have sent out the word. checks and balances on the regional offices have got to be put in place and many have already. many conferences my understanding have been stopped or reduce fundamental scope, and gsa estimates that nearly a million dollars has been saved by the actions so far. regional financial officers must now report to the chief financial officer. awards programs have been shut down and reimbursements are being demanded from specific employees. the outrageous behavior of a few irresponsible unethical and perhaps law-breaking individuals are overshadowing gsa's achievements following president obama's cost saving directives focused on energy efficiency, reduced computing costs and disposal of unneeded federal property. gsa offers critical services to all federal agencies, but it is time to stop this series of failings that have occurred over four decades and over three administrations.

it is time to send the clearest of signals that this type of conduct and this kind of betrayal of the public trust will not be tolerated. anyone in any agency who puts their own interests bob the country's interests will suffer the consequences. i really want to recognize the efforts to shine a light on the misconduct that took place at gsa. mr. miller, mr. tag her lee knee, thank you for taking deputy administrator susan brita's concerns seriously and following through on your public trust. this committee will support you and encourage to you clean house at the gsa. and before i yield to my friend and colleague, let me put into the record ar addendum that the inspector general brian miller gave us both sides of the aisle today, but he didn't have the time to get it into his had testimony. it goes through the various steps that he believes should be taken at the gsa.

the first one is centralizing the program and budget management, the second is centralizing agency information management, the third is what he calls getting back to basics. gsa feeds to refocus on its core mission procurement and building operations. he said he found that many agency contracting personnel didn't understand fiscal law or the federal travel regulations or were unaware of the existence of agency policies that directly govern their daily work. this is unacceptable, he writes, and i would agree. then he said get out of the matrix as the former gsa administrator testified, gsa employee supervision is not presently linear. it is a matrix because many high level personnel report to two supervisors, each supervisor can deflect supervisory responsibility onto the other or claim to. and he says the matrix is really a sieve. and then he talks about

requiring procurement accountability. and he goes into the fact that the agency needs to make sure that everything that is done has accountability attached to it. and i would just want to thank the ig for this. . it just shows what i think is so important about this hearing when senator inhofe asked me to hold it, what what i was concerned about that we would only do a lookback. we need to do a lookbook and have justice served but we need to look forward. so i'm very happy we have this opportunity to have you here so that we can talk about a is, how we hold people accountable and get to the bottom of the mess over there, but b, how we move forward to make sure that we don't have a repeat of this nightmare that has now occurred over so many decades and so many administrations. and i want to thank the two of you very much for being here

today. and is susan here, susan brita? could you stand? i just wanted to say, i'm personally going to ask you to stand. i want to thank you so much that you had the courage to step out in what was a very difficult situation. thank you. senator inhofe. >> well, thank you, madame chairman. you had mentioned a comment made by senator reid and let me elaborate a little bit more on that. i was surprised when i say the fact that it was held in las vegas would have something to do with it. we're dealing with corrupt people here, madame chairman and what happened in las vegas would just as likely happen if it had been held in chicago or new york or anyplace else. so i think it's totally unfair for people to somehow draw a line there. i do thank you for holding the hearing. i've had a long history with this committee before i came to the senate in '94. i spent eight years on the committee over in the house and it happened that we were a

minority but i was the ranking member on the gsa subcommittee and when you look at the overwhelming stuff they deal with, it is, if there's anyone who has a propensity to do something dishonest, that's where they ought to be. they deal with huge numbers and i've always been concerned about that and the long history of this happening. but the -- i think this serious waste and abuse of the taxpayers' money as well as possible fraud and i understand the office of the inspector general and i applaud the work that brian miller has done on this. it hasn't been easy. i know it's taken an awful lot of time and after the release of the ig report on april 3rd, i sent a letter to the chairman boxer requesting the committee hold a hearing, look at the ig's findings and also requested that both ig brian hill miller testify along with the acting administrator. so the i want to thank you madame chairman for doing that. in a way, if there's any media

here looking for what they saw yesterday, it ain't going to happen here. we got the two the good guys here. >> right. >> we're not going to be accusing anybody. we just want to find out where we can go from here. i think it was articulated well by the chairman. of course, mr. tangherlini, you're kind of in a position where you're going to have to do some pretty uncomfortable things, but i know a little bit about you and i think they've got the right guy doing them. the report describes a number of disturbing findings from the investigation, some of the highlights were the gsa spending on the conference planning was excess i be, wasteful and in some cases impermissible. travel expenses for the conference total ling over $100,000, just not believable. catering costs $30,000. the gsa failed to follow contracting regular laces in.of the procurement associated with the wrc. and wasted taxpayers' dollars. the gsa encouraged excessive and

expenses for food, $146,000 on catered food. $5,600 on semi private catered innen-room parties. it goes on and on. i think that i do want to have the whole statement. this has already been aired throughout the media. it's kind of interesting this morning, madame chairman, i was on the 7:00 cnn. it was supposed to be on this subject. and we went through about a 12-minute interview. they never even mentioned this. so i think people are getting a little tired of it already. nonetheless, it's real, it's a problem. we're going to have to deal with it. since the release of the report, the gsa administrator martha jackson has resigned and head of the public building service and the administrator's top adviser were fired. further, there are ten career employees have been placed on administrative leave. these dismissals highlight the seriousness of the findings of the report. i want to thank our counterparts in the house for their own

responsible oversight and again, thank the chair for getting our own oversight. on the oversight, somebody was asking this morning on a thing that some radio show or something, why are you doing this? it's our constitutional duty. we have oversight responsibility and there's a reason that both the house and the senate do because the house and the senate are aump coming from different polls and it's something that we have to do. there's just not a choice. i say beginning because i believe that this goes beyond our one-time event. i'm concerned that this type of waste has become an embedded part of the culture of the gsa. the conference occurred during a recession and after the president's executive order for and "efficient, effective and accountable government" and calls for the elimination of waste. one can only wonder what kind of wasteful spending would have occurred in a better economy. as a committee with oversight responsibilities over the gsa, i

hope we can find out how this happened and examine the safeguards the gsa has put in place to prevent this from happening again it would be prudent to the continue oversight hearings in the future to ensure this culture of wasteful spending has come to an end. we have an opportunity to restore the public's trust. and this goes beyond this. i can remember when we were a majority. the republicans were a majority and i happened to be the carom of the subcommittee on nuclear. they had not had an oversight hearing in 12 years. and they actually welcomed it. i don't think that any bureaucracy should go without oversight hearings. i'm going to recommend that we expant the number. i have not made a request for them but i think this will perhaps put us in a position where we will do that. i thank the chair for holding the hearing and look forward to hearing from our excellent witnesses. >> thank you very much. senator cardin followed by senator johanns.

followed by senator baucus. >> thank you very much for holding this hearing. i thank the ranking member. this is very important. we all were shocked by the inspector general's report revealing the shocking and shameful extravagant spending that the gsa western regional service division engaged in in 2010. i think it's important to understand that this event is indicative of a culture of this agency that goes back many years. the inspector general miller and the deputy administrator that brought this problem to his attention should be commended for investigating this event, bringing this problem into the public eye, and calling for reforms within the agency. what's most important now is that congress work with the agency to advance smart and thoughtful reforms. the fact is, gsa is vitally important to the function of the federal government. gsa makes sure that federal government pays its rent on time, keeps the lights on in public buildings, manages

federal priorities makes sure federal workers like the scientists as the fda and social workers at va working hard for the public good have the tools and resources they need to get the job done. that said, i often do not agree with gsa's approach to its business. in april of last year, i held a gsa oversight hearing, the first oversight this hearing this committee had had in years to examine gsa's management and service of federal courthouses. i've been in meetings with gsa public officials to discuss prospectus locations for federal facilities where gsa unabashedly refers to the agency in which they are seek space for as the client. and they view themselves as the broker. much the way a private rate firm hired to find office space for a private sector company would. this private sector is perception pervades this public sector agency and i think it may have had its roots in gsa's

problems. many colleagues often call for the government to run more like a business. gsa takes pride in the incorporation of private sector sensibilities and practices into its work. and there are some cues government can take from the private sector in its operations. and management that are valuable. i would argue that gsa is part because of its function as a real estate and fleet manager and contracting agent is so similar to businesses in the private sector has led to the total blurring of the line between what actions are appropriate for a public sector agency to engage in. in reforms that return prokttive and accountability to gsa are in order. gsa's clients are the american people, not the social security administration or the fda or the national science foundation. and the american people are not shareholders, they're taxpayers. the extent of the wastefulness of taxpayers' dollars on the

western regional conference is shocking. perhaps it's reflective of an agency tied so closely to the real estate and property management industry having hired many business professionals along with their business practices from the private sector that the agency thinks it's perfectly acceptable to hold a convention similar to those in the private sector. susie kim, an economist policy reporter for "the washington post" published an interesting commentary piece for the post on april 14th, and i'm chairman, i'll submit the entire article for the record but let me just quote one sentence from her article. "the real aim of contracting services is ultimately neither to make money nor to spend it. but to achieve a greater good." i hope this hearinging will advance that greater good for our nation and for our taxpayers. >> thank you, senator. senator johanns.

>> madame chair, thank you 1re67. let me thank the ranking member and the chair for holding this hearing and i appreciate the attendance of the witnesses today. i'm going to be very, very brief. i'm looking at the clock and i have an ag members meeting in about a half hour so i'm hoping to be here long enough to hear your testimony and if i have questions following that, i'll probably submit those questions in written form for the record, but let me offer just a couple of thoughts. first of all, to the people are -- who have been involved if bringing this to light, we thank you for that. i have to imagine if this happened at this conference, there's other issues out there. i can't imagine that this was just an isolated incident. my experience with federal employees is the vast, vast majority of federal employees are there working hard.

they want to do the right thing. they want to follow the rules. they don't want to get themselves into the kind of problems we see today. that's the vast majority of federal employees. but unfortunately, circumstances like this can really cast things in a very, very poor light. and i might add appropriately so the. these expenses and what you see here in the record is really amazing. i mean really astounding. my interest is going to be today and going forward the question of, what are you putting in place to change the structure and the culture of how gsa operates. often times, gsa is the piece of the federal government that interfaces with the public. they're out there working to negotiate contracts and that sort of thing doing the work that they're empowered to do.

so it's just critically important that whatever happens from here forward, we have something put in place that puts this agency on the right path. gives them the right direction, sets the right course, changes the culture so some senate member is not back here five or ten or 15 or 20 years going through the same things again. so i'm so anxious today to hear from the witnesses. i have not had time to study the addendum, but i appreciate the fact that you're putting out ideas on how we can deal with this in the future. and my hope is that following this hearing, there might even be an opportunity to do some individual visits with senators to say this is what we're thinking about, this is the direction we think this agency needs to go forward. with that, again, madame chair,

thanks for having the hearing. >> thank you so much, senator. senator baucus followed by senator barrasso. >> thank you, madame chair woman. thomas jefferson once said when a man assumes a public trust, he should consider himself public property. what galls me about this is this waste, this extravagance in contrast with a lot of people i met in my state during this last recess who are struggling to make ends meet. for example, in eastern montana, there's something called a bachen formation. it's heavily impacted by oil and gas development. the police force is stretched so thin they can't begin to deal with all the issues. and police officers start a $40,000 -- their salary is $40,000 a year and they see $800,000 spent, what's going on

here. there's a little town of culbertson i visited. they're scratching to try to get money for a sewage system, trying to piece it together here and there. when they see this waste, they go what? we could use that $800,000 for a sewage system in our little town. otherwise, we can't afford it, we can't finance it. ingmar, montana is a very small -- populationing about two hands. trying to save their post office. the rent is $700 perrant who for that post office and they see $130,000 for eight preconference trips to las vegas. you know, it's just galling. it's absolutely galling when you see what the dollars could otherwise be spent for just for legitimate purposes. where people are really struggling. and i just tell you that i think senator cardin touched on it, nor johanns, there's something rotten in denmark. something's not quite right

here. it's not just this. there's got to be a lot more. and i very much credit you, mr. tangherlini for taking over here. i have a lot of trust in you. i think you're the kind of guy who is going to straighten all this out but it's going to take a lot of work, a lot of work. it can't be something we can just deal with not only not -- just got to do the it moderately, can't do that, you've got to go to the core and get the culture problem rooted out at gsa. i just thank you, so much, madame chair for this hearing. i urge and demand of you almost as a person working for 1 million people that this is what they want. this is what my employer's want. i work for all those folks i talked about. you work for all those folks i talked about. everybody at gsa does. that's the public trust that we have to honor. >> thank you very much, senator.

and now we're going to turnton senator barrasso. >> thank you very much, madame carom and senator inhofe for holding this hearing. i want to thank the inspector general and special agents involved in the investigation. i agree with what senator baucus has said and senator johanns. this investigation, it has exposed the waste, fraud and abuse at that time american people really resent so much. this hearing isn't about where this wasteful conference took place. it's really about arrogance and abuse of power. you look at the mission of the gsa's public building service to provide superior value it says, superior value to the american taxpayer. the gsa western region conference was a blatant disregard for the hard working taxpayer of this country. there was a systemic failure to follow the law and abide by the procedures to spend taxpayer dollars appropriately. these events did not occur as a result of a lack of controls.

thee actions occurred because of a culture, a culture of excess within the gsa and a lack of respect for the rules and the regulations and the needs of the taxpayers of this country, a country with 15 trillion dollars in debt. i mean, you run through the list of $6300 for coins in very vet boxes, $9,000 conference yearbook, $58,000 audio visual services and 136,000 preconference scouting trips. plus a clown, a mind reader. the gsa employees involved in this incident have broken whatever small amount of trust that the american people may still have had with this government. and it is not just the excesses that has angered so many. it's also the way in which gsa has conducted business. it's deceived -- it's used deceptive tactics to hide the true costs of the conferences. you found the inspector general's found they provided contracts to vendors that undercut competition by

disclosing other bids, violate the contracting rules by awarding so source contracts to vendor. the contracts in some cases violated set asides for small business. you can go on and on and on. administrators resigned, two senior gsa officials have been fired. ten individuals have been put on administrative leave. but that's not enough. the taxpayers demand more. a few ceremonial terminations and shuffling employees into new positions or departments are not enough. i understand jeff neely at the center of this intelligence is on administrative leave and is still getting paid. plrl neely and those who planned the conference knowingly defrauded the american people so they could throw a party on someone else's credit card. this is unacceptable. we demand that those individuals we must demand that those individuals be held accountable for their actions. this i believe is just the tip of the bice berg and i hope the committee conducts additional oversight hearings on the

excessive gsa spending. madame carom, thank you so very much for holding the hearing and i look more to hearing from them in the future. >> senator boozman. >> in the interests of time, i'd just like to associate myself with the remarks of my colleagues. i appreciate your leadership and senator inhofe's leadership. we have our differences in the committee, but i think this is something that we're all united on and going forward and finding out exactly what's happened and you know, punish those that were involved and then also put in the safeguards so importantly so they'll this won't happen in the future. with that, i yield back. >> thank you so much. both senator inhofe and i appreciate that. now we're going to turn to the inspector general, first. is that all right? with you, mr. tangherlini? >> he all right. >> good morning, chairman boxer, ranking member inhofe, members of the committee. good morning, thank you for the opportunity to be here today.

while my report details what went wrong at gsa in connection with the person region's conference, i would like to take a moment to focus on what went right. impt the system worked, the excesses of the conference were reported by my office. were reported to my office by a high-hanking political appointee and our investigation ensued. no one prevented us from conducting that investigation or obstructed what turned out to be a lengthy investigation. as each layer of evidence was peeled back, we discovered that there was more to look into and so our investigation continued. while some have suggested that the investigation took too long to produce the final report, anyone familiar with law enforcement investigations understands that when you turn over one stone, you often find more stones that need to be turned over, as well.

and most people understand the need to be careful and certain before making public allegations such as those contained in the report. because careers and reputations are on the line. and my office does not take that lightly. moreover, the gsa administrator ultimately had control over the date on which this report was released. because it was the administrator's response to the final report that triggered its public release. the system also worked in that people responsible for the conduct detailed in my report are being held accountable. it is my understanding that after the white house received the final report, the administration took swift action. a new acting administrator was appointed. senior officials were fired, and one resigned. finally, the system has been strengthened by the release of the report.

the public attention it received in the media and from both houses of congress and the strong commitment to our efforts demonstrated by the acting administrator dan tangherlini while not one of many career employees and political appointees who were involved in the western region's conference ever came forward and reported the waste and abuse that occurred, perhaps for fear of reprisal, gsa's honest, hard-working employees now have been empowered to bring issues to our attention and they are doing so. we have more work than ever. i look forward to answering all of your questions. thank you. >> thank you so much, mr. miller. mr. tangherlini. >> good morning, chairman boxer, ranking member inhofe, members of the committee. my name is tangherlini, the acting administrator of the u.s. general services administration. i appreciate the opportunity to come before the committee today.

first and foremost, i want to state that the waste and abuse outlined in the inspector general's report is an outrage and completely antithetical to the goals of the administration. the report details violations of travel rules, acquisition rules, and good conduct. just as importantly, those responsible violated rules of common sense, the spirit of public service, and the trust america's taxpayers have placed in us. i speak for the overwhelming majority of gsa saf when i say that we are shocked, appalled and deeply disappointed by these indefensible actions as you are. we've taken strong action against those officials who are responsible and will continue to do so where appropriate. i intend to uphold the highest ethical standards at this agency including referring any criminal activity to the appropriate law enforcement officials and taking any action that is necessary and appropriate if we find irregularities. i also immediately engage gsa's

inspector general as indicated in the joint letter that the inspector general brian miller and i sent to all staff, we expect an people who sees waste, fraud or an beautibuse to repor. we can't to build an partnership with the ig while insuring their flpd to ensure nothing like this will happen again. there will be no tolerance for employees who violate or disregard these rules. i believe this is critical not only because we owe it to the american taxpayers but also because we owe it to the many gsa employees who work hard, follow the rules, and deserve to be proud of the agency for which they work. we will have also taken steps to improve internal controls and oversight to ensure this never happens again. already, i have canceled all western regions conferences. i've also canceled 35 previously planned conferences saving nearly a million dollars in taxpayers expense. i've suspended the hats off stores and demanded reimbursement from mr. peck,

mr. robert shepherd and mr. neely for private inroom parties. i've canceled most travel through the end of the fiscal year agency wide and centralizing budget authority and vin already trawlized procurement oversight for regional offices to make them more directly accountable. i look forwarded to working in partnership with this committee to ensure there's full accountability for these activities so that we can beginton restore the trust of the american people. i hope that in so doing, gsa can refocus on its core mission saving taxpayers money by efficiently procuring supplies, services and real estate and effectively disposing of unneeded government property. we believe that there is seldom been a time of greater need for these services and the savings they bring to the government and the taxpayer. there is a powerful value proposition to a single agency dedicate odd this work, especially in these austere fiscal times. we need to insure we get back to the basics, conduct this work better than ever. at gsa, our commitment is our

service, our duty and our nation, not to conferences, awards or parties. the unacceptable inappropriate and possibly illegal activities at the western regions conference stand in direct contradiction to the express goals of this agency and the administration. and i'm committed to ensuring that we take whatever steps are necessary to hold responsible parties accountable and to make sure that this never happens again. we need to refocus this agency and get back to the basics, streamlining the administrative work of the federal government to save taxpayers money. i look forwarded to working with committee, moving forward and i welcome the opportunity to take any questions at this time. thank you. >> thank you both very much. as senator inhofe said, you are the good guys in all of this, and susan is a good gal. susan brita who came forward as a political appointee to blow the whistle and it resulted in the president's administrator

resigning as she should have and two people being fired. again, i say to miss brita thank you for your courage. this is not easy. i've done a lot of work on whistleblower protection and i know, you got to move the clock here, and i note how hard it is. and the scorn that is oftentimes heaped on those who have the currently to step forward. and you did it for your country. and we appreciate it at this committee. you know, as i researched this and i realized how many scandals there have been involving gsa, it really shakes you up. because when you look back in the president carter thought he cleaned up the mess way back in the '70s. and they put people in jail for bribery and fraud. and they put in whistleblower protection and all of that, so now you move forward, then you see two scandals under george bush and now this horrible scandal under president obama. so this is decades long.

so i guess the question i have for you, and i don't expect you to have a pinpointed answer, but what is it about the structure of the gsa that leads us to back to these scandals after this -- in other words, the expression sgs fool me once, you know, okay. but again and again? four scandals? three administrations, so is it, do you think, as i read your recommendations, i say the inspector general and i ask mr. tangherlini as well, is it the fact that there hasn't been a centralized check and balance so that you've got these regional offices gone wild here if they have the wrong leadership? and is that what we need to fix? how many regional offices, regions do we have in gsa, mr. miller, and are you enforcing a more of a centralized at this point checks and balance system right away for all of the regions or have you just gone after the western

region? >> madame chair, there are ten regions of gsa, plus the district of columbia. so essentially 11 regions. the western conveniently made up of seven, eight, nine, and ten. and it's an informal -- they informally call themselves the western region and they have this conference. there is no eastern region, northern region, southern region. they don't as far as i know have these conferences. as you identified -- >> i don't want to just dwell on the conferences because if there's people who are cheaters and people who were bad actors they're going to figure out another way to steal. >> right. >> forget the conferences. so my point is, you're telling me there's ten regions plus d.c. i understand there's 12,000 employees. is that correct? >> over 12,000. and i guess willy sutton was asked what, do you rob banks?

he said that's where the money is. part of the reason there's a lot of crime and fraud, waste and abuse at gsa is a lot of money flows through gsa. you know, it handles money on behalf of other agencies. it has millions of dollars flowing through it. and it has over 12,000 employees. in any town that you have in the united states of 12,000 or more, you always have a jail. so that you will always have people doing criminal things and dumb things and silly things. and it's no different, unfortunately, in the federal workforce, have you people doing criminal things and dumb things and that's why you need inspectors general to monitor for fraud, waste and abuse. >> i agree. what i'm trying to say is have you looked at this notion, have you looked at this notion of more centralization and checks

and balances. have you done that for every region or have you just now done this for the western areas because of this problem? i mean, obviously, a lot of us i think this is a systemic problem. so i'm asking you if these reforms are going to go forward. are you recommending to mr. tanker lee me that he have centralized most of the operation? >>. >> well, as you can tell from my supplemental statement, that is the direction we think gsa should go, but how gs app is managed is essentially an agency function and is at the discretion of the administrator. it's a little out of my lane. >> i'm going to ask. so given the recommendations of the inspector general that there be more chicago and balances and more centralization, what's your take on it at this point, mr. tangherlini. >> i already with only a couple of weeks of experience with the organization already have strong indication that we need to centralize certain functions. late last week is, i took steps

administrative steps to centralize the finance function so that our chief financial officer of the general services administration actually served in that will capacity straight out to the regions is, as well. from what i understood, the regions had some autonomous ability to once their budgets were allocated spend within those allocations. so one of our initial moves is to make sure that that chief financial officer actually has visibility straight down into the expenditures at the regional level. there's a lot of work we have to do to bid the systems necessary to have visibility into the regional expenditures. we've also taken steps to consolidate the procurement oversight function, as well. and what we think we can doing is continue to have some level autonomy so that there's innovation and that the regions can reflect the needs of the local area. but we need to have clear accountability. >> uh-huh. >> now, we're going to look at

the entire structure of the agency top to bottom. we're going to undertake a process we're already involved in that to look at the way the system is you can have toured so we can ask ourselves the kind of clean sheet of paper type questions how should it be structured. >> i want to say this and i'll hold for my next round but you know, senator inhofe alluded to this as did others. we're going to need to have more oversight. so how many months do you think it will take you before you're ready to put these new systems in place because we would like to have you back to give us a progress report. >> well, i think we've already started making changes. so that's part of what i'm here to report on today. we have the good fortune of having the budget process, the 2014 budget development process. we're entering into that now. so i think we're going to use our 2014 budget development process which col minnates to recommendations to omb in september and a budget in february.

we're going to use that process to start delving into this but that doesn't mean we're going to wait till the outcome of that process to make necessary changes. >> good. let me just say i will discuss this further with my ranking member whom i respect so much and i think around september, perhaps late september, we ought to have you come in to talk about this because we got to stay on this. you in one sense you're fortunate because you're coming in on the heels of this and everyone's going to give you the latitude. and you know, don't listen to those voices who say we can't change. senator inhofe. >> thank you, madame chairman. senator johanns has an ag commitment he needs to get to and i don't so i'd like to have you go ahead of me in line here. >> thank you very much. that's very kind of you. i appreciate the courtesy. plif miller, l plif -- mr. miller, let me start with you. i have to assume that will with everything that has happened that has transpired that you are

also looking at other areas within the gp subpoena app. as you have gone through you this in your thinking about what happened and going forward, what thoughts would you have, what recommendations would you have you in terms of how the gsa just better manages what's happening? because this is beyond normally what an inspector general would run into. i think everybody would agree on that. how do we stop this? how do we put the right structures in place to empower the leadership at gsa to make sure we're not back here again? >> thank you for the question. we have to deter others from committing criminal acts from committing fraud, waste and abuse. we had a region and a regional

commissioner that was doing all sorts of things that are documented in our report. and we produced to senate committees and house committees. but the ultimate deterrent is criminal prosecution. and we are doing all that we can to identify those committing fraud and crimes and referring them to the department of justice for prosecution. we are doing all that we can to hold them accountable for civil liability not just in terms of employee misconduct but people who do business with the gsa. oracle paid $199 million back recently because of the work of our auditors. and so we are doing our best to hold people accountability. en i know mr. tangherlini has some ideas about changes. you've heard my general

recommendation ta we need to have a strong system where people are held accountable. regional people need to be held accountable and people need to manage. you can't legislate good management and good judgment. but you can try and put into place some systems where people do manage. and i'll let mr. tangherlini speak more about that. >> go ahead, offer your thoughts. >> thank you very much, senator. i think the inspector general described it very well. i think we need to look at the way we've structured the organization, look at their reporting lines of authority, and ask ourselves, is this structure that will ensure clear accountability. again, autonomy allows for the opportunity for a certain amount of innovation. the point though is that that innovation has to happen within the constraints of accountability so we know what's taking place. we have a shared view of what's taking place, that there are

appropriate checks and balances so that nothing like this can happen again. >> let me ask both of you, mr. miller, something you said triggered this thought. is this based upon what you've seen so far, is this a regional issue, or is this a systemwide gsa issue that you're facing? or is this just simple mr. i a situation where the regional leadership was so lax, so whatever, that this just spun totally out of control? what's your thoughts on that? >> well, i'm a former prosecutor. i tend to see misconduct in a lot of places. i would say yes to all of the above. obviously, there is misconduct on the part of regional officials. but there was a national central office official, the commissioner of pbs that threw a party in his loft suite and

charged the taxpayers 1,000 -- over $1,9h00 for food. that's a senior office high ranking senior official. so i think that there is a problem throughout. but you know, as an ig, we do reports based on specifics. we've done a report specifically on the western region's conference. i'm reluctant to make generalizations but i do throw those particular facts out to you about the party and you can draw your own general conclusions. >> okay. >> i think the events in the western region conference speak for themselves, that clearly a leadership ip issue happening particular out out there in region nine at the time that the this conference was planned and certainly undertaken. i haven't been there long enough to really get a sense organizationally whether this is a broader cultural problem or

not. that's why we want to look top to bottom at the organization and ask ourselves the clean sheet of paper type questions. are we structured in such a way, have we built ourselves a culture in such a way that it encourages this kind of activity although i don't think there's any evidence beyond what we've seen in region nine and what happened with this particular leader in this is endemic but we're open to that possibility and work very closely with the ig. i think equally important, frankly, is making sure we build a system with him appropriate accountability, appropriate checks and balances, appropriate visibility into the actions that people will have opportunities to stop this kind of thing before it happens. >> i don't want to abuse my privilege here by extending this because i'm out of time. but i do want to just offer a thought. it would seem to me that an auditing process of some kind either wasn't working if it was in place or in the alternative,

if it's not in place, it needs to be. you would think just a regular auditing process would have picked out these issues and said whoa, wait a second. time-out here. you're heading off in a wrong direction. for whatever reason, that didn't seem to happen here, which i find very, very surprising. so maybe a fix going forward is to fix whatever is there that wasn't working or in the alternative, put in place an auditing process to catch these things. so thanks. >> do you want to go ahead? >> okay. mr. . . trying to put this into perspective, the event took place in october 2010. this interim report came in may 2011, i understand. and so then you had another 11

months. if you had been in the position of miss johnson at that time, the position you're acting in right now, what would you have -- what would you have done when that interim report came out? how would you have handled that? >> it's very hard to conceive of the response to such a hypothetical. however, it's also easy to use 20/20 hindsight. i think the -- i think going forward, the best thing to do is build the kind of relationship that i tried to start on day one with our inspector general. my first day off -- into the office, i came in, met with brian and his team. we subsequently had a one on one in which i sat with his entire leadership team and worked with them to try to understand what are the big challenges. i would like to build the kind of relationship where we have continued and direct communication and, as a result of that communication, we have swift and immediate action on the part of the administration.

>> it's my understanding that -- maybe you can clarify this, mr. miller. it was after the interim, that may of 2011, that mr. neely actually went on several trips after that report came out. i'm talking about two trips to hawaii, saigon, trip to guam, napa valley and several other places. is that correct? >> that is correct, unfortunately. >> that is -- all right. mr. tangherlini, the -- you talk about a total, i guess, of 11 regions, if you count washington. and this was seven, eight, nine -- or eight, nine, ten and 11, i guess. are you aware of in the other areas, any other ongoing investigations that you would feel comfortable talking about? do you know of any others that are taking place, other regions other than this? is this an isolated case for

right now? >> so let me just, if you don't mind, reiterate it's seven, eight, nine, ten. region 11 is the national capital region. >> i see. that's fine. >> but as far as ongoing investigations, i think it's actually better if the inspector general speaks to that. >> okay. that's fine. >> senator, yes, there are ongoing investigations. some involving other regions. >> okay. and were they stimulated because of this problem coming up? or were they already under investigation? >> some were stimulated because of this. i would have to check on exactly how many. as i said in my opening statement, the result of this -- the release of this report is that people are coming forward now. they are calling the hotline. and as a result of administrator tangherlini and my joint appearance before gsa, encouraging people to come

forward to my office, people are coming forward and reporting things. >> okay. i understand you had a letter that went to -- you, mr. tangherlini, that went to the oneely, shepherd and i guess peck was the other one, requesting return of funds that should not have been spent. is that correct? and are they complying with that? >> it was acting public buildings commissioner linda charo who sent the letter to those three individuals demanding return of funds associated with those events. we've also begun the process, using the inspector general's report to go down the list of other places where we believe the federal government and the federal taxpayers inappropriately paid for ineligible items. >> let me just conclude by kind of backing up the chairman in this case. because we've had so many circumstances where oversight

has been neglected. and perhaps we were in neglect for not doing more. wooem ki we'll kind of serve notices that there will be more oversight not just with gsa but other organizations within the jurisdiction of this huge committee. thank you, chairman. >> thank you very much. senator brasso? >> thank you, madame chairman. the issue continues to arise, should there be a termination, additional people suspended in response to the inspector general's report, the administrator has resigned. we talked about officials that have been fired. we get into senior executive service employees that can only be removed from civil service or suspended for more than 14 days, quote, only for misconduct, neglect of duty, malfeasance, failure, to accept a company reassignment or transfer. as an administrator looking at this, you mentioned taking strong action. have these procedures to remove an employee been set in motion to terminate jeff neely?

>> i think i want to try to avoid anything i would say that could impact the ability for us to see through the administrative actions against those accountable all the way to completion, because the personnel rules are rather strong, the privacy act also is implicated in discussing these items. i want you to know, though -- i would like the committee to know that we do have a team of folks from our human capital office, our deputy human capital person and from our legal office pursuing the full measure against all those responsible for planning this event and undertaking this event and leading this event. >> thank you. it's interesting. you look at some of the policies we have with regard to credit card and contracting policies and learn a number of gsa employees had their credit card privileges temporarily terminated, related specifically

to this conference back in 2009. and then just two weeks later, the privileges were reinstated. you scratch your head and say what exactly has happened here? and is that something you're going to look into as well? >> actually, i took action over this weekend to vest the authority in our senior procurement for removal and reinstatement. in the past, that was another delegated authority out to the regional areas where people could provide that warrant authority, remove the warrant authority. they could reprovide the warrant authority. all of that needs to go through our senior procurement office now and all of it needs to be justified. >> looking at this as a prosecutor, as you said you do, are the things that we should expect in the next few weeks or months that we're going to learn more, additional things or is this pretty well complete? are you continuing an on dgoing

investigation? >> senator, we are continuing ongoing investigations. and, you know, as i said in my opening statement, every time we turn over a proverbial stone, we find 50 more and we find things fr crawling out from under them. and, you know, i don't know what we're going to find. but it has not been pretty. >> just having gone through a number of -- the documents and the depositions, the invoices, looking through this. it does look like you question how certain vendors were chosen, when it would be a lot easier to choose others. p potential allegations of illegal relationships between vendors and those during the procuring. is that the sort of thing you're referring to? >> we're looking at all those things. yes, senator. >> there was a mention made of finding some individuals, making them reimburse for money spent already. it's interesting how you look through some of these hotel bills and even though someone may have stayed a little longer and paid the $93 bills mr. neely

did, the cost of the room that night -- kind of a high roller suite, would have been over $1,000. we'll just add that additional money to the overall invoice for the overall convention. that's come out in deposition. >> taxpayers paid for that. >> because that's an extra thousand $1,050 for additional time. >> yeah. >> you look at this and it makes you wonder, because chairman boxer mentioned both under republicans and democrats there has been abuse through the gsa over a number of decades. would it not be fair to ask has gsa outlived its usefulness? is this something that should be done in a private sector rather than a government sector since there were so many challenges here for the gsa? >> if you want these activities to happen, if you want fleet management, building management -- in fact, most of the work we do is actually provided to the private sector.

and what we simply do is act as an intermediary. the appropriate sets of checks and balances, appropriate sets of oversight systems, clear lines of accountability to make sure that this kind of thing can't happen again. that having been said, having a single accountable agency that can aggregate the expenses of the government and use the scale of the government to get the best possible price for the government, i think that has value today as much as it did back when the hoover administration first proposed it and president truman set up the gsa. >> the goal to provide superior value to the american taxpayer. we have fallen so far away from that that the taxpayers of this country are just appalled. thank you. thank you, madame chairman. >> thank you, madame chair. mr. miller, the -- what were some of the red flags that were overlooked in regard to this?

this stuff is pretty blatant. what was there that people didn't pick up that they should have picked up? >> almost everything, senator. when you have a select number of individuals invited to a party where food is paid for by the taxpayer, somebody somewhere should have -- some red flag should have popped up and said, oops. this isn't right. that didn't happen. and we have some of our highest ranking officials attend these networking parties. and private receptions in these rooms. >> and so was that -- i mean, was that budgeted? were there receipts? were they falsified or -- >> we went through all the receipts. it was billed to the federal government. it took a long time to find because some of the bills are on purchase cards, credit cards. some of the bills are in budget for the conference. some of the bills came out of the operating fund for the

public buildings. they were all over the place. >> so who -- >> forensic agents and auditors for finding these. >> within the agency, who is responsible for saying, you know, there's something amiss here? >> dan, do you want to take that? >> i think, actually shall that's part of the problem. and that was part of our concern, was that we didn't have a strong centralized management organization that could see these things beginning to start coming through the system and start raising questions. it was all held within the region. and that region was being led by this individual, who is the main leader of this activity. so, that we identify very quickly as an issue, coming out of the inspector general's report, taken immediate action to begin to change that structure. but we think that that's just the beginning and why we need to

take a good look, top to bottom, the way we structure organize and operate this agency. >> somebody was approving the travel vouchers for those people traveling to this conference. so there's responsibility all throughout gsa. >> i guess -- i don't mean to interrupt, but as you've unturned these stones, are you find i finding is this more an individual thing or is this the culture of gsa? >> we're finding a lot of things. >> cultural thing or has this been going on so long that it's just business as usual or -- >> as an inspector general, i am reluctant to make generalizations without having facts to support them. i will say that when we uncover things, we disclose them. i gave the administrator an interim report because we had investigations and it got so bad

that we thought we have to tell the administrator so they can stop this abuse. normally we don't do that when we're investigating. we put together this interim report. i briefed the administrator in may of 2011 about the abuse. we had a problem with the emp y employee rewards store, we gave her a draft of that, too. we gave the managers information so that they could stop this. i don't know what actions were taken. i'll let the administrator talk about that. we were trying to get people to stop this. in august, there was a new regional administrator sworn in, in region nine. i personally met with her, went through the interim report with her and asked her to get a handle on the regional commissioner's travel. i even suggested perhaps she could have her cfo take a look

at past trips and then we're faced with a three-week trip of the regional commissioner to sa sa saipan. we were like, what's going on? do you know he's about to take another trip? she contacted the regional administrator and the result was he went on the trip. >> so, that is kind of cultural? >> i'll let you draw the generalization. >> exactly. the gsa, obviously, is a very troubled agency. >> can you -- are there -- what is the -- do you know perhaps what some of the better agencies, you know -- our leadership has been here a while, mentioned we have these recur i recurring things going on at gsa. what are some of the agencies, what can we use as a model within government to try to model this after so that we don't have this in the future? some of the agencies seem to

function without these problems. is there one that comes to your -- >> well, i would say i just want to -- if you don't mind -- add quickly to the ig's, mr. miller's comments about culture. at the same time i've received dozens and dozens of e-mails from gsa employees who are as outraged and horrified and disappointed and disgusted and, frankly, even somewhat more because they have associated their public service careers with this organization. and they're now embarrassed about being gsa employees. and they are committed. the e-mails i get from people, they are committed to redoubling their efforts to do what the gsa is set up to do, which is to save taxpayers money, which makes these events even more unconci unconscionable.

accountability systems, performance accountability systems that we really need to look at other agencies, how they set things up so that they have a continual quarterly accountability review of the actual performance and expenditures of their component parts. and i think there are a lot of lessons we can learn from them. >> thank you. thank you, madame chair. >> thank you. i want to thank all my colleagues. i think every one of these questions is important. so it's really good to see both of you working together. i mean, i can't tell you how much it means to us, because without that, we're not going to get anything done. and i think the last administrator should have listened to you a lot more when she saw the draft report. >> thank you. >> and i think that was a huge mistake. and if it wasn't for miss britta, i don't know, we might not even be here. so i think what's really important is for the public to

understand, as you said mr. miller in your opening, what went wrong and what went right. but now we have no excuses going forward not to fix this nightmare. and, you know, i have to say it starts with the two of you working together. it really does. that doesn't mean you're going to agree on every sing le thing. no two people agree on every single thing. but the motivation of cleaning house is key. and putting in those checks and balances so that, look, we can never stop every bad thing from happening, but we know we can stop most. and it starts with accountability for those who committed these, i would say, possible criminal acts. i believe it's very possible. and i know that you're looking at more. and so i think this is so damaging that mr. tanger eventai

want you to be more sweeping in your reforms, possibly, than people will be comfortable with. you have to. you have no other option. you can do something here that will last for generations if you do it right. i think senator boseman's question was good. is there another agency? there's really not another agency that has quite the same function. this is a different type of a function. most of our agencies really deal with performing a particular service. you have to deal with so many outside, inside people. ta's different. but we have to protect against bad people because there are always going to be bad people. so, you know, the last administrator before this one, the administrator under george bush compared you, mr. miller, your tactics, to terrorism. i assume that was not a good

working relationship. right. so, she's gone. now we have this camaraderie not based on personalities or power, but doing the right thing. so i would like to have a couple of thoughts and ask you to respond. a lot of us who have led organizations, whether they be small or large, know that the tone set at the top is critical. there's a very kind of a course expressi -- coarse expression, which i will say at my own risk, which is the fish thinks from the head. it makes sense. if the person at the top is not good, it filters down, the ugliness. and we've got a good person at the top. we have a great inspector general, who has proved himself

through various and sundry administrations. so, are you considering, mr. tangherlini, or have you done this, personal town halls with the gsa employees? it's my understanding that the good people there -- and you point to them -- are being forgotten. and that is the saddest, saddest, saddest thing. because my understanding -- and you can confirm this if i'm not correct -- that these current gsa employees following obama's directives, have saved more than $1 billion. >> they've helped us save $1 million by following -- >> i don't mean this. i mean by putting in energy efficiency. >> oh, right. yeah. >> and putting in better computing and printing. >> absolutely. the value proposition goes well beyond that when you start looking at what we do in terms of competing travel in terms of

strategic sources. >> let's be clear here for the taxpayer taxpayers to know. because of the president's directive to become efficient and save money, we have saved, is it fair to say, more than $1 billion for taxpayers? >> i think it's fair to say. >> okay. so, let's not lose that because that gets lost. how many people sitting here today work for gsa. could you raise your hand? i know what a painful thing this is. you know, every time there's a scandal in the senate, it hurts everybody. and we have them. it's ugly. and i know what you're going through. but i think what we can't lose sight of it the good people there. and in order to make sure they are supported. are you considering having these types of meetings, whether it's large ones, out in the region? what are your plans to preserve

that type of leadership? >> already on my second and third day at gsa, i went through the public building service, the local public building service. i went down to our region 11 office here in washington. i went to our fas and i went floor to floor and addressed gsa employees. i've already been on what we call chatter, which is our internal social networking dialogue opportunity to take questions from gsa employees. in my letter to gsa employees on the first day, i asked them to reach out to me. they have not been shy. they've been reaching out to me. and in our joint letter, we asked employees to reach out to both of us, if they have an issue. >> i think what's important, and this is my opinion, is for you and your trusted people at the top to meet with groups of people, large groups of people and just let them know that we're going to deal with this matter.

we're going to straight en this out. we're going to be known as the gsa team that cleaned up a mess that has happened over four decades and keeps on happening and we're going to clean it up. and it also seems to me -- you talk about innovation. innovation needs to be from the grass roots up. but if it has a cost to it, it needs to go to the central place here, because that's what you need. you need cost controls right now. on everything. i think you should overdo it. there's always a way to say i think we've overdone it. these guys did preconvention trips to try out the resort with their friends. that's disgusting and it has to stop. so, any travel budget, it seems to me, needs to be looked at by

your trusted people. every travel budget. and all the expenses. all of that has to be instituted, i think, to regain control over this runaway -- these runaway regions. i say regions, plural. i may be wrong. i don't mean to impugn anybody else. but your leadership in terms of reaching out to the good people is just as important as your leadership in punishing the bad people. it's a big job. and you have trusted people. so, i want to help you. i know senator inhofe does. i know members of the committee wants to help. it will work out to our benefit. if we can help you straighten this out, because this is -- we're the biggest landlord. we have a lot of property.

and we can really make it work for the taxpayers if we do it right. if we do it wrong, it will be no good. you have my full support here. come september, we'll take another look see on how everything is going. i'm going to turn it over now to s senator brasso. oh, senator carver, i'm so sorry. you were gone and now you're back. >> i'm happy to yield. >> no, go ahead. he'll take his final. >> all right. thank you for joining us today. i spent a lot of years in the navy. we were trained from an early age that leadership by example is one of the best forms of leadership. people may not believe what we say but believe what we do. none of us are perfect. we all make mistakes. richard nixon used to say people who don't make mistakes are people that don't do anything. my father used to say just use some common sense. i think what happened here is common sense was not used.

and leadership by example certainly was not pursued. it's a reminder for all of us that we need to use common sense and remember that people are watching us and that brings with it special responsibility. i have a couple of questions i want to ask. mr. miller. the irony of it is that we're focused on less than a billion dollars and there's a much larger amount with gsa every year, property that's owned by the federal government and in some cases we don't need. we spend a lot of money for utilities and so forth. the administration is focused on this. your agency has been part of this. we need to be part of the solution. i think we'll be moving

legislation later this year. i'm focused on speexpenditure o $800,000, but also the wide r expenditure of billions of billions of dollars, which is part of your responsibilities. mr. miller, it appears this was designed to uncover such wrongdoing, it actually worked as it was intended. according to your report, you were informed of potential employee misconduct with respect to the conference, i think by a gsa deputy administrator. is that right? >> that's correct. susan britta, who is sitting behind us. >> will you raise your hand, susan? okay, thank you. and that prompted you to launch yo your investigation? >> yes, sir. >> and once you launched your investigation, how quickly did gsa leadership respond? >> i think former administrator m martha johnson is the one to answer that question.

i went through the interim report of may 2011 with administrator johnson and her senior staff. i also, in august of 2011 -- >> can you just back up? start the time line for me. when did -- >> the timeline is the deputy administrator contacted our office around december of 2010. the actual conference is october 2010. somewhere around december of 2010, the deputy administrator came to our office. we began the investigation immediately. and in may 2011, we were finding such outrageous conduct that we took the unusual step of preparing an interim report. we don't usually do that with investigations. but we prepared an interim power point to share with the administrator. we gave that to her. and her staff.

>> that was may -- >> may 3rd, 2011. may 17, 2011, i met with her personally, went through the power point. we also had a separate -- >> what was her reaction, do you recall? >> she appeared to be disgusted by the power point. but we went through it. we also went through another draft i had that's called a hats off program, employee reward program. i won't bore you with the details. i went through that with her as well. in june of 2011, the hats off report became final. and that indicated wrong doing on the part of various gsa employees, especially the regional commissioner. then in august 2011, i personally met with the newly appointed regional administrator for region nine. >> and that would be the

administrator who had been removed, stepped down? >> well, there was a vacant regional administrator for region nine and that was vacant for a long time. and the regional commissioner, jeff neely, was acting regional administrator at the same time. >> i see. >> which may be part of the problem. but administrator johnson appointed someone to take charge as regional administrator. i personally briefed regional administrator in august of 2011 and suggested that she get a handle, get control of the regional commissioner's travel and that perhaps she could employ the -- her financial officer to help do some historical work as well, to let her know what the true story was. and so that's the timeline. we came out with a final report, and i delivered it to administrator johnson on

february 17. the way our system works, we'll do essentially what's a final report. we give it to the agency to make comments. so, they tell us whether we got the facts wrong or there's something wrong or they say, no, it's exactly right. either way, we publish their response and the whole thing is published. so, i give her what's technically called the draft final report february 17. and i gave her 30 days to prepare a response that we would publish with the report. she asked for an additional 30 days, but it was clear all along that we would publish whenever we received her response. ultimately, we received her response on april 2nd and that's when we published the final report. >> all right. thank you. are you satisfied that the correct measures have been taken? just be very brief. are you satisfied with the corrective measures that have been taken?

>> i think more needs to be done, senator. >> and give us some idea what that might be. >> well, i think there are a lot of challenges. perhaps the acting administrator wants to address those. >> i agree with the inspector general, more needs to be done. >> give me an idea of what that might be. >> we mentioned some around the stronger oversight in accountability of the regions, better and stronger financial management systems that reach into the regions. >> the issue -- madame chair, did you all get into the question -- and i'll just ask this of you really. the fact that there was not a regional administrator for apparently a significant period of time? yeah. are there other regions -- do we have extended periods of time

where there is no one in charge for extended periods? and what is the administration doing about that? >> some of that has to do with the changeover and time to appoint these positions but some of it had to do with the fact that the accountability of the regional commissioners had been transferred away from those regiona administrators and sent directly to the commissioner of the public building service. we learned yesterday in one of the hearings that there's almost some confusion about the organizational structure of gsa and we need to make that very clear and very obvious so we can have the kind of accountability we need. >> all right. thank you much. >> it was an important question. thank you for pursuing it. senator brasso? >> just to follow up on senator carver's point and about getting -- bringing back the accountability. the question to the inspector general, do you have the resources that you need? you said there's more that needs

to be found. do you have all the resources you need to bring back the accountability that taxpayers demand and deserve? >> we have 70 special agents. special agents do the interviewing. they have law enforcement authority. we have a number of auditors. we have a total of about 300. we have a number of viek ananca vacancies. because of appropriations we're not filling thosevacancies, but we're doing everything we can. >> thank you. >> thank you, madame chair. good to be with you today. and really appreciate you doing this hearing. i think it's tremendously important to focus on the issues that the gsa does -- it does

focus on. i'm going to talk a little bit about new mexico here. at the house hearings in our hearing today, many listed the outrages in this waste over the top conference. i'm not going to spend a lot of time on that. mind reader, sushi, luxury suites. when you're wasting taxpayer money, what happens in vegas does not stay in vegas. so, let's take a little bit more of a look here at this conference in terms of the big picture. and what's -- my first question will focus on all of these things you've done in the past. first to hit on new mexico. from a new mexico perspective, this conference scandal is also worrisome for two reasons. first i'm disappointed that this conference involved the western regions of gsa, of which new mexico is a part, which is in

the southwestern region, region seven. secondly, the scandal is distracting from the urgent gsa pending project in new mexico, the columbus land port of entry. columbus, new mexico, is a border town, across from palomas, mexico. gsa had a $60 million new land port of entry facility in its 2012 budget. in december, this committee approved a resolution, authorizing construction. this facility is extremely important to security, u.s./mexico trade and economic development in southwest new mexico. i was in columbus last week and heard about the importance of this project. we need to root out the waste and abuse at gsa and get back to the work that taxpayers want us to do, like economic development and border security. so, mr. miller, you've talked a lot about the reports your office did regarding this wasteful conference in 2010. i would like to hear some more

about your other works on wasteful spending so that we can put this current controversy into context and into perspective. here are a number of figures from your most recent semi annual report. and i hope you can tell us, really, what they mean. first of all, 460 million in questioned funds are recommended for better use. 376 million in criminal, civil and administrative recoveries, 260 new investigations, 71 cases accepted for prosecution. 85 indictments and 64 successful prosecutions. 88 contractors suspended and 61 contractors disbarred. now, there are similar figures in all the semi annual reports going back to president bush. could you put this into perspective? we have this conference that's obviously a real waste of

taxpay taxpayers' funds. some of the other things you're doing here, i think, are very important. and the dollar amounts are huge. could you put that in perspective? >> thank you, senator, for noticing. our office does a lot of great work. we have great auditors, great special agents, forensic audit ors. they do tremendous work. i'll start backwards. i made it a priority when i became inspector general in 2005 to make referrals for suspension in department. we have referred over 1,000 individuals and companies for disbarment so far. we've indicted a number of individuals and companies. this year alone, we indicted a group of individuals who were producing counterfeit integrated circuits, claiming that they were cisco integrated circuits and then upgraded integrated circuits. they broke the code that cisco had to upgrade them and they

would upgrade sometimes real ci cisco integrated circuits with counterfeit parts and sell them for a profit to the government and others. we convicted those individuals. they were convicted in the eastern district of virginia by the u.s. attorney's office there. we also investigated, which led to the conviction of 11 individuals involved, property managers managing properties in the d.c. area, including a manager of, i guess, white house facilities and they were taking bribes. for example, they would have an arrangement with a contractor to replace an exhaust fan and they would use their purchase card to charge $2,000 or $1,000 for replacement of a fan. in reality, the fan cost $80. so, the contractor then would kickback part of that money to the contracting -- the property manager. so, 11 property managers and contractors were convicted

earlier this year, august 2011. >> mr. miller, in terms of perspective, is the waste, fraud and abuse at gsa improving or getting worse overall? you've had a real perspective here, looking at this big picture issue. >> well, we continue to look at the larger systems, too. because we do audits of programs of gsa. and gsa -- we do audit programs regularly at gsa. having conferences is not a program of gsa. so it's not one of the regular things we audit. we will start now. but we audit their systems and we look at their work yearly. and we find more and more fraud, waste and abuse. i don't know that we've sat back and compared how much fraud there is year by year. fraud by its very nature is hidden. and i'm happy that thanks to the

hard work of our special agents, auditors, forensic auditors and lawyers, we're uncovering more and more fraud. >> well, the last two gsa administrators have had to resign. is there something about gsa? could you tell us why we're seeing that many scandals at gsa? what can you enlighten us on there? >> gsa handles a lot of money, millions, maybe billions of dollars flow through gsa. it handles a lot of money. handles a lot of property. there are a lot of contracts that it controls. there's a lot of temptation. and with over 12,000 employees, you're going to find criminal conduct, stupid conduct and just plain negligence. so it's a large operation with a lot of employees. and so you do have criminal activity. >> madame chair, i see i'm out of time. i have one more question if i

could have your indulgence here. i would like to ask the acting administrator, is this scandal going to distract gsa from doing its job, such as constructing essential federal facilities like the columbus, new mexico, border crossing land port of entry? >> well, we hope it won't, because that would add, you know -- that would add a very bad outcome to an already unacceptable situation. we need to make sure the gsa, the 13,000, nearly 13,000 gsa employees stay focused on their core mission and save taxpayers money. if they're diverted from that, we're only compounding the mi mistakes that were made at this conference. >> thank you. madame chair, i know you're a real watchdog over the treasury. i appreciate you holding this hearing and making sure that we don't see these kinds of wasteful expenditures of taxpayer money. >> thank you, senator, for joining us. i think we've had a good -- a

very important hearing. you know, we're not looking for photo-opes of people taking the fifth. we're now trying to move forward and make sure this doesn't happen again. now, the inspector general, in answer to senator ludell's question said something alarming. he's uncovering more and more fraud. it seems like it's a never-ending thing. mr. tangherlini, you're sitting next to a man who is saying he is uncovering more and more fraud. i'm encouraging you to do far more than even you thought you had to do, because you need to. because we are not going to change this. so i'm encouraging you here and supporting you in that effort. and as i think of ways, if i was in your seat -- again, i would communicate with every single employee. have you done any type of an e-mail or any type of a letter or any type of a little chat?

you said you chatted. >> yes. >> have you made a statement that all gsa employees, from the top to the bottom can hear you talk about, a, how much you respect the work they do and, b, how we have zero tolerance for fraud in any way? >> we need to continue to do that. but on my first day, i sent a letter to all gsa employees. i followed it up later in the week with a joint letter with the inspector general. and i've also done a video for all general services employees. >> good. >> we started the social media, the chatter conversations. there's going to be more of that. i like your idea of maybe using something like telepresents to get out to the regions. >> very important. >> and to talk to folks. >> you know what's going on right now around the water cooler. >> right. >> not a lot of work. and i think people have to know, we have a job to do. it is our job to prove to

america that this agency is filled with patriotic, loyal americans who want to do the right thing. and that is critical. what is so outrageous about this is how these bad actors, very bad actors, perhaps criminal actors, you know, have sullied the reputation of so many people. it really is so disturbing. and they try to also sully the reputation of our president, these people in some of the things that they did. so i think a reach-out here is critical. i also think -- you have 11 offices, is that right? 10 plus d.c., right? >> yes. >> so that's only -- so i would, if i were you, i would find 11 of the best people i could find. seriously. the top-notch people, whether they're in the agency -- and,

you know, you have good people there. find these people. i would, at this point, send them out to each of these offices and i think they ought to be special oversight officers. they're to make sure people get back to work, do their job and before all these papers go off to the central place, which i think is important, that there's somebody there who can liaison with you. so you don't have a situation where you've got the same people sending you the papers and you don't have that much confidence. i think that ought to be something that you consider. now, it may not be necessary to do it at every one of these offices, but i'll tell you right now, what i heard about from the one in my state, it ought to be done. >> i already, in region seven, eight, nine and ten, in the public buildings commission, we're sending out new acting public buildings commissioners.

>> good. >> i also took way from here that we need to very quickly focus on the role of the regional administrator and the clear accountability that those folks need to show over those regions. >> and sending someone out there to oversee it, whether that is a six-month assignment plucked from the best of your best is up to you. when i hear the inspector general, who i admire so much, who had to take so much verbal abuse in the past and has stuck with it -- when i hear him say he's looking, he's turning over rocks and every time he turns over a rock, something crawls out. that does not give me heart. i do not feel good. i'm so happy that you're both there, but i'm worried about what's to come. and i think, you know, you're there now. and you have nothing to do with it, but from this point forward, you do. so, don't underestimate this job that you have in terms of

shaking this tree. and let these bad apples fall. and have your best people in these regions. we become washington central sometimes in federal government. we really do. and one of the things i learned being in my job for a long time, thanks to the good people of my state, is that in the beginning there was always tension between my regional offices at home and my main office. my main office thought they were the best, the best, the best. and everybody was doing things out there wasn't so important. baloney. you know, the people on the ground are the ones who were meeting my constituents, the ones who were bringing the issues to me, the ones who were the face of my office. so we had a lot of heart-felt meetings and now we're a seamless team. but it takes a lot of time. but i think that these regions have gone wild. this region went wild on you. they went rogue.

and it can't happen. and it's still -- there's ugly things that are going to come out. let's face it. because we know that mr. miller isn't going to stop until he knows everything single thing. so i have -- so, will you consider this idea of -- i'm not just talking about a person of public buildings or -- i'm talking about an overall good person, to get in there and say to the region, we need to change and this is how it has to be. this is what our leader in washington said we're going to do. and we're going to do this for him. we're going to do this for the country. so, would you consider that type of approach? >> absolutely, senator. >> good. excellent. because i think it would really help. because the big word here is accountability and checks and balances. and you know the expression, it's a government indemnity they use used to say back in the founding days, we're a government of laws, not men. today we would say we're a

government of laws, not people. but we are a government of laws and people. as the inspector general said, we have the laws on the books. we have the rules on the books and these people skirted them, disobeyed them and it will happen till the end of time. but we've got to get to the bottom of this. and i think it is going to take your most trusted -- people with the most integrity to get out to these areas and make them understand, they don't just do anything that comes along. they have to carry out a very important mission and do it with the highest integrity. i have one more sort of sticky wicket, which is not a hard question for the inspector general at all. but has anyone, in any way ever tried to stop you from this investigation in the senate? >> no. >> or in the house? >> no. >> has anyone called you and said go easy on this?

>> no. >> has anyone called you, mr. tangherlini, senator or house member, and said go easy on this? >> uh, no. >> well, i want that clear. because we've got a chairman over in the house, who is saying that one of the senators is trying to stop this investigation. and that's an outrage. so i'm going to read in our close what the inspector general said. there's a glimmer of good news. the oversight system worked. my office aggressively investigated, audited, interv w interviewed and issued a report. no one stopped us from writing a report and making it public. and the whole ugly event is now laid bare for all to see. sunlight is said to be the best of disin fefectant. how true. so let it be clear, there is no senator or member of congress

that is doing anything other than trying to get to the bottom of this. the two of you and, i have to say, miss britta, you're the good guys, the heroes in this. we should never forget that. we stand with you, and we will be with you every inch of the way. and don't let anyone stop you from doing the right thing here. because the days are over of these parties. they're over. the days of being unaccountable at gsa are over. and we've got to make sure they're over long after we're -- none of us is sitting in any rooms. because that's what the carter administration thought. they put people to jail. there was fraud. they protected whistleblowers and we got back again and again and again. so let's make it, this time, set into place a system that is going to stop all these bad things that have happened and more. and i think you do it with the best people and you do it with

the kind of an organization that builds in the checks and balances. so if you have a bad actor, that bad actor is found out. there's a layer of support. one of the things about the defense at the airports -- and we all get -- we're all critical and we don't think they work and sometimes they're abused and so on, is a layered system of defense. it's a layered system. you know, you buy the ticket. you're checked out. you go through, you're checked out. you go to the desk, you're checked out. your baggage is checked. everything is checked. if you have multiple checks, then you're doing your best. does it mean it's perfect? does it mean it's foolproof? no. because we're humans. but i think you can do it. if ever i saw two people -- three, if i might add -- who have the integrity and who have the will, it's the three of you. and the others here, who i don't know, who i believe want to help you do it. so, let's show the world, let's show our taxpayers that we're

going to fix this and although this is a horrible situation and we could see more parade of horribles, we're going to change it and