Internal emails from the General Services Administration show high-level agency officials were aware of a spending problem months before the scandal burst into public view.

And as early as last summer, officials disagreed over how to reprimand the employees responsible for excessive spending at a 2010 regional training conference.

Draft letter cites ‘managerial lapse’

In a draft letter, obtained by the House Oversight and Government Reform Committee, Public Buildings Service Commissioner Bob Peck wrote to Jeff Neely, the regional administrator who planned the conference, to discuss an inspector general’s report into conference spending.

“I attended part of the conference and found the general sessions to be creative and professional presentations on important issues that we deal with in the Public Buildings [Service],” Peck wrote. The conference “appears to have been an effective means of informing the attendees about PBS programs and policies and of facilitating an exchange of best business practices,” he added.

The final IG report on GSA’s 2010 Western Regions Conference found the agency spent more than $822,000 on the conference, including thousands of dollars for a clown, a mind-reader and a bicycle-building training exercise. The report also found planners had disregarded procurement laws in awarding contracts for the conference.

“Given that you had executive oversight of this WRC’s planning and execution, you could and should have exercised better judgment concerning these expenditures,” Peck wrote, adding that it “appears to reflect a managerial lapse which I expect will not be repeated.”

The oversight committee said Peck’s letter was a draft version and it’s not clear if it was actually sent to Neely.

‘Not even a slap on the wrist’

However, in response to Peck’s draft letter, Deputy Administrator Susan Brita sent an email to Peck, his deputy David Foley and adviser Stephen Leeds, in which she appeared to push for stronger disciplinary action against Neely.

“I think the letter to Jeff should be crafted with a WAPO mind frame,” Brita wrote, referencing The Washington Post.

The July 2011 email was also obtained by the House oversight committee.

“If this story of GSA (federal workers) spending ‘almost a million dollars’ (and I have no doubt that is how the Post would report the event) at a time of high unemployment, and down economy were to hit the press what would public reaction [be], what would congressional reaction be, and how would the agency respond (especially the political leadership),” Brita wrote in the email, which was obtained by the House oversight committee.

As a “seasoned” federal executive, Neely was “expected to display the highest standards of common sense, and prudent financial management,” she wrote. “He did neither. Sorry, but your letter is not even a slap on the wrist.”

Brita, who requested the IG investigation into the conference, also took issue with Peck’s contention that the conference was mostly substantive in nature.

“Expenses for a clown suit, bikes, tuxedos, and [a] mind reader don’t really lend themselves to a claim of a substantive conference,” she wrote.

Both Peck and Leeds were fired by GSA Administrator Martha Johnson earlier this month, before Johnson submitted her own resignation.

Foley and Neely have been placed on administrative leave.

The House Transportation and Infrastructure and the House Oversight and Government Reform Committee will hold hearings next week looking into the agency’s spending.

(The Associated Press contributed to this report)

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