GSA execs got deals on luxury suites, Congress told

WASHINGTON -- GSA executives who organized the 2010 training conference in the Las Vegas area snagged deals with the M Resort that got them discounts on luxury suites and other perks, according to an investigation aired before Congress on Tuesday.

The resort provided at least two $1,179 suites with lofts at the $93 government rate during five nights of the General Services Administration's Western Regions Conference that October, auditors found. Six other suites normally costing $449 to $599 also were offered at the cheaper price.

Auditors also found instances where GSA employees asked for or accepted room discounts for friends and relatives who joined them in Las Vegas during the time they were negotiating with the M Resort in Henderson, and on occasions they stayed there for multiple pre-conference planning meetings.

Deals like that are not unusual for Las Vegas where conference negotiations can be somewhat freewheeling, according to resort industry observer Anthony Curtis, president of the Las Vegas Advisor newsletter and website.

"I do know when I've negotiated for whatever I have negotiated, whether it is the smallest party or some convention, everything is always on the table," Curtis said.

The problem in this case was that the arrangements appeared to violate government rules, House lawmakers were told by the GSA inspector general at a hearing on allegations of agency corruption.

PRICING NEGOTIATIONS NOT BY THE BOOK

"What you are talking about is an inappropriate relationship with vendors," Inspector General Brian Miller told the House public buildings subcommittee. "An inappropriate relationship with the hotel would be to go to the hotel and ask for favors that benefit the individual personally, and all of that is improper."

An audit Miller released earlier this month showed negotiations over pricing for the Oct. 25-29, 2010, Western Regions Conference were hardly conducted by the government book for the event, which cost $823,000 and has since drawn rebukes for wasteful spending.

Further, the image of GSA officials staying in two-story lofts with glass staircases, floor-to-ceiling windows, multiple flat screens and a freestanding spa tub only added to the anger expressed by lawmakers during the second day of hearings on agency spending.

Robert Peck, former commissioner of the GSA's Public Buildings Service, attended the conference, saying the portions in which he participated appeared substantive. He stayed in one of the loft suites after he said he was assured it was costing no more than the government rate.

Testifying on Tuesday, he said he found it "ludicrously large, and kind of like you'd see in Las Vegas."

Peck was one of two senior GSA officials who were fired on April 2 with release of the inspector general's report. He said he did not condone the excesses but was let go because they occurred on his watch. GSA administrator Martha Johnson submitted her resignation that day.

TRIPS CAME AFTER WARNING

Much of the discussion Tuesday involved Jeff Neely, the Pacific regional administrator and chief organizer of the Las Vegas conference who has emerged as a central figure in the GSA scandal.

Lawmakers learned Neely took trips to Hawaii, Napa Valley, Calif., and the South Pacific islands, all after Miller warned top officials about the excesses in Las Vegas.

A timeline released at Tuesday's hearing showed that Neely took five trips totaling 44 days, including a 17-day trip to Hawaii, Guam and Saipan that he and his wife planned as a birthday celebration.

All came after a May 2011 briefing by Miller on his preliminary findings. While the inspector general was still 11 months away from publicly releasing his final report on GSA spending, he issued the early warning to stop the travel. But it did no good.

Miller said he continues to look into other allegations of wrongdoing that turned up during interviews for the Las Vegas investigation.

"Every time we turned over a stone we found 50 more with all kinds of things crawling out," he said.

Neely was invited but did not appear at Tuesday's hearing, according to subcommittee Chairman Jeff Denham, R-Calif.

At an oversight hearing on Monday Neely declined to answer questions after responding to a subpoena, invoking his constitutional right to avoid self-incrimination.

Denham said he was preparing a bill that would require the GSA to get congressional approval for administrative budgets that fund travel and other in-house activities. He said another bill would forbid taxpayer money from being spent on commemorative coins similar to the one distributed as a keepsake of the Las Vegas conference at a cost of $6,325.

Rep. Michael Michaud, D-Maine, said he planned to submit an amendment to an upcoming GSA funding bill "to prevent GSA from holding these types of conferences in the future."

GSA PLANNERS OFFERED 'CONCESSIONS'

The inspector general's report outlined various ways the costs of the Las Vegas conference ballooned.

When the GSA began shopping for a conference site, the allowed hotel rate for government travel was $105 per night. But sometime after the M Resort was chosen, the hotel per diem was reduced to $93.

With the GSA looking to book 314 rooms in the 390-room hotel, planners recognized the decrease would cost the M Resort $16,800, according to investigators.

So GSA planners offered "concessions," including increasing their catering order by adding a cocktail party and a catered breakfast to their schedule.

The add-ons increased the food and beverage minimum from $76,000 to $110,000, according to the inspector general. The planners also promised that a party in Neely's suite on the final night of the conference would generate about $2,000 in room service.

The GSA ultimately spent $146,527 on food and drink. Conference-goers bought their own alcohol.

"Whoever negotiated the deal (for the GSA) either was very bad or didn't care," Curtis said. "Whoever negotiated for the M side did a very good job. It's their job to pull as much money as they can."

GSA hearings were scheduled to continue today before the Senate Environment and Public Works Committee.

Sen. Harry Reid, D-Nev., urged the committee's leaders, Sen. Barbara Boxer, D-Calif., and Rep. James Inhofe, R-Okla., to keep the hearing focused on GSA abuses and avoid bad-mouthing Las Vegas.

"The GSA's misuse of tax dollars could have occurred in any city in the nation," Reid said. He said the hearing "is not about Las Vegas or where people choose to hold conferences and meetings. The heart of the issue is the need to spend taxpayer money wisely."

The Associated Press contributed to this report. Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.