4 hearings this week on agency's spending scandal

LARRY MARGASAK Associated Press Published:

WASHINGTON (AP) -- A culture of wasteful spending by the General Services Administration, the real estate agency for federal buildings, comes under scrutiny at four congressional hearings this week.

Two House and two Senate committees are expected to range well beyond revelations that the federal agency spent some $823,000 for a conference in 2010 at a Las Vegas resort.

The House Committee on Oversight and Government Reform will conduct the initial hearing on Monday.

One GSA executive who is a focus of the investigation, Jeffrey Neely, has refused to testify voluntarily and has been subpoenaed to appear at Monday's hearing. His lawyer said the witness will assert his constitutional privilege to remain silent.

Internal GSA memos, obtained by the committees from GSA inspector general Brian Miller, indicate that lavish spending was part of a pattern and became the subject of insider jokes among GSA employees.

One employee even bragged about the conference spending in a rap video that won a prize at the event -- which also included a clown, a mind-reader and a team-building exercise to build bicycles.

Another employee told internal investigators that agency executives kept scheduling award ceremonies to justify giving employees free food at GSA events away from the office. By having the food connected to a ceremony, employees did not have to pay for the meals with their daily expense allowance. But taxpayers picked up the tab.

Neely told investigators that a $2,700 party he threw in his Las Vegas hotel suite was an employee-awards event, according to a transcript of the interview.

"This is an award recognition ceremony ...." Neely insisted to an internal investigator. "That's what this was. That's...not a Neely party right. I actually...it was in a suite that wasn't even mine."

The investigator then confronted Neely with his email saying that he and his wife "are hosting a party in our loft room. There will be wine and beer and some munchies...." There was no mention of awards.

When Neely insisted again it was an awards event, the skeptical investigator told him, "You realize how this looks?"

"I get it that it looks funny," Neely said.

The inspector general has referred Neely to the Justice Department for a possible criminal investigation, according to a congressional committee official who was not authorized to be quoted by name on the subject.

It was not clear what the department was asked to investigate.

Neely, on leave as regional commissioner of the Public Buildings Service for the Pacific Rim, was largely responsible for the Las Vegas conference.

The Oversight Committees released internal memos that showed GSA officials debated last year whether to give Neely a bonus for his job performance. The officials were aware at the time that the inspector general was investigating the conference spending.

The now-resigned GSA administrator, Martha Johnson, granted Neely a $9,000 bonus over the objection of Deputy Administrator Susan Brita.

Brita wrote in a November 2011 email, that "based on what we know already" about the conference and a questionable awards program, "I would not recommend a bonus."

Johnson wrote in an email, "yes on a bonus" in part because Neely had to serve in an acting capacity "forever and a day."