remarks, any message? all right. thank you very much for joining. thank you. >> we're live this morning on capitol hill. brian miller, the gsa inspector general who brought the general services administration's las vegas convention and other extravagant spending to light and the new acting gsa administrator dan tangherlini will testify this morning. the gsa which manages property and purchases goods and services for other government agencies held a conference in las vegas in october of 2010 that featured a mind reader, a clown, and a $75,000 bicycle building and training exercise. >> the meeting will come to order. meeting will come to order. thank you to the press. first before i start my statement, before i start, i

want to the enter in the record a letter that i received from majority leader harry reid that makes clear that well run and cost effective conferences are productive and provide an important economic boost to our communities. i ask unanimous consent to enter his let near the record. do you have a similar letter from senator heller? >> yes, i do, i want his statement to be put in the record. >> absolutely. >> i'm going to ask that we each have seven minutes for our opening statement. the latest misconduct at the gsa makes me cringe. cringe for the taxpayers who expect every agency in their government to fulfill their mission with integrity and it makes me cringe for the good people at gsa who work so hard every day and have been humiliated by a few bad actors. to those who is betrayed the public trust, let me be clear. the party's over. it's over because of gsa inspector general brian miller. who was a bipartisan appointee

of president george w. bush and president barack obama. and the party's over because of gsa deputy administrator susan brita, an obama appointee who blew the whistle and took this matter to the inspector general. and the party is over because the new acting administrative gsa, mr. daniel tangherlini is a no nonsense leader from the u.s. department of the treasury who aims to clean up this mess. this is not the first episode of misconduct at the gsa. the carter administration uncovered one in 197 and 1979 when a nationwide investigation noose long-standing corruption resulted in prosecutions for bribery, for fraud, and protections for whistleblowers in the agency. then there was more misconduct during the bush administration. the first occurred when the chief of staff to the gsa administrator traveled with jack abramoff to scotland even though

mr. abramoff had business before the gsa. in 2011, this chief of staff went to prison. in 2006, the bush appointed gsa administrator steered a contract to a friend and. 2007, she organized a political call with 30 appointees to "help her friends win their elections." that violated the hatch act. the administrator repeatedly clashed with the inspector general, this inspector general in one report comparing his enforcement efforts to "terrorism." she resigned in 2008. and now here we go again in 2012. this time, involving what clearly looks like waste, fraud, abuse and possible criminal violations. the most recent example of misconduct involves a few individuals who saw the personal gain and exhibited scorn toward the public and exhibited scorn toward our president. there must be justice and restitution for this, and those who are responsible for in

outrageous conduct and who violated the public trust must be held accountable. gsa administrator resigned and she should have. two of her aides were fired and they should have been. others are on administrative leave waiting further action. the acting administrator and the ig at gsa we are very pleased to have before us today are working closely together to ensure that anyone with more information comes forward, they have set up a hot line for that and they have sent out the word. checks and balances on the regional offices have got to be put in place and many have already. many conferences 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.