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 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 single 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. tangherlini, i want you to be more sweeping in your reforms, possibly, than -- perhaps more 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. it'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 the next one is 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 have you respond. i think all of us who have led organizations be they small or large know that the tone set at the top is critical.

there's a very kind of a 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 for taxpayers. am i right on that? >> 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 -- what we do in our procurement areas in terms of strategic sourcing. >> let's be clear here for the 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 is -- 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 exert 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 straighten 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 coming from the grassroots 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 later on you can 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 t 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. let me just say,

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 by gsa, that involves surplus property, we have great savings, thousands of pieces of property that are 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 expenditure of $800,000, but also the wider 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's intended. according to your report, you were informed of potential excessive spending and 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 your investigation? >> yes, sir. >> and once you revealed the findings of your investigation to gsa leadership, how quickly did they respond? >> i think former administrator martha johnson is the one to answer that question. i went through the interim report in may of 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.

but it was draft -- 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. is that symptomatic -- 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? what should we be doing about that? and what should the administration be 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 regional 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. >> thank you, madam chair, 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 vacancies. because of appropriations we're not filling many of those vacancies, but as everyone in the federal service is doing,

we're doing as much as we can. >> thank you. >> thank you, madame chair. >> senator udall. >> thank you, madam 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 out rages in this wasteful, 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 especially 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 southwest 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 included 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 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 -- auditors and lawyers. they do a tremendous amount of work. i will just 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

suspension and 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 cisco integrated circuits with counterfeit parts and sell them ate 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 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-ops 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 udall'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.