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GSA waste goes much deeper than the Las Vegas junket

Inspector general reports indicate that fraud involving the federal agency's employers and contractors costs millions of dollars every year.

April 23, 2012|By Ian Duncan, Washington Bureau
  • Brian Miller, inspector general for the General Services Administration, testifies at a Senate hearing. His reports indicate that fraud among employees and contractors costs the agency millions each year.
Brian Miller, inspector general for the General Services Administration,… (Alex Wong, Getty Images )

WASHINGTON — It was a simple scam: Coleen Newton-White, a government contractor, and her husband would take General Services Administration credit cards from the motor pool at Ft. Monroe, Va., and use them to sell fuel at a discount to cash customers who pulled up to service stations five at a time.

Between 2008 and 2010, the scheme netted the couple almost $300,000, according to court records.

Although the gas scheme is a world away from the nearly $823,000 spent on a lavish Las Vegas-area conference put on by GSA official Jeff Neely — including a mind reader, sushi and in-room parties — it is an example of the fraud that the procurement and property management agency faces regularly.

GSA employees and contractors — including at least one employee with responsibility for the White House — line their pockets to the tune of millions of dollars a year, according to reports by the agency's inspector general.

With the GSA thrust into the congressional spotlight over the 2010 Vegas conference and travel spending, lawmakers have demanded to know how deep the agency's problems run. Is there, they asked repeatedly in hearings last week, a culture of corruption?

"GSA handles a lot of money," Brian Miller, the agency's inspector general, told a Senate committee Wednesday. "Millions, maybe billions, of dollars flow through GSA. There's a lot of temptation."

And from Miller's most recent report to Congress, it seems more than a few employees and contractors give in to that temptation. The Newton-White case was just one of 64 prosecutions between October 2010 and September 2011 of people who bilked the GSA by inflating costs, or just flat out stole from it.

In October, Miller's office and the Justice Department wrapped up a five-year investigation that found seven GSA employees had conspired to award government contracts in return for kickbacks.

One employee, James Fisher, had responsibility for White House facilities. In exchange for cash and the installation of new kitchen cabinets and other work at his Suitland, Md., home, Fisher steered work in the direction of a favored contractor, according to court filings. In February 2008, Fisher pleaded guilty to bribery. He was jailed and ordered to pay back $40,000.

Lawyers for Fisher, Newton-White and her ex-husband, Lanaire White, could not be reached for comment. White and Newton-White also went to jail.

The largest cases involve inflated information technology contracts that end up costing the government tens of millions of dollars.

Through convictions and settlements, the inspector general's office clawed back $376 million in the last fiscal year, but Miller said it was impossible to know for sure how much money the GSA wasted or lost each year.

"Fraud, by its very nature, is hidden," he told the Senate panel.

The answer to the waste, acting GSA chief Dan Tangherlini told the lawmakers, is to give Washington more power over regional offices and to simplify the GSA's structure.

But a former senior GSA official, who requested anonymity to discuss the agency's inner workings, said centralization had already begun under the Obama administration — and it left nobody "watching the store" in the regional offices, causing more abuse.

"I hate to see it all go down the drain because these politicians who've never run a candy store say they want to centralize everything," the former official said.

Sen. Joe Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee, said his panel would ask Miller to investigate all of the GSA's 11 regions, not just Region 9, which organized the Vegas conference.

"I want to know if there's abuse in the other regions, particularly when it comes to conferences," he toldCBS'"Face the Nation" on Sunday.

President Obama's senior campaign official, David Axelrod, told NBC's "Meet the Press" on Sunday that Obama was "apoplectic" to learn of the GSA spending "because we made a big effort to cut waste, inefficiency, fraud against the government."

Still, Miller told senators last week, the attention paid to the Las Vegas conference has had at least one upside. With more and more tips coming into the agency's hot line, "We have more work than ever," he said.

ian.duncan@latimes.com

Katherine Skiba in the Washington bureau contributed to this report.

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