you would expect the president of the united states to be careful, and the secretary of state. and they are. we should not allow ourselves to be dragged into a theological argument. that is not their job. and then you focus on the real issue. americans have a problem with embassies. since 1979, no country in the world has problems with indices like the americans. -- indices like the americans. -- embassies like the americans.

i have respect for all religions. i have a jaundiced view of turbaned men engaging in politics. did you see muslim embassies being stormed to anywhere in the world? >> i know you want to comment on that. i do think -- let's keep it to egypt. there is a feeling that we have lost their way a little bit. there was not that much support for the democratic uprisings in the region. it came to the question of mubarak a little bit belatedly. the perception in the white

house, we got dragged into libya in an operation that we were not that enthusiastic about. when you're keeping as far away as possible -- we are keeping as far away as possible from what is going on in syria despite the fact that 20,000 people have died. pivot from the middle east to asia has been a question of turning our back on these countries and running on autopilot. you are right, of course, that our ambassador in libya was an extraordinary man. i would say a very unusual one. that does not mitigate the need for leadership in washington. how do you see this? >> let me say one thing. this is a volatile issue. the first image of any leader when there are of laws broken

and people are murdered is to focus on order and law and order. it is astounding to me. i agree with you about the statement. that is job number one. if you cannot perform that job, you're going to lack legitimacy. in the long run. the debate about religion and sensitivity and things like this, the extremists in the region have a symbiotic relationship with the radicals in our own country. that is what i consider it -- i spent most of my time reading about the diplomats and and the people who produced this film. they are not a representative of our society.

to make sure that we do not keep our wits about us, that there is a strong desire for progress and change in the middle east. i've lived in many of these countries. there is a strong desire to continue to support that. i think we can debate characterization's of leaderships and things like this and how we apply these tools. essentially, we still are the indispensable leader and left town and on egypt. it is the most strategic, most .mportant challenge o he came to power almost by accident, too. he was known as the spare tire. there were politics inside of egypt. there was a strong desire, especially after the parliamentary elections, and

before the presidential elections, i very basic levels. it was in a first-round of the presidential elections for the vote was split -- where the vote was split. figuring out a way forward. it is not yet reflected in their constitutional drafting process. all of these voices, other candidates, are their voices included right now in this process? no. this is were the centerpiece of the struggle is. how do we use the tools of our power to make sure that we are not just simply doing the same thing we did after mubarak. that old model of statecraft that was focused on a singular individual or a set of individuals, but how do we

diversified portfolio and recognize -- and this is going to be hard. to produce -- we're starting to do that. you see this in terms of the economic support being offered. i saw your five questions. one of your questions, are we going to cut off aid in egypt until they restore law and order? i support these things. you work on capitol hill. that button, that switch -- which the israelis support and need -- simply slip -- of finance which is easier said than done. the biggest is a different way of doing business in the middle east that does not say, this is our guide and these guys are going to implement our vision. it is dealing with a broad range

of people who want to build a new society. we need a systemic approach. the system is broken, quite clearly. >> are we on autopilot? i think the problem is that we are. i worked on capitol hill. i worked for a man who did not support a lot of foreign aid. in the region, aid is viewed as an entitlement. when something happens, when there is a fundamental change, these are tax dollars going to these countries. some of them, absolutely imperative. they underpin the type of law and order we talk about. lots of them are about society

and go through government and go to government ngos. and we are right to tie it law and order, rule of law, our values be assistance but we provide and to least be sure that there is a recognition that this is not a jacqui right every year willy-nilly -- a check we write every year willy-nilly. >> it is not about the strategic objective, but it is how you do this. cash flow financing in egypt for military assistance, this is one of the things he talked to our senior commanders in the military 20 partners.

it's tied up in defense contractors. this sounds like a tactical implementation, but it is essential. we will not be tied in the sleek to these ways of dispersing aid, where we can not use it as a tool. i do not think there is much dispute about the broader strategic objective. the bigger threats is in our political and policy debate. voices his sake, let's hold back sending ambassadors, let's hold back certain types of assistance without strategizing with administration. if there is a president romney, i hope we have a much more functional policy debate. >> i do not think ran paul

speaks for many in the republican party. i certainly hope he does not. no matter how you characterize our policy, that there is a sense, a perception of the abandonment by the united states. you hear this not just of money the liberals, you hear this among the people who are fighting for their lives and syria. you hear this and the golf -- in the gulf who are desperate and fearful about iran. you hear all lot about the abandonment of the united states. how real do you think it is? do you think there is an antidote? >> different reasons why people in the gulf feel that the

administration was not very strong on iran. the gulf and israelis were unhappy with the way the obama administration dealt with mubarak. i disagree with that, but that is another issue. today, syria is under civil war. this was not inevitable. it was inevitable that -- if a protracted conflict is allowed to fester, three things are inevitable. more violent, or sectarian, -- more sectarian. there is a moral responsibility for the united states, for the

eu, for the turks, and the arabs. everyone is talking about syria india like iraq. the syrians feel abandoned by everybody. they tell you, we have to sort it out, nobody cares. most of the demonstrations were peaceful, when violence was being exercised by one side, the government. i do not remember in modern times in arab autocrat bombing his own capital.

you mentioned certain cities, in damascus, baghdad cairo. they're being bombed by their own leader. the united states, in the early months of the uprising, could have influenced that. encourage others to provide weapons and others. you always run these risks, but in the end, if we talk about the united states power, we may have lost an opportunity in syria. the other thing is the five countries around syria are important for the united states.

iraq, we invested a lot. and then you have jordan, which is a traditional ally of the united states. if the syrian problem is allowed to fester, it will spillover. turkey is a modern, powerful country. you would think all these factors would push in the administration to be more forceful. in terms of supporting or maintaining american interest. a change in syria -- >> don't you both think that given what has happened in egypt and libya -- >> may be for the short run, but for the medium and long run, something will need to be done.

i respect a lot of your views, at but the big point of hesitation in terms of what to do next comes from the lessons learned right after 9/11 and iraq. when we went in without a clear plan, we had a grand vision. this democratic tsunami was going to wash over the region. but then we found ourselves caught in the middle of a sectarian civil war. we read their with 160,000 troops, people being displaced, and sectarian civil war in the middle of baghdad. we have troops there. >> be think the administration is using this time to develop a plan and a vision for syria? >> if you look carefully at what

is being done in turkey -- and we can argue there should be more done. what is being done quietly in terms of building the framework for more support. our ambassador to syria, she was maligned by many people. his political efforts to bring coherence to the opposition is essential. non -- more can be done, i agree, but the question is, what is the action plan? what is the plan after words? that was what was missing money went into iraq and found ourselves. the strategic vision of how you deal with a very complicated situation, and i am not using

these as excuses, what is more complicated is the political vision of how the country reconstructs itself. you see how brittle this regime has. and deadly. -- bruce told this regime is. and deadly. i'm afraid the brutality, we will see the numbers go up. we have seen 100,000 people killed in civil wars in recent memory. i would hate for that to happen here. this is going back to the point i started with. >> it is happening. >> will the types of interventions that people proposed to accelerate the violence? that is an analytical question, a very important question. >> i want to open up to the audience. i have two questions.

>> you sound like a correspondent at the white house. >> the story in the british press about how we had for warning in libya, i do not think that any of us would have needed for warning to know. a real al qaeda affiliated groups. we had a full warning from egyptian intelligence about what was happening in cairo. is this just a mistake? is that the simplest answer? >> i saw the headline. there should be an investigation. i support your question to make the diplomatic case. i think that we need heroes on the front line working there. mistakes were made, as we saw the unrest starting this week.

there were multiple warnings about 9/11 there were ignored by the bush a administration, which was a bigger strategic blunder to meet. >> that strikes me, because all the same people that said that often said bush should not be arresting people in the street, that we should be pursuing terrorists as criminals. i know that the president first called in the fbi to deal with the libya challenge as a criminal matter. this is a big, much longer fight, and not appropriate. what would have been wrong with the president of the united states coming into the rose garden and saying -- i am horrified by what has happened in egypt and obviously horrified by what has been done in libya. the safety and security of american citizens is my foremost responsibility.

i would like to stand here and remind the people of egypt, the president, the prime minister, that american lives were laid on the line for you on the one side and when we supported your efforts on the other side. we stand with countries to stand with the rule of law and you need to understand you need to do the same thing for us. thank you very much, i will look into it -- then walk away. rather than all of this excuse making. would that have been wrong to do? >> actions speak louder than words. >> rhetoric. >> when it comes to defending the minute -- military, you and denigrate the fact we are sending a in -- we are sending in people, but we do not talk about it. as far as discussions, what do you say in private conversations

with leaders to give which need? what do you say publicly to pontificate and make yourself feel good about american politics? that is where i disagree fundamentally. sometimes i think hectoring and lecturing publicly is somehow much more affected in terms of getting out comes. >> do you not think that what really made him apologize was when the president was equivocal about whether egypt was an ally? >> we do not know the time line on all of that. there are all of these rules to public and private diplomacy, which is my point. >> pleased to follow the rules here and wait for the microphone and identifier sought to ask a question. >> good morning, jason epstein.

question, just following up on what was just said, would it have been so wrong for the president or someone high ranking in the administration to at least float or have said something on background to a reporter and question the issue of some of this foreign aid? the reason i ask, danny, i respectfully disagree. increasingly, especially if republicans lose in november, there will be some very serious questions asked. >> i meant that rand paul is an isolationist and i do not think that most of the american people are isolationists. he represents views that people share when they get angry, but i do not think that the vast amount of america is isolationist. that is what i meant. >> it is a great question, actually, and this private

public diplomacy approach, would it have been more effective? i do not know, but given my concerns about where congress is, we already have that tool in place. there is not a lot of appetite for much of this spending. we have had two delegations in the last few weeks. america into egypt, again, i actually think somehow that our political system, dysfunctional as it is, is always sending that signal and i tend to believe that there are more down sides to all of that. going back to this issue of balance, i think that whoever is president hear, investing in our competitiveness, there is a strong strain within the politics. it is already out there, in a sense. the package that we talked about

for egypt was announced one-and- a-half years ago. it was not solely bureaucracy or lack of american leadership. it is a very complicated debate that cuts across both parties on capitol hill. my view is this, meeting the longer run in this decade, that money is going down. it is likely going to be something much more small. i think we should consider aid to be a bridge to something rather than a system of fostering dependency that is dysfunctional. this is where i think we all agree and if we put our minds together, we can use this downside smartly. >> right here. >> thank you.

brian, it sounded like you were talking about something on the foreign-policy front that was like welfare to work. [laughter] which is an interesting concept. i wanted to make one observation, which is that you, brian, in your early remarks said that it was important how we talked about these things. what you said this morning is a classic example of how to talk about things. danny, i will say that you have been doing a lot of this. it makes a big difference. i officiate it. i want to try a slightly different take on this overall perspective, which is to start with an observation that start shortly after the arab spring plan which they said that fear was the berlin wall in the middle east.

i thought that was a pretty interesting observation about what was happening. the second part of that is -- what he was not saying, what i think we generally agreed on in this country was what was happening in the middle east, it was not something induced by or led by america. it was something that happened from the ground up in the middle east itself. so, if you buy that point of view, that the arab spring or arab awakening was not induced by america, why is it that today, as things seem to be falling apart in egypt, libya, and elsewhere, why is it that we think that might be a direct

function of america and not doing enough or doing the right things. if we were not responsible, why should we be responsible for this extension the past to go on for a long time? >> this is a globalized world. danny and i were talking before that when it comes to civil wars -- i did my share of studies on those -- most of them, with the exception of the american civil war, drew neighbors into them. that is why we know if syria continues like that, that would be the case. vietnam, angola, lebanon, you name it, that was the case. as i said earlier that this is something that the arabs have to sort out for their future,

outside forces may not be as decisive, but they can play a role. the european continent for itself apart on spanish soil, a prelude to the war. people do not talk about this, but one reason that turkey is doing well is because of the pressure and desire from the european union with no political prisoners or capital punishment. no one wants to admit that we did it under pressure. so, the united states has a rule.

>> the march of the people at this stage? >> that is the difference. this is a debate we should have. i would like to remind everyone i mellowed out -- mellowed out. >> when i hear everyone complaining about the united states, ok? we do not have a bipolar world anymore. would it be potent politics or political culture?

china, iran, brazil. they defend themselves. look at what they have done. people were being killed for the first time since the holocaust on european soil because of ethnic and religious backgrounds. europeans were like this. i intend, sir? -- in the end, sir? which country is going to be dominant? from the dominant power of the british empire to the american empire -- a term the used loosely. and that is russia, that is iran.

. >> anything that anyone would like to add? >> briefly. the opening bergen for the struggle left on the people, it needs to be about -- it will be a complicated battle and they can in 2012 we are in a much stronger position than we were in 2006 in the middle east, when we were trapped in a civil war in iraq and iran was moving forward with a nuclear program. when our ally was being attacked by hezbollah. is it that we are so much better

now that he is dead and it all functional? we're at the first start of offsets. we can have debates a partisan here at home. but if we keep focused on the strategy and bigger issues of how we actually continue to try to end these machines are -- authoritarian and autocratic. the people of the region were in prison. the u.s. still needs to stay in asia as a vendor and the initiative of the main military and her rent -- military intervention.

it means tools like the people had been trying to use. >> we are running late, so we will squeeze in one last question. in terms of -- >> in terms of backing up these radical groups, for example, the united states is in a hard economic condition ourselves. also, for another quantitative try to take economy. on the hsbc, the banks involved the involving of the financing of those radical groups in saudi arabia and other parts of the world.

my question is -- given treasury also right now in funding to go to the free syrian army, with militants in turkey, these things are taking place. how do you stop this? what do you see the united states and their involvement as in terms of actually creating a condition where these things like what happened in libya right now happen? >> thank you. >> do you think the glass stiegel or something like that would forget that. >> i think that reenacting great depression is probably a bad idea for us. obviously, there is a lot being done should our economic straits

be dictated the we retreat? if i had to say that there was one message that i hear from people like grand paul, is that we cannot afford to be involved in this. so, we should stop. >> i disagree. i think the central question is smashing research did he give you zero for the power in turn thoreau lucien come -- , particularly since last decade, it is really quite remarkable when his store -- historian step back and say that china your change his stripes. -- the tiger changed his stripes.

almost every day the president has the ability to call on them. the one you're talking about, treasury sanctions, those schools and to home those schools and is it game over? no, it is very much a work in progress. thinking about power and what funds these groups, this raises the recall questions and i think we have seen some drastic the hermetic groups >> with that --

groups. >> with that, i am going to first and foremost think our speakers. there will be a lot more to talk about, i am afraid, not just in the coming days, but months and years. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> coming up at 6:00, watch the interview with the house committee chairman hal rogers. we talked about the resolution to fund the government for six more months and the mandatory spending cuts to go into effect in january. >> i think that people really like to see where politicians views have shifted. was mitt romney in 1994

campaigning for welfare reform? for abortion? we want to see what he was doing during his 2002, 2007 campaigns. and there is an element or people think that this is incredibly interesting. >> a try to think, why is and instead of frequency between both issues. >> running for state office for the first time, rod blagoevich. in terms of serving under him? >> a trailblazer and a hero of mine. >> the best way to describe it is the viral part of the internet. >> the reporter from buzz feed, tonight at 8:00 on "q&a."

at the general administered -- they testified about steps that hoped the gsa would take to avoid wasteful spending and prevent further scandals, like the 2010 las vegas four day conference. also testifying was the acting administrator, who begins this hour-long portion of the hearing. >> what happened at that conference was a complete waste

of the taxpayers' money. an unacceptable breach of their trust. this was the pattern of misjudgment that the gsa showed, taking place over several years and multiple administrations. this pattern has no place in federal agency, but is the priorities of this administration and the mission of gsa. since we were founded, our mission has been to deliver value for taxpayers, as well as consistent and responsive services to the agencies of federal government. in this time, our mission has never been more important and it is critical to make every last taxpayer dollar count. refocusing on this core mission has been the driving force behind every action we have taken since i have arrived. as acting administrator i moved immediately to build systems to prevent this kind of waste and

abuse, with reforms the proposed centralize review, cutting back on employee travel. these actions have already saved more than $11 million in taxpayer funds. we have created a mandatory online training conference attendance to make sure that every employee here understands our expectations for what is acceptable at conferences. my next step was to put together a team of experts who spend the next five months conducting a top review of his agency. what were the reforms needed to better accomplish that mission? the top to bottom review has been conducted along several simultaneous tracks, one on one and with the leadership of a

major operating unit. through the great ideas, employees across the country send them in, generating more than 600 ideas from thousands of comments. so far the implemented ideas have already generated nearly $6 million in potential savings. we went beyond the federal government to find best practices from comparable private business models. at the same time, we have performed an exhaustive analysis of performance data within the agency, studying inspector general reports. finally, we have had over one dozen meetings with federal agencies for feedback. further to review, we have instituted reforms addressing the problems within the agency, enabling us to better serve the

american people in future. to start with, i issued an order to consolidate budget, finance, and accounting personnel under the chief financial officer. in that position they will be able to increase transparency, accountability, and oversight, giving congress and taxpayers a better understanding of how and where their funds are being used. one of the top fund -- findings was the consolidation of cio provided an opportunity to improve the cost effectiveness of the portfolio. previously, the chief executive officer had limited authority over project performance. this week i will be notifying of the intent to consolidate budgets and systems by creating a central authority over maintenance informations

systems, streamlining investments while increasing estimates to agency data -- access to agency data. we will also notify conference -- congress and operations under the chief people officer to eliminate multiple, redundant layers of function as performance awards. it is imperative that we never forget that the quality of the work we do must not be dependent upon awards and bonuses. it should be based on pride in the mission and serving our fellow citizens. going forward, this will be the bar that be set for ourselves. to this end, we have cut bonuses substantially, reducing those awards by 85% this year, with a suspension of all awards in the minister's office, but who will

go further. it goes above and beyond the expected level of -- performance. in the future the core elements of our mission, and fully responsibilities with standards defining the agency. moving forward, i have instituted a targeted hiring freeze across the agency as we examine the structure of one of the most efficient compensation processes for our employees. we must be sure that the new hires are lined with our of comes by naming dr. dorothy robine to the service and

returning the gsa to its core mission. finally, as part of the mission to deliver value as well, we also have multiple ways that the gsa could save taxpayer money. many of the fees assessed by other agencies with other services that have not been reviewed we will be requesting this from the federal acquisition service. the war is costing millions of dollars. we have convened an injured- agency working group for the overall fee structure for the schedules and we will be reporting back on the findings. over the past five months we have made significant progress towards building a better to gsa. it is filled with talented

individuals who do outstanding work on behalf of the people in this country every day. i am confident that with the support of congress we can create a culture of continuous evaluation and improvement. that is the kind of culture we need to restore, the trust in the american people. this agency has been focused on providing the highest level of the you. but you think you for your -- >> the key for your good work and thank you for your testimony now. >> members of the committee, thank you for the opportunity to testify in today's hearing. we have several ongoing investigations involving conferences. we have an ongoing audit of

conferences held between october of 2011 and april 2012. we look forward to revising the committee and haveour audits ale have issued three reports recently that are available on our website. those reports found, among other things, the federal acquisition services network services division lacks written procedures and management controls over contract administration and contract file documentation for blanket purchase it -- the blanket purchase agreements. blanket purchase agreements did not provide a complete history of acquisition.

management concurred with the findings of the reports. with regard to purchase cards, office of investigation and forensic findings continue to conduct reviews and investigations of suspicious transactions across the charge card program. these ongoing reviews have recovered over $1.9 billion over the past couple of years through for archers, restitution, fines, seizures cover recoveries, and penalties since 2009. we report on significant management challenges each year. our audits and investigations are structured around these challenges and focus on high- dollar contracts and federal buildings. we will continue to update congress and work with the agency on any serious challenges we uncover within its programs and operations. finally, i would like to briefly address the steps being taken

to a trust fraud, waste, and abuse at gsa. i am the courage of the steps that acting director daniel tangherlini has taken to ensure the steps at the western conference could never occur again. the first step in stopping waste is to identify it. to accomplish that, employees need to be willing to come forward when they learned of questionable activities. the acting administrator and i conducted town hall meetings to reiterate the valuable role employees have as the first line of defense against fraud, waste, and abuse. in the month following the release, the number of incoming hotline tips more than doubled, and i believe we are seeing improvements in employee willingness to raise concerns. i will also know we have responded to each recommendation made in the eastern conference report.

among other things, we move to a centralized office of chief financial officer and other offices. it is my understanding office of administrative services is implementing control over conferences, including spending and procurement to ensure top town accountability in 47 conferences have been cancelled. additionally, a gsa -- gsa has online trading that is mandatory for every employee. thank you again for the opportunity to testify. i would be happy to be answered questions the committee may have. >> thank you. we will begin with a seven minute round of questions from the members. as you know, they tend that senator collins in a dire are asking that you conduct additional investigations into conference and travel expenses

at gsa so we can have a fuller understanding of the scope of the problems. since that time i know the acting administrator has also referred other questionable activities to you to investigate, including $270,000 award ceremony held by the federal acquisition service that we of referred to. -- that we have referred to. i was wondering if it is possible for you to give us an update on whether you have seen further evidence of the scope of the management problems, in other words, beyond the western regions. >> as you know, with ongoing reviews it is difficult to reveal a lot. i will tell you the parameters of audit.

conferencesg at that occurred in fiscal year 2011 and 2012 that over 25 employees attending and over $12,000. we're looking at those conferences. we are identified the high-risk conferences, conferences where the price per attendee is over the average price for attendees. we're looking at similar problems that occurred at wrc. there are many problems that occurred. in the wrc report. western regions conference. there were many problems identified. there were problems with the event planners, which we're looking to see if that is unusual or not. there was problems following

contracting procedures. we're looking to see if that is unusual or not. unusual expenditures. we will continue to look at that. we're focusing on those sorts of issues. as far as we can tell, we have an example in the western regions conference of problems and acting administrator daniel tangherlini has put these things into place to address these. we're looking at the western regions conference to see if there are any problems outside of those. we will report those as soon as possible. the acting director has put in place controls that has prevent problems from happening again. i am not sure how many examples the committee needs to support the fact that these controls are needed. >> ok, so at this point you are

not prepared to say more because your investigation in response to the letter is ongoing? to go it is ongoing. i would love to tell you more. -- >> it is ongoing. i do not want to inhibit accuracy, and i would rather be fully accurate. >> good enough. i appreciate it. i welcome the statement in your testimony that you will revisit he level of fees buthtaat gsa charges other agencies. the fees, for the benefit of other costs, it is the percentage of the dog you -- dollar value of orioles -- orders placed under the contracts has remained stable since fiscal year 2004.

in recent years the fears have generated 250 million per year. they have questioned whether the fee have been lowered to save the agencies' money. of course we welcome that, but the reason is important, which is the fees have generated more than needed to actually run the schedules program. the miller audit program earlier this year found dead as of sept. 2009 that the revolving fund were the fees are deposited had reserves of over $670 million, a considerable amount of money. is there an update from september 2009 about how much is in the fund at this time? i do not have an update on the amount of the funds, but you are correct on the audit

findings. to go to the extent to come up with the recent number, i'd like to submit it for our records. -->> to the extent you can come up with the recent number, i would like for you to submit it for our records. excess funds can be returned to the treasury. it seems the decision making process for what happens to these reserve funds is effectively a black box of this point. i want to ask you to questions. -- two questions. one is whether you have thought about what you would recommend be done with the excess funds, and secondly, are you prepared to do something that will make the process of handling these funds were transparent? >> thank you very much. to answer your second question,

the answer is yes. we need to increase the transparency of all the processes, particularly when they're involved agency in taxpayer money so people know they're getting the best value for their resources that they put in. i really want you to know it was really the ig and gao report that were foundational for us to take a look at the way we charge these fees and build a reserve balances. what the balances are for, and very important reasons why congress gave the authority to reserve these funds so that they can make sure they could continue to provide services, but that having been said, we do not think they have been substantially revisited in quite some time and is worthy of a inspection in terms

of how could we provide a more transparent process, and at the same time, we think there is already an opportunity for us to reduce fees. we of a surcharge on the contracts right now. in many ways it discourages agencies from doing the right thing end using the strategic source contracts. we want to take away that feet and reduce some of their fees. we really want to kick off a broader discussion with the agency partners to say what is the rate structure for these fees going forward, recognizing the analysis done by the ig and gao? >> i welcome that response. i agree with you there was the reason for establishing the reserve fund, so we do not want to eliminate the reserve fund, but on the other hand, this is clearly a time in the federal government for every dollar

counts, and you have million in excess of the reserve funds. i urge you to go forward to figure out how to reduce the fees to the agency's sole in turn that will reduce pressure to save the dollars by taxes, and also to figure out how best to use the excess funds there now to help us in your own small way to get back to a balance. my time is up. senator collins. >> thank you, mr. chairman. administrator, i want to talk to you about the compensation for gsa employees, and in particular, employee awards and bonuses. the data that we have looked at surprised me. it told me more than 40%

employee compensation in excess of $100,000. 14 exceeding $200,000 with a high of 279 $372. -- $279,370 2002. . now in some cases this should be warranted. for example, a soldier that is deployed. there seemed to be uncontrolled over time of employees working in one city but responsible for activities in another city and incurving -- incurring incredible travel costs and per

diem costs. all of that is cause for concern for me, and something of want to explore more with you. today i want to talk to you specifically about some of the employee awards. it is my understanding that for fiscal year 2011159 employees received multiple awards that total $10,000 or more. here is what is interesting about this. opm has a process that says each agency may authorize up to $10,000. it then says awards over $10,000 are quite rare, and that if an employee's performance is significant enough to warrant a

cash reward of over $10,000, the agency must submit a request to opm. opm to ask if it was approved for any be a police the award -- the employees that total $10,000 or more. the answer was they did not. when we further examined this, it looked like gsa circumvented rules by giving the multiple awards problem than $10,000, rather than one time awards that were $10,000 or more. my first question is do you believe giving multiple awards

that eventually total $10,000 in the fiscal year circumvents the opm approval process? >> i do not believe it was in the spirit of the approval process. there is one exception. performance awards in excess of $10,000 did not require approval. putting aside that, which is a pretty sizable group of that number, but also another area we have identified as being in need of substantial review, and that is why we cut the ses bonus budget by 85%. we also identified there are 15 different award categories that people are eligible for. because we did not have the clear transparency and accountability straight down to the field double in the finance office and human capital office,

it was possible for people to get one of the awards at some level within the organization, so i am not in any way going to try to explain or defend what happened before, but going forward, we are building systems and structures that will prevent that from happening and cutting back the budgets because we're reminded folks but the initial compensation is really what is there. that is really what is there to pay them for doing the work, and awards should be preserved for very special and exemplary service, and should be easily explained it completely justifiable. -- and completely justifiable. >> you are right that there is an exemption, but the initial analysis is the 159 employees is not just employees, i think you would agree with that. >> i do. ses t let's go to

employees. how could a building administrator receive a bonus of almost $55,000, which appears to have been awarded for planning the western regions conference? how could that happen? >> i do not know the specifics of that individual. there are a number of individuals who won the government wide are rank awards, a statutory award that requires third-party review of the submission, and those awards are quite substantial from 25-30% of pay. if you have an employee, the top range as $179,000, you can get pretty sizable awards if you win one of the very significant and

special awards. i think in the case of the individual you are thinking about, they won a rank award. i do not know or understand what the justification of that particular one. >> would it trouble you that anyone involved trip -- planning the western regions conference that was so extravagant, such a waste of taxpayer dollars received any kind of bonus? >> that is why we think we have to take a good, hard look at the performance system and recognize one of the ways we should judge performance is not just of numbers, but providing leadership and accountability. a step in that direction is we want to institute a 360 degree presume -- review process so they can be assessed, not simply by their superiors but also by

their peers and employees so we can get a sense of what places we need to develop further the leadership skills of our employees. >> i also want to point out if there recommended award is in excess of $25,000, which many were that we have reviewed, that the direction -- director reduce the nomination, and the president's approval is actually required. my point is it is not as if there are not systems in place to try to put a check on excessive awards to individuals who have not warranted that kind of recognition, but it sure looks to me like gsa ignored those checks and circumvented the safeguards in order to give

extraordinary awards to many employees, and in many, not all, but in many cases the awards do not seem to have been justified. would you agree with that based on the review so far? >> based on the review, i think that actions speak to our analysis. the fact that we cut the budget by 85% and said back to the folks that this is going to be something you get for really special exemplary extremely justifiable x. the test will be can i explain at a senate hearing? a take of that is always a good test. >> thank you.

senator johnson. good morning. >> i always felt the best disinfectant is [no audio[inaud] . senator collins is interesting. as i was briefing for this is $30,000 -- have you seen the video? i view that yesterday. inspector general, i appreciate the fact that your staff has agreed to release that, because i think it is important. i think that anecdotal examples of our -- spending by the federal government is extremely important. this is not just one conference. the drumstick occurred an award ceremony in 2010 were $30,000. -- worth $30,000.

i look forward to that being released because i think the american people need to see that type of abuse. mr. daniel tangherlini, you have canceled 47 conferences. can you tell me what the purposes of the conferences were and why there were scuttled in the first place? >> that was part of the reason why we cancelled them. every conference now has to come through with an explanation in detail what the benefits are to the taxpayer, and what the results will get out of it. in some cases there were some applause and the way it was constructive that we referred it to the inspector general for additional analysis and have the legal team look at it. while we thought there was value to the conference, we did not think we could explain or justify the mechanism to which the way was put together.

other conferences frankly we did not feel there was sufficient justification for us to use taxpayer money. >> could you describe what some of those things were about? my guess is there would be going on for decades. -- there would of been going on for decades. i just want an explanation of the government conferences about. >> i think the primary focus is to bring people together and improve training opportunities to exchange ideas, build connections and relations. there is nothing in principle wrong with the conference. the question is, are there other ways to do it? are there other means to making those connections? are there other events, such as the annual expo event where people could do it instead? that has been our cast to push back on the organization and say listen, it is very important we recognize the limitations we are facing with the resources, and

it is important that we look at different ways for us to get whatever value they thought the record to get out of that event. were going to get out of the event. the conference is going forward are about the agencies they serve. things like the expo conference, which we brought together thousands of vendors. we brought together thousands of government contracting officers. we provided hundreds of hours of training. we made sure when people got there that they recognize there were going to a government training conference. it will look everyway the way it sounds. that meant it was going to be focused and mission oriented. if people did not have business to do there, they needed to not, or leave once there were done. to go both of you gentlemen of work for other government departments. department of treasury and

justice. -- >> both of you gentlemen have worked for other government departments. not writing them out, but it is it a similar practice of having 50-60 conferences per year? >> i came from the treasury department where we took very seriously our stewardship of tech's paul -- taxpayer resources. certainly in the three years of was there i never saw anything like that. >> mr. miller? >> neither have i.. >> so gsa is the only one holding conferences? >> they would hold conferences at the national advocacy center in south carolina and trained and trial attorneys, those types of things. there would have a heavy substance.

was it a typical budget hundred of thousands of dollars? >> i would doubt that very much. speaking of budgets, in my briefing meant -- materials i have it listed at a quarter of a billion dollars, which unfortunately in our government is a rounding error. that is not your full budget, correct? >> know. -- no. >> what is the total amount? >> the best number to use is $23 billion. there are another $40 billion that flows through our vehicles, but not directly through gsa. >> as a business department you see some department drastically out of control, you cut the budget. i am skeptical about, it's going out -- going back decades about how low reckless this agency has been.

i really do believe in many cases agencies as have to be cut. what cut could gsa live with and is that the best way to cut deficiencies? >> i would be concerned about doing across-the-board cuts. the really important thing is to look at the mission. >> haven't people been doing that for decades and not been able to get control over that? >> part of a concern is we need to make sure we're not cutting the budget so that we cannot take care of the facilities. the biggest thing is are we applying the resources in the way they're meant to be applied? r. weaver -- applying them to broken buildings, providing the most efficient acquisition services. that is what makes people really upset, if you have $8,000 spent on a conference that could have gone into building a better heating or ventilation system that will save taxpayer money by

reducing energy, that is incredibly unfortunate and abusive. >> i just want to get your response. i sent a letter on april 30 about the u.s. grain building council lead program. drafted 2012 program, pretty drastic departure. i am highly concerned about products not be able to utilize that will cost jobs. are you working actively on that? will we put a stop to utilization of that? thee're looking at standards, and we want to make sure there is a fair, open process. i do not know where we are in response to get to the rule making, so i want to make sure i do not upset that very complicated legal process, but i will say we have heard many of those concerns, and we're trying to reflect them in the way we handle that going forward. >> i will enter this into the record that i would really like

to work with your staff on getting answers on that. thank you. >> thank you mr. truman. senator mack haskell, the key for being here. mckaskill.r >> i have a very vivid memory of us sitting in a building in kansas city going over one of your audits. as a former auditor you sent some things to me in the meeting that went in my hard drive, and that was you believed there had been people, and this was way before the conference ever saw he light of day in l.aas vegas, but this was a public relations contract that had been given out without a bid that seem to be terribly wasteful and without much results. i remember you communicating to me and the meeting that as a

wise and auditor and governor were surprised, and frankly, deeply concerned over some of the responses you had gotten to some of audit findings -- some of the audit findings. that is what i realize there was a very wrong process of the top of gsa. i even remember where i was standing when i was complaining to him that he was not taking aggressive action against the woman who had missed lead at this committee at a hearing about that contract, and that you have documented she had misled this committee. i remember talking to him and saying what are you going to do? he said nobody reads that stuff. that was the moment i understood how big a problem we had at gsa.

he was just dismissing the findings and found out later she had got a bonus. she made a huge mistake in judgment, violated procurement, a regional boss, and she had misled this committee. and you have documented that. and they gave her a bonus. i just want to compliment you for your doggedness. i want to compliment you for what you do. i am hopeful we can get the inspector general improvement act passed. it is being held right now. it is on the floor, picked being held. we're going to try to call out the secret hold, because the more we can empower the ig, the more likely it is we will be able to clean up messes like

this. and i think you are trying very hard. i have great respect for the bold moves you have made. if anyone does not think your bold, they do not understand the ses service. they did not understand when you cut the bonus budget by 85 percent, that is an earthquake. there is a lot of nodding heads, because people in this room understand the calcify power, and that is one of the questions i want to ask you about, and i know there are arguments on both sides, but in a very tricky move between trans -- transformation to the administration, they basically took the political appointments from the different areas in the country and remove all of their power. when no one was watching, they took the regional political appointments that are the eyes and ears of congress into the

agency and basically put them out to pasture and took away all of their power. nobody ever said anything when the new people were put in place, they found they had an office with no one reporting to them. they have no authority to do anything, so the woman in kansas city basically did not have to listen. no power. so is that a good idea, and why did no one ever say anything about that, because all it did was in fact muscle up the middle management of this agency and what i think could be the congressional oversight. i will take the first that. i agree with you that there were substantial progress --

with the agency. some of those changes are going to require additional work on what is the long-term goal of the regional administrator and how they fit within the administration. they are bigger questions, but i do not want regional administrators out there who feel they are not empowered to call a waste, abuse or concerns and say they do not have power to resolve them. they're the ones that determine whether things can be bought. their work closely with our senior procurement executive to determine who has warranted it does not have them anymore. we have a weekly phone call with them, with the regional administrators with the deputy administrator. if there is any concern, problem, someone not listening to them, i have told them if

they cannot resolve it to bring it to me. if someone does not think the report to the regional administrator, i certainly hope they do not think they did not report to me. that is what we've been doing to make sure we have clarity in the organization. >> the regional administrator in kansas city try to impact the situation. he was called to washington and asked to sign of loyalty oath, which was shocking to me that that would occur. he was tied to point out some of the problems, and he was called on the carpet. i was on a mission to see if we could rattle the cages. i am glad las vegas came along, because that rattled the entire structure, which needed to go.

as time went on and i became more familiar, i was more and more surprised of the judgment calls being made. do you have any comments on the assault -- the calcification of middle management that really began to pull the curtains on progress of oversight by removing the power of the regional administrators to have any supervisory authority whatsoever? >> i think we have found two data points. one was kansas city where there was an out of control of regional administrator, and many problems that you in covered in your hearing and another point is the western regions conference where we had a regional administrator again that was out of control, so that that structure was not working. ultimately how an agency organizes itself and chooses to manage its self is an agency

function and not really the drop of the hands -- the job of the inspector general to tell them how to organize themselves. >> i just wanted the chairman to know that this happened. it was almost as if they waited in the confusion in the transfer of administration. knowing that no one would pay close attention. they moved quickly and cleanly to change the supervisory power that congress has a role in. this augments and handles the oversight capacity of congress, and clearly i am a big fan of the acting commissioner. i think he has taken really aggressive steps that are hard to do in government to clean this mess up, and i do not think we can keep playing the course.

the horses try very hard to clean up everything, but i think it is something we should take a look at as to exactly how and when this happened, because i think it is really problematic they had enough nerve to do this with no one was looking. >> think you. i agree with you. we will take a further look at it. -- thank you. i have a few more questions, so we will go another round. i wanted to talk to you about purchase card abuse, which has been a long-standing concern of the committee, and that is whether agencies generally exercise proper controls over purchase cards, which are government charge cards given to employees for making small procurements. overall it needs to be said, you said these purchase card save

the government money because it helps eliminate paperwork. the numbers are really remarkable. federal employees spend over $30 billion annually using these purchase charge cards. this generates approximately $2 billion in rebates for agencies from the credit-card companies. obviously we have to guard against abuses by those who use the charge cards for a legal or fraudulent purposes. i will add here shamelessly, but i think constructively that it is my strong hope that before congress adjourns this session that we get final passage to a bill sponsored by myself collins and others to require agencies to adopt better internal controls over the charge cards.

gsa, as you well know, is the agency that negotiates the contracts with major credit-card companies for their charge cards that federal employees use. obviously we would hope that gsa would see itself as having a special responsibility for being is the word of charge cards, which is why it was insult to injury that in region 9 the deputy was arrested in 2010 and pleaded guilty for embezzling taxpayer money for personal use on items such as luxury hotels, meals, and spa treatments. my question is this, one of the things that was interesting to me that i learned in the responses is there have been very few disciplinary actions for purchase card abuse and the

past five years. only one action in 2007. none at all for years 2009-2011. maybe that is because there is no purchase card abuse. on the other hand, when we see some of the other irresponsible behavior, you have to wonder, and i wanted to ask going forward, argued either looking into whether there have been abuses that should lead to disciplinary action, or are you taking pro-active steps to make sure there are no, to the best of your ability, abuses to the use of the purchase credit cards? >> the answer to both questions is yes. on the retrospect of work, we will work closely with the inspector general as we go to and go the conference's

and reconcile past purchase card or travel card to see if we can't find anything there. going forward, it is important we create the same kind of systems and oversight that make it impossible for people to hide behind the organizational complexity and raises our visibility into how people are spending taxpayer money within gsa. we have reduced the number of purchase cards within the organization by nearly 15%. we've taken back a bunch of the cards. the other thing we're going to do is we're going to buy a set of analytical tools so we can really look at the purchase card volume and try to find patterns and discern information. this is something that the credit card companies provide as an extra service. so we get better data, more transparency, more visibility so

we can see what is going on in the field. >> i appreciate that. do you want to comment on that, the use of purchased parts? >> we of ongoing reviews. since 2009 we have recovered $1.9 billion in purchase card cases. i highlighted that in my opening statement. we continue to analyze them. we currently have criminal investigations going regarding abuse of purchase cards. >> that is important. it does not really seem adequate that there were only two disciplinary actions in the past five years of the agency for the improper use of purchased parts. do you agree? >> i cannot dispute that figure. i do not have information about disciplinary actions taken

holders -- taken against holders of purchase cards. i know of one case it is ongoing and the purchase card authority was reduced. that did occur. the prosecution, a criminal prosecution is not a disciplinary action, that is criminal prosecution. the person is usually bias as a result. >> is that going on right now? >> i believe we have more than one. at least one of them is outside the restaurant -- the western region. we of others going on, too. -- we have others going on, too. >> right. that is important, and certainly says that what you are doing to try to curb the

possibility of the purchase card fraud by employees of gsa is totally justified. i think you for that. -- thank you for that. i want to pick up on a couple of questions that senator mccaskill was asking about the regions. we talked about the importance of getting it under control from the headquarters operations, but i think there were other questions to ask about the regions as well, and i will start with you, with a broader question. tsa now has 11 regions. the national capital region and 10 other offices. -- gsa now has 11 regions. i wonder if you thought about the base line question of whether this is too many regions? >> that has been the first question we asked in each one of

the top discussions we had with each of the regions. by the 11th time i answer the question, they got much better at answering it. the fact it -- the fact that what we do have such our retail component to it. we needed to run 9000 facilities and they have leases or government owned and specific local needs. they have specific local requirements. we do contracting work with agencies that are spread throughout the entire country. there are specific needs of those agencies have. the biggest question is how to restructure those regions and do we need redundant systems, and how do we overcome some of the challenges that have faced the organization since the peace in 1955. the ability to have transparency and disability to what is happening at the local level,

and making sure there is consistency in the way the services are delivered. one of the things that was very striking to me and really supported our decision to move forward with consolidating the it function, is we have 11 different management systems. he has their own for managing operations. buildings are different, each one is different, but not that kind of variation. we do not have as much visibility into the ways these buildings are operating, the expenditures. we make per brian and his team's job even harder. as a result, we do not have the management of resources. we need to untangle that the web of the reporting of transparency, and that we have to ask ourselves the bigger question, the question that has not really been asked since we

were founded in the late 1940's, what is the best way for us to cover the map and deliver services? >> the answer today is you are considering the question of whether the 11 regents are appropriate for too many? to go i think that is fair to say, a broader discussion we want as part of the budget discussion. in the meanwhile, that is not a reason for us to not make sure the regional administrators did not have the power and resources and accountability they need to oversee the functions. it is a big country and a lot of transactions, so we will need regional infrastructure. what does it look like, and how does it work? it is reasonable to keep asking the questions. >> i will ask for patients for one more question on the subject, which senator was,

sch. do you think we need a political appointee over each region, or should this rather be a civil service person? >> i think that is really out of my line at to comment on that. obviously there is a sense in which the regional administrators are the eyes and ears of the senate, because they have a great deal of input into the political appointments. on the other hand, i have always been a career employees, so have a great deal of faith in career employees, too. it is not up to me to make this sort of a call. i have seen abuses each way. >> would you step into that? >> i would -- was hoping he would answer for me. [laughter] i think that is also a baseline

question with ask ourselves, how to restructure ourselves and how do we make sure you have the right level of accountability within the organization? we heard senator a task will make a very good point about the need to make sure we do not install a group of folks who sit there for so long that they do not feel the report to anyone. that having been said, it is hard on a continual political replacement cycle to have that many high-quality people to consistently do those jobs. that is the balance we have to strike. we have started the budget process and review of the questions are being asked. we do have a constitutional event happening in november that will allow us to rejigger the administration, so it is the right time to ask those questions. >> thank you. i will pick up where you left

off, because mr. daniel tangherlini and i had exactly the discussion you just did what we were talking on the phone. i think this is a difficult issue. how did you ensure accountability and appropriate authority? i served as regional administrator of the service administration for new england in the final year of the first president bush administration. it was a difficult time when new england was going through a lot of bank failures. i also heard about previous regional administrators in some previous administrations who did

not take the job as diligently as i did. i think this is a difficult call because these are short- term political appointees. some of them are terrific, believe a public service, excellent public managers and have terrific skills. some of them are being rewarded for helping the president be elected, and they may not have the skills that are necessary. i did not know the answer to this question. i truly do not. i think it is something we need to talk more about. i do not know how we solve it, because it depends so much of a person who was appointed. >> i feel the need to put in a plug for the regional

administrators we have. the of a great team, committed and involved. i think one of the big problems that has not been resolved since the fortune article since 1955, which i also read and was amused to see how many similarities there were, we really have not built the strong accountability and transparency systems, the real visibility down to the field level of work. but happens is we have -- what happens is we have bureaucrat cloud cover that prevents us from seeing what is going on in the systems. it is very hard to compare the data. the chairman pointed out the fact that we simply could not say how much we spent on conferences because we did not collect the data and that way it did not have a central repository for recording that expenditure. we need to have that, and that is what we think will help us solve some of the problems we have not been able to solve up

until this point. >> staying with the theme of accountability, you mentioned the recoveries or improper use of purchased parts, and i think you said there have been recoveries of $1.9 million, which is a considerable amount. is there an effort under way to get cost recovered from the improper expenditures and relate it to the private parties at the western region that were charged to the taxpayer? i understand there was a $120,000 birthday cake that as belle's allegedly impersonated an employee in order to get into certain events. the per diem meal charges. these were provided as part of the conference. is there an effort to recover

those costs? >> that was one of the first conversations that i have with band. >> with the assistance of the inspector general and their team, we have submitted bills to a number of the employees. we have withheld final payments of severance or benefits for some of the employees that are no longer with the gsa. in one case we received reimbursement from a contractor that have provided an eligible expenses -- in eligible expenses of about to us. working closely with the inspector general, i will commit to you if there is a dollar we can get back, i will try to go

and get it. >> i think people really like to see where politician views have shifted over the years. i think people like to see whether mitt romney in 1994 was campaigning against welfare reform for abortion. they wanted to see where he was during the 2002 campaign. i think people really like to see how the politicians have devolved -- have evolved. i have tried to think, why is he has changed so often? why he found it so difficult to come down on one side of the issue and floats between both issues. >> rod agojevich is a trail

builders -- a trailblazer and hero of mine. >> the best way to describe it is the by rolf, beating heart of the internet. take a more with andrew -- >> war with andrew kaczynski tonight on today. >> search and seizure in your home against due process, and i strongly think the privacy protections that our founders took for granted in the internet telecommunication age, you can take for granted. you have a legislative to make that happen, but the short answer is i feel very strongly about information about yourself is yours of us there is a law enforcement reason or sore -- or some overwhelming public good reason to go around the privacy screen.

>> the question of technology and privacy with congressman joe barton monday night at 8:00 eastern on c-span2. both chambers of congress return to session next week but not until wednesday. the house gavels in at 2:00 eastern for legislative work with both after 6:30. on the agenda next week, a resolution of disapproval aimed at blocking the of bought -- obama administration changes to the welfare of all. also expected, a package of five energy and did our mental bills aimed at boosting energy production and job creation. all of the house live here