so it -- or to replace it. mr. denham and i had a discussion last night. maybe it's time to look at a total replacement. how many of you out there, how many of you out there, if you have property, would turn it over to the federal government to manage for you? i ask you that question. not very many of you. and if you see the wasteful overhead and cost and what takes place when you're on the taxpayer's dime, it's even more offensive. with that again, i thank ms. norton for her cooperation, mr. denham for his leadership, and other members for being with us today. >> in deference to the administration's request, we will swear in those that have been fired, put on administrative leave, or resigned together. at this time i'd like to request mrs. johnson, mr. peck, mr. foley, and miss daniels to please rise. stand and raise your right hand to be sworn in under oath.

do you swear that the testimony you're about to provide to the committee is the truth, the who'll truth, and nothing but the truth, so help you god? we will have two panels today. the first panel includes -- i invite you back to the table. the honorable brian miller, gsa inspector general -- >> mr. denham, chairman denham, i'd just like to insert at this point in the record this comment and note for the record that mr. neeley has -- is not with us today. we had requested that he be with us. and he has taken i guess the fifth in another committee and is not appearing today against one of the requests that at least i made for him to be with us. i guess the only way we'll sigh him is on a video for the hot

tub. but i want to make certain that it's noted in the record that he did not appear. >> mr. miller, deputy administrator, miss allison doone, gsa chief financial officer. mr. robert peck, former buildings -- former public buildings services commissioner. mr. neeley, as chairman mica already said, mr. neeley through his attorney refused to appear this morning. and miss lisa daniels, the event planner for public building service. if you'd join us at the table up front. i ask unanimous consent that our witnesses' full statement be included in the record without objection. so ordered. since your written testimony has been made part of the record,

the subcommittee would request that you limit your oral testimony to five minutes. and as far as this committee today, we will be going by the strict five-minute rule. we have a lot of questions. this is going to be a very long hearing. we want to make sure we have as many opportunities to go through members' requests as possible. mr. miller, you may proceed. >> good morning, chairman denham. chairman mica. ranking member norton. thank you for inviting me here this morning. to testify about our report. i think everyone is familiar with the facts of our report. okay. and so i would simply ask that my written statement and the report itself be included in the record. i would be happy to answer any questions. thank you. >> good morning, chairman mica.

chairman denham. ranking member norton. thank you for inviting me to testify here this morning. >> can you pull the microphone up as well? >> can you hear me? no? how about this? better? it's hard being on this side of the dais. as you all know, i spent 18 years on this committee working with all of you in a bipartisan manner to conduct oversight on a variety of general government management issues, but with an emphasis on the operations of the general services administration. on february 2nd, 2010 -- 2011 i had the honor of being appointed by president obama to the position of deputy administrator at the general services administration. during my 18 years with this committee there were many serious issues that this committee addressed but none rises to the level of the wasteful spending and lack of management associated with the western regions conference. as deputy administrator, as a civil servant, and as a taxpayer i share your anger and disappointment in gsa's conduct.

when i first became aware of the excessive spending related to the western regions conference, i requested that the gsa's office of inspector general conduct a review of these allegations. i'm grate tofl mr. miller and his office for the work they did in uncovering and reporting these abuses. i believe the inspector general's report warranted immediate corrective action within gsa, and i advocated for such action. i'm committed to working with acting administrator mr. tangherlini to restore faith in the agency. not only to members of this committee but also to colleagues in other government agencies and more importantly to the american taxpayer. i look forward to answering any questions you may have. >> good morning, chairman denham, chairman mica, ranking member norton, and members of the subcommittee. my name is alison doone, and i am the chief financial officer of the general services administration. i appreciate the opportunity to come before the committee today. i have served as the gsa cfo

since december 27th, 2010. before arriving at gsa i served at the internal revenue service for five years as the cfo and deputy cfo, where i oversaw the financial management and accounting operations for a $12 billion budget and $2.3 trillion in tax revenue. i also have a held executive positions as deputy staff director and cfo of the federal election commission and deputy assistant administrator at the office of finance at the drug enforcement administration. until the acting administrator's recent action to centralize oversight of financial management, gsa financial management operations were decentralized and were managed by autonomous regional cfos with no oversight or control by my office. the budget and all costs for the western regions conference were approved by employees in the pacific rim region, including those in the regional budget and financial management division commonly referred to as the region's cfo. and not by anyone in the gsa

office of the cfo. this decentralized organizational structure of gsa financial operations increased the risk of these types of abuses at the regional conference and in the hats off program. in my experience at irs and other federal agencies the agency cfo had far more oversight and control. to correct these issues the acting administrator has already taken strong action by realigning all public building service regional budget and financial management operations under the direct authority of gsa's cfo. in addition to the strengthening of the internal control environment, the acting administrator is reviewing employee relocations, will require all future relocations to be approved by both the chief people's officer, and the cfo, and has closed the pacific rim region hats off store as well as all similar programs. in addition to the actions taken by the acting administrator, i added two controls to cfo processes. first cfo is now performing an

additional review of selected invoices before payment to verify appropriateness of the expenditures. the second control is the addition of a monthly review of obligated amounts compared to budgeted amounts to ensure expenditures are within budget. these additional controls together with centralization of budget and financial management operations will greatly improve our ability to prevent the abuses described in the i.g. report. i welcome the opportunity to answer questions. thank you. >> good morning, chairman denham, chairman mica, ranking member norton, and members of the submit. my name is robert a. peck. until earlier this month i served as the national commissioner of the public building service of the gsa. having served in that role previously from 1995 to 2001. i am deeply troubled and disappointed by what i have learned about the costs associated with the gsa's western regions conference held in october of 2010. there were excessive and

inappropriate costs that have never been incurred. those planning it made fundamental errors of judgment. it is also troubling that procurement policies, travel policies, and other agency procedures appear not to have been followed. while i was not personally involved in planning, conducting, or approving the conference and the unacceptable conference expenditures described in the i.g. report, they took place within the pbs on my watch. i am not here to shirk that responsibility. i am deeply disappointed by what the i.g. reported 37 i have been removed from the job i loved. and i offer my personal apology that some people within the gsa acted as they did. the taxpayers deserve better than this. the actions of those responsible for the expenditures outlined in the i.g. report failed to meet the obligation we all owe the american people. those actions failed to meet the standards i expected from those employed in p.b.s. headquarters and throughout the regions. and those actions dishonored the thousands of hard-working and dedicated federal employees i have worked with over the years. at the gsa and at other agencies

the federal employees and managers with whom i have worked in my times both inside and outside the government have overwhelmingly been concerned with carrying out their missions within the government's rules at the lowest cost possible. as pbs commissioner i was not involved in planning conferences. as a political appointee i had a policy to not be involved in the selection of contractors or vendors. in the case of 2010, western regions conference, it was a regionally organized event. and while i was invited to address the conference, i had nothing to do with its planning, nor was i involved in approving any part of its spending or program in advance. i was present for only a portion of the conference before returning to d.c. as is the case with most large federal agencies, the gsa holds training conferences for its employees. in my many years at the gsa i attended a number of conferences. from what i personally saw, the conferences i attended were not extravagant. the 2010 western regions

conference described in the i.g.'s report was a serious aberration. when i arrived the first afternoon of the conference, i was shown to a very large suite. i questioned the organizers as to the cost. they told me that all the rooms were within the government rate, including this room, and that my suite was included at the basic room rate as part of the conference's package of rooms. my first morning at the conference i made a powerpoint presentation to the entire group about national pbs goals and priorities. i attended presentations from the four western regions about their projects and performance and another about the gsa's sustainability goals. that afternoon i asked the conference organizers to invite a number of employees of their choosing to my room. my intention was to have a meet and greet with a group of regional employees attending the conference. this predinner reception went from 6:00 p.m. to 7:30 p.m. since this was my initiative rather than an event on the organizers' agenda, i said i would pay personally for beer,

wine, and chips. i was told that food would be made available without additional cost under the conference contract with the hotel. the beer and wine were purchased separately, and upon returning to d.c. i wrote a check for that cost. only within the past few weeks did i learn from the gsa inspector general that the food for this reception was apparently invoiced at $1,960. it is not unusual for an i.g. to issue a report. and federal managers count on that as part of our internal oversight. in the normal course of events the i.g. will issue a draft report. then the agency will respond. and ultimately, the i.g. will issue a final report with its recommendations. the i.g.'s recommendations, including those calling for any disciplinary action, are ordinarily implemented following the release are of a final report. in this case the i.g. issued a very preliminary report last may, and at that time i understood that the i.g. cautioned the gsa not to take personnel actions until the final report was complete. that final report, which contained the i.g.'s

recommendations, was just published two weeks ago. until the i.g.'s draft report last year i was not aware that there had been numerous planning trips incurred in connection with this conference. nor was i aware until i was recently informed by the i.g. that there were questions about the competitive contracting procedures used to find the conference hotel. as i've indicated, it is now clear that much of the expense at the hotel was excessive and unacceptable. therefore, even before having the benefit of the final i.g. report i took measures to try to ensure that something like this would not happen again. in fiscal 2011 in response to this conference and as part of my focus on overhead expenses, i canceled a number of nationally controlled pbs conferences, instituted a return of pbs outside conference attendance, and took steps to reduce spending on travel. further, when i was first interviewed about the conference by the i.g. last month, i invited the i.g. to audit other travel and conferences that pbs had conducted under my tenure. i deeply regret the behavior of the gsa employees involved in

this incident and the damage it has caused. i look forward to answering any questions you may have. >> as the chairman mentioned, mr. neeley is not with us today. he has used his constitutional right to plead the fifth amendment and has hired a lawyer. nor did he testify yesterday. miss daniels, you're next to testify. do you have a lawyer? >> i do not. >> can you pull the microphone,

please? >> i do not have a lawyer. >> okay. i would just issue you a word of caution. i've read your testimony. and there is a great deal of troubling information on there. i would certainly issue caution today as you testify. miss daniels, you may proceed. >> good morning. this is my first time at a hearing. i'm not -- i did not prepare testimony because i was placed on administrative leave last wednesday. all of my files were confiscated. i was directed to turn in all of my government equipment and cell phone to the director of hr in fort worth on thursday morning.

and on thursday evening my supervisor called me late in the evening and said that i would be receiving a letter from the house of representatives requesting my testimony. as you know, i did not provide 100 copies by close of business. i received my letter at 10:30 on friday morning and i'm not clear what testimony you are referring to, yls you're referring to interviews that i held with the i. i.g., of which i didn't sign anything other than the guarantee warning and without my files or anything. and i was not even sure since the title of this hearing was a pattern of mismanagement, excess, and waste i didn't feel comfortable without my computer

or files to be able to even provide testimony to that effect. >> miss daniels -- >> i'll be happy to answer any questions. >> if you don't have a prepared testimony, we will allow up to five minutes, but i was troefrg your transcripts in the investigative report that the i.g. did. that's what we've gone through. we got e-mails as late as last night. and certainly there is a great deal of concern with your transcripts. so you're not obligated to have an opening statement or obligated to go any further than you already have. but we certainly afford you that right to up to five minutes. >> i'll decline to provide testimony but i'll be happy to answer any questions that i can do. >> thank you. i'll now recognize each member for an additional five minutes. we'll start the first round of questioning. mr. miller, i want to first start by better understanding

how you get around rules, how you get around executive orders. how when the president issues an executive order, how members of a -- of an agency may disregard those executive orders and figure out a way to get around it. so as my staff has put together an outline here for me, basically if you get a large number of people together, in this case the western regional conference, 300 people, it gives you a reason to have an off-site meeting. meeting in des moines, iowa modesto, california. but the whole purpose of having these lavish conferences is to go to places like hawaii and las vegas, palm springs, napa, new orlea orleans. that's going to be a good question on why the western regional conference would need to go to new orleans, which is not even the western regional

conference. so you get a lot of people together, it gives you a reason to have a conference. and then you go to a luxury resort. how much per diem are you supposed to get on a trip? >> per diem varies from place to place. and it's listed on the gsa website as to how much per diem per day individuals would get. for example, in las vegas the per diem for breakfast is $10. and it's stated there's a chart of per diem. if your question is why did they have the conference, the western region conference this year, they said that they wanted to showcase gsa talent. >> is the per diem cumulative? meaning if you pay your own way for the entire week do you get a check at the end of the week. and is it you get a breakfast, a lunch, and a dinner per diem? >> you have to put a voucher in,

and you would get repaid the money. it's $71 for the whole day in las vegas. that's for everything, meals and everything. the hotel room was $93. so a traveler would come back and submit a voucher, and that would be paid back to the traveler. >> so if you got a free room or a comped room, you could then apply for that $93 at the end of the day? >> if you received a free room, you should not submit that in the voucher. if you received a free meal that the conference provided, you should not submit that in the voucher. >> and how about appetizers? >> well, according to -- we don't think the appetizers were appropriate at all. we think that the appetizers were impermissible expenses. >> and how do you get around that rule to have appetizers? >> there is a rule that says if

you have an awards ceremony and food is necessary for the performance of the awards ceremony you may have food. as part of the awards ceremony. that was routinely skirted by region 9. >> how often are awards given at these conferences? >> i would guess fairly often. they gave out -- >> once a conference? >> at least. >> every day of a conference? >> i'm not sure if they received an award every day. >> what type of awards? >> well, they received a number of things. they received souvenir coins. everyone in the regions received -- >> to write off a meal, to have -- to have the expensive appetizers or a full meal, whether it's sushi or long list of different types of appetizers we have here, what types of awards would be given? >> i'm not sure that any of those things would be appropriate at an awards ceremony. and the rule is this food has to

be necessary for the awards ceremony. not the other way a. you don't get -- you don't get at ward to get the food. you're given the award and you have a ceremony. and if incidental food is necessary for that awards ceremony, then it's permissible under the rules. it became kind of a running joke. >> but that's how they felt it was justified? >> yes. >> to get around the administration's rule of not having food, they got around it by having an awards ceremony at every conference or every day of a conference. >> many times in region 9 witnesses told us that it became a running joke with the region 9 regional commissioner, that even at staff meetings he would say we're going to have a meeting in another location and we're going to have food. so we have to do what? and his senior staff is said to have said give out awards. and so according to witnesses that we've interviewed it was a

running joke in region 9 that in order to get food you had to give out awards. and many of these awards were silly awards. one of our witnesses characterized them as i guess fake awards and jackass awards and things of that nature. now, getting back to the western region's conference, they gave out awards for theatrical performances. we do not consider that a proper award. the award has to be for contributions to the work of the agency. >> how might they also get around the lodging per diem limits? how would you get a 2200-square-foot sweet or several 2,200-square-foot suites? how would you get a suite at every conference? how would multiple suites be given when it's only $93? >> suites are provided by the

hotel. sometimes as part of the negotiation a hotel will provide an upgraded room or suites as part of the negotiation. they will throw in what they call comped rooms. if they have a number of rooms paid for by the government by the conference. >> what type of negotiation? how would you justify a 2,200 -- how in this case would you justify two 2,200-square-foot luxury suites? it must be some large contract. how do you get a contract that large? >> well, gsa apparently had a very large contract with the hotel. and that the large contract with the hotel would -- >> i'm sorry. mr. miller, proceed. >> okay. with the large contract with the hotel the hotel would throw in a room. and -- >> so how do you build up a large contract? >> well, gsa had a number of

rooms that they were renting from that hotel. and -- >> rooms alone would allow you to get those large luxury suites? >> well, they had catering as well. they had food. >> how much catering? >> it's detailed in the report. they had receptions. they had light refreshments. by the way, light refreshments are allowed in between sessions at a conference, according to the rules. the report identifies food expenditures. on page 9 of the report we've identified $146,527 of expenditures on food and beverage catering. >> let me move on. we are short on time here. we're going to try to stick to the five-minute rule. if you have luxury suites, how would you bring your entire family and friends? how would you have a 21-year-old

birthday party for your daughter? how would you have all of these various friends and family gatherings, extended stays on these different trips? >> they would have to be a gift from the hotel. the hotel would provide an upgraded room or a suite. and if you're in the middle of negotiating a contract with the hotel, that might be conceived as a gift from the hotel. >> so let me ask you. if you set up a contract and said our per diem rate is $93, that's how much we can spend on lodging, we'd like to have five days at $93 but we're going to spend several hundred thousand dollars on appetizers, we'd like to extend our stay on the front end and the back and end create a nine-day trip out of that. and by the way, we'd like 2,200-square-foot rooms so that we can bring our family and friends and throw a party there on the weekend. is that possible? >> not under the regulations. not under the rules.

>> is it possible under what you've seen in your investigation? >> yes. in fact, i think that does describe what happened. what you're talking about is essentially inappropriate relationships with vendors. an inappropriate relationship with the hotel would be to go to the hotel and ask for favors that benefit the individuals personally. and all of that is improper. it is appropriate to negotiate a good rate for the food, appropriate food under the rules. but it's inappropriate to negotiate with vendors for personal benefits. that would -- you're not allowed to use your office for personal ga gain. >> nor can you accept -- >> correct. >> -- many other perks that were accepted here. i am out of time. i want to definitely go back to

this a little bit deeper, but at this time i'll recognize ranking member miss norton for five minutes. >> thank you very much, mr. chairman. mr. miller, what the chairman has just described, if someone in region 9 wanted to know whether or not what they were doing was within the rules, under the present structure would they turn -- who would they turn to in region 9? >> is that directed towards me or -- >> yeah, to you or ms. brita. in region 9 with what the chairman described, if someone wanted to know is this within the rules, who would they go to to find out in region 9? >> they have regional council in region 9. and regional council was

consulted at least once about the possession of the -- >> and what did regional council say? >> i believe that regional council provided an opinion that the regional commissioner requested was not in writing and if you could hold on a minute. they provide an unwritten opinion about bicycles. when the charity -- >> because there was an inquiry about the bicycles but not about other things. >> the regional commissioner asked about the bicycles because it would involve disposal of federal property. >> yes. mr. neeley is not here. did he have the final authority