This week Brian Miller, the inspector general of the GSA, told the senators a tale about the prolific bank robber Willie Sutton, “When they asked why he robs banks, he said ‘That’s where the money is.’ A lot of money moves through GSA.” The GSA provides an estimated $65 billion in services and equipment to every federal agency, including much of the military. It manages the world’s largest real estate portfolio and the world’s largest vehicle fleet and buys every supply for every agency, down to the last pencil.
Last year, the inspector general Miller’s staff of 300 opened 260 new investigations into waste, fraud and abuse. The policing agency to investigate the GSA is on a fast-track growth to becoming a behemoth government agency in its own right.
What I find most interesting about this story is the persistent and pervasive nature of the wasteful fraud and the inability to curb it. Fortune reprinted an article from August 1955 about GSA being “just as much of a mess today as it was in 1952.” During the last half-century we have endured more of the same as evident in the reporting of the latest abuses.
In April 2010, Voll pleaded guilty to defrauding the government of roughly $61,000. Voll used to be deputy commissioner in the western region of the GSA’s Public Buildings Service — that’s the division Jeffrey Neely led until he was placed on leave for his involvement in the Vegas bash. According to the Justice Department, he used his government-issued credit card for personal expenses ranging from spa trips to luxury hotels to restaurants — this went on for years, between 2005 and 2009. Remember that the now infamous Las Vegas GSA conference was held in October 2010.
In May 2011,a year after Voll’s conviction, top GSA officials became aware of the inspector general’s concerns about Neely’s spending. GSA Deputy Administrator Susan Brita told the hearing that an evaluation committee she headed recommended no bonus for Neely. But the former GSA Public Buildings Service commissioner and Neely’s boss, Bob Peck, awarded him a $9,000 bonus anyways.
Due to human nature, a stray criminal stealing money here and there is to be expected, but the GSA has a proven track record of excelling in high rates of fraud with winks and nods from the very top. Throughout the four separate Congressional inquiries into this latest waste of public funds by the GSA, the consistent belief is that the GSA has an ingrained culture of wasteful spending. I suspect that this culture of waste of the taxpayer’s dollar is a rational, logical consequence of our political system. In other words, it is possible that federal employees’ participation in “how business is done” in politics encourages and even grooms this morally bankrupt behavior. To illustrate this connection, we can examine one way that the GSA is used as a political pawn to payback favors to campaign contributors:
- On Sept. 14, 2010, the General Services Administration awarded a $52.3 million stimulus-funded contract to renovate the Lafayette Building at 811 Vermont Ave. NW — right across Lafayette Square from the White House. On the same day the contract was awarded, the GSA ordered the winning contractor, Grunley Construction, to use a “Project Labor Agreement (PLA),” thus forcing the firm to use more expensive unionized labor. Even in the Washington region, union labor only makes up 12 percent of the construction industry, so the price of forcing the PLA on Grunley added $3.3 million to the cost of the Lafayette renovation, courtesy of the taxpayer. Forcing the use of unionized labor on contractors working for the GSA could be because unions collectively spent $400 million to elect Obama and a Democratic majority in Congress in 2008. Awarding billions of tax dollars to a powerful special interest that represents a small slice of a single employment sector is a payback favor.
With GSA employees being directed by the federal government to intentionally waste taxpayer dollars, it is no surprise that they disassociate from the role of financial stewards of the public funds. I contend that the structure of our political system fosters fraudulent and wasteful behavior and this is the reason that no amount of prosecutions, oversight police or new rules and legislation will stop the avalanche of waste and fraud. In this agency alone we have witnessed over half a century of scandals and solutions without any change. It might be prudent at this time to consider other causes of this culture of waste and try other solutions for it.