes out of the

taxpayers’ pockets, and it may be millions today but it could be billions tomorrow if people just don’t follow the rules.

Thank you.

Mr. Davis, any concluding statements?

Mr. DAVIS OF VIRGINIA. Mr. Waxman, let me just say of course

it is appropriate oversight for this committee to look at how all of

our agencies, including GSA, operate. I would have basically favored a hearing today that would have been more programmatic in

terms of looking at the issues in GSA. There are a lot of issues

there. We have the merger of FTS and FSS and how that has operated. I think the issue in terms of SUN Microsystems could be an

interesting exercise. But I think it has become way too personalized in this particular case.

Mr. Miller, I hope that you and the Administrator can patch it

up and work together. We count on everybody working as a team.

That clearly hasn’t happened in this case. I am not going to throw

brick bats in terms of who is to blame, but if we leave here today,

if we can focus and recognize you have a reporting responsibility

to her and you also have independence, and balancing that appropriately is something we rely on you all to do. When it gets to this

stage, I think it becomes way too personal.

Let me just say, in terms of Government politicking, I don’t know

how you take politics out of Government, but we will look at these

issues as we move forward. Mr. Waxman and I have talked about

some issues raised today that are not personal to the Administrator. But I can tell you Cabinet officers are all the time out campaigning for and against Members. I am sure their staffs are part

of that. I had a Cabinet Secretary come in and campaign against

me in my reelection in 1996. I am not sure what the appropriate

balance is. We will explore this in future hearings.

I thank you for being here.

Chairman WAXMAN. We do have laws.

Mr. DAVIS OF VIRGINIA. Yes, we do.

Chairman WAXMAN. And the laws say that you can’t, on Government time, at Government resources, go out and campaign. When

Cabinet Secretaries go out and campaign, they do it at the expense

of the campaign. It may be personal to Ms. Doan because she is

the one heading this agency, but we have had a Senator and her

Inspector General, and I must say my own conclusion is that she

is not always being very candid in telling us the truth, and that

makes her problems much worse, because she has to be honest.

Mr. DAVIS OF VIRGINIA. There is no evidence here that she campaigned at all on Government time. She was sitting there at a

meeting that was called by the White House, and participated in

that.

Mr. MICA. Mr. Chairman, as you summarize, I do think some

positive things could come out of this. I did not know that the

White House could videoconference in this fashion. We might want

to look at that, because I am now learning that this went on, and

even Mr. Miller said he participated or was invited to participate.

That is one thing. I did not know the GSA Administrator didn’t

265

have discretion to do a contract for $20,000 and was prohibited

from doing that.

The third thing I think——

Chairman WAXMAN. Mr. Mica, ignorance of the law is no excuse.

The law is there. The rules are there. She has to follow it.

Mr. MICA. Absolutely.

Chairman WAXMAN. Would you make your concluding statement

so we could adjourn?

Mr. MICA. Absolutely. But another thing I would like to look at

is diversity in some of these agencies.

Chairman WAXMAN. Great.

Mr. MICA. This agency——

Chairman WAXMAN. We will do that.

Mr. MICA [continuing]. Failed.

Chairman WAXMAN. Thank you very much. The meeting is adjourned.

Mr. MICA. They failed. And you failed, too.

[Whereupon, at 3:25 p.m., the committee was adjourned.]

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