Analysis: GSA’s scandal pales in comparison to historical misdeeds

From Darleen Druyun to Jack Abramoff to wartime contracting, history shows the Public Buildings Service's lavish spending is small potatoes. Experts say the ene...

The General Services Administration’s lavish spending at the Western Regions conference in October 2010 is small potatoes when it comes to federal scandals. Experts are saying all the attention the newest scandal is receiving from Congress — and now other agencies that are worried about coming under the same scrutiny — is shortsighted.

“I think what really gets under Congress’ skin and really is causing the public some concern was this was so blatant,” said Scott Amey, general counsel for the Project on Government Oversight. “People were ignored who were trying to raise red flags that this was wasteful and that these people thought they were in essence above the law and entitled to this big, huge Vegas party.”

But when it comes to government scandals, GSA pales in comparison. Take the Wartime Contracting Commission, which found the Defense and State departments and others wasted as much as $60 billion on contracting. Or how about the Air Force refueling tanker scandal, which saw Darleen Druyun, the service’s No. 2 acquisition official, break procurement laws and go to jail over a $24 billion contract and Boeing pay more than $600 million in fines.

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Then there’s the Jack Abramoff lobbying scandal, which saw GSA and Interior Department officials go to jail for trading influence for golf outings and other perks.

And finally, there’s the Interior Department’s former Minerals Management Service, which some in Congress and in industry say most closely resembles GSA’s current problems. Officials at MMS, which Interior eventually broke up into two new bureaus, were found by the inspector general to have a “culture of ethical failure,” where nearly a third of the employees in one of the divisions improperly received “a wide array of gifts and gratuities,” from the oil and gas companies the agency was ostensibly designed to regulate. Several staff members also admitted to illegal drug use and illicit sexual encounters, both among staff and with industry contacts.

Bigger examples of waste, fraud and abuse

Paul Posner, a professor and director of the Master’s in Public Administration program at George Mason University in Fairfax, Va., said while the GSA scandal is troublesome, there are much bigger fish to fry.

Paul Posner, Master’s in Public Administration program, George Mason University (GMU photo)
Posner, who also was the director of Federal Budget and Intergovernmental Relations at the Government Accountability Office, said a report from GAO released the same day as the GSA IG report shows much bigger possibilities for saving money and making government better.

“Here’s a report on the crop subsidy. $9 billion spent on subsidizing farmers to buy crop insurance, and the program sends lots of money to the wealthiest farmers,” he said. “The program is not capped like farm payments are. GAO estimates if we cap payments like the farm payments are, we’d save $1 billion. That’s basically 12 percent at a time when we are struggling with deficits.”

Posner said the failure of the program to target its funds to those who need it most at a time when farm income is in record proportions could be considered “scandalous,” or at least “as a significant breach of fiscal control.”

Posner and Amey each said dozens of other programs waste tens of millions, if not hundreds of millions of dollars, more than what GSA spent at the conference.

Another opportunity to save money at GSA

Amey said GSA’s own industrial funding fee is one example. The agency charges other departments 0.75 percent of their total purchase to use their supply schedules. GAO found in its February report to Congress on duplication or possible areas to find savings that GSA overcharged agencies by on average $62 million a year between 2007 and 2010.

Scott Amey, general counsel, Project on Government Oversight (POGO photo)
Amey said GSA and Congress are ignoring that example of waste, which is costing agencies and contractors much more than the $823,000 spent at the Las Vegas conference.

Posner said those responsible for the waste and abuse of federal money at GSA need to be punished, but lawmakers are missing the larger issues.

“I’d love to see hearings done on some of the ripe areas that GAO routinely identifies, that the Congressional Budget Office routinely identifies and a lot of others. That’s the real story,” he said. “There is an opportunity cost that goes with not looking at many of the significant problems because they are not capable of having a face put on them even though they are much more serious and more endemic.”

Tom Schatz, president of Citizens Against Government Waste, said the money isn’t really the issue with GSA, it’s the management problems. He said Congress could hold hearings everyday about whether taxpayers are getting value for their money from the government.

“Congress always finds it easier to create a new program or let something go and say ‘we’ll fix it later’ because there haven’t been any consequences to all of this overspending,” he said. “It’s all lack of oversight. The amount of money varies. The money is one issue, but the management is another.”

At all four hearings this week on the GSA scandal that lack of management, or control, was a central theme.

Culture change is necessary

Like past scandals, it’s now less about what happened and more about what needs to happen so the waste, fraud and abuse isn’t repeated in a few years.

David Gebler, president, Skout Group (Skout Group photo)
David Gebler, president of the Skout Group, a global advisory firm that works with private sector companies to improve their culture to save money and keep them out of trouble, said many times organizations don’t learn from their mistakes.

“Worst case will be employees and managers at different levels will say ‘OK, this is in the limelight now, and Congress will look at it and then the radar screen will pass over and it will go away, and things will be back to normal,” said Gebler, who also is an expert on corporate scandals. “If that happens, then it’s a shame on all of us in terms of not being able to put in corrective measures. If, however, the investigation is correct and if they actually do what they are supposed to do, they will identify where are the vulnerabilities in the system and they’ll implement real change in terms of different levels of accountability.”

He said if others in the organization or across the government see real punishments, then culture change can happen.

Many of the federal scandals over the last decade led to attempts to change culture: Interior broke up the Minerals Management Service into two new agencies, Congress is likely to pass legislation to improve wartime contracting and help fight against future waste, and the Obama administration put in stricter lobbying rules in response to the Abramoff scandal.

Contractor-government relationship to blame?

POGO’s Amey said this scandal could finally help change the culture of agencies working too closely with contractors. He said that’s a big problem at GSA.

“At the end of the day, this is an agency that I think needed to take a more lessons-learned approach from previous problems it has had and previous scandals, and how it was operating,” he said. “Is it working to protect the public or is it really working to protect the vendors and contractors it does business with? I think a lot of people have raised questions about GSA’s role for a long time.”

Posner said GSA clearly needs better controls and oversight, but focusing just on the conference spending across government is shortsighted.

“The real problems to keep your eye on are how we design programs to achieve what we are trying to achieve, how we do the work we need to do more efficiently and how we deliver value for money. That’s where our oversight needs to be focused on. Not this kind of stuff,” Posner said. “Not to say there shouldn’t be some attention to this. But if every agency spends some of their IG resources on looking at conferences and travel that has diminishing returns, compared to where they should be putting their money and focus, where these committees should be focusing, which is on the substance of what we are trying to do in government.”

But too many times the focus gets lost in the scandal of the moment.

Sen. Claire McCaskill (D-Mo.) introduced the first of what many expect to be many bills to try to fix some of the problems detailed in the GSA IG report.


Timeline: GSA Scandal in Perspective

Shakeup at GSA: Full report

McCaskill bill would add new rules for agency conferences

Head of Minerals Management Service resigns

Convictions in the Abramoff corruption probe

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