GSA's leader steps down over wasteful spending report

Martha Johnson, two other top GSA officials, out as IG details extravagant spending and rules violations connected to Western Regions conference.

Martha Johnson, administrator of the General Services Administration, resigned April 2 after an investigation found agency officials had wasted money on a training conference.

 The IG's office released its report on the Western Regions 2010 conference late on April 2. According to the report, the conference cost more than $822,000. The expenses included multiple "planning trips" and "test runs" in which GSA employees stayed at the luxury hotel where the conference took place in October; various violations of contracting rules, including telling a contractor the maximum budget for a training exercise -- $75,000 -- and then paying that amount; and a lavish reception costing $31,208. 

Also out:  Robert Peck, commissioner of the Public Buildings Service, and Johnson's adviser Stephen Leeds, who served briefly as acting GSA administrator in 2009 and 2010, while Johnson was going through the confirmation process. Johnson fired both men before submitting her own resignation, the Washington Business Journal reported.

In her resignation letter, Johnson said GSA had made "a significant misstep" and explained her decision to step down in the wake of an internal probe.

"Reports of an internal conference in which taxpayer dollars were squandered led me to launch internal reviews, take disciplinary personnel action and institute tough new controls to ensure this incident is not repeated," she wrote. "In addition, I feel I must step aside as administrator so that the agency can move forward at this time with a fresh leadership team."

Some observers noted that Johnson, who was confirmed in April 2010, had been in office only a few months before the conference took place and it is not likely that she played a role in the planning.

"When you come into an organization as complex and big as GSA, there are a lot of things in motion when you get there," said Bob Woods, president of Topside Consulting and former Commissioner of the Federal Technology Service at GSA. "There are a lot of moving parts. I don't think it's reasonable to think she came in in April or May and was down to managing things on the conference planning level in the Public Buildings Service."

Indeed, many of the abuses associated with the planning process and documented in the report took place in 2009.

Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman (I-Conn.) issued a statement calling the debacle "a stupid and infuriating waste of taxpayer dollars" and added that the  "people responsible for it should be held accountable."

Procurement attorney Jonathan Aronie, a partner in the government contracting group at Sheppard Mullin law firm in Washington D.C., said that the broader effects of the IG report and the resignations are likely to be minimal, because the spending abuses are egregious.

“I find that big issues actually have a different type of impact that the issues that are in everyone else's sphere of reality," he said. "When I’m trying to give a compliance course to a client, I don’t use a big, extravagant case as my example. Something like this, people will look at it and say, ‘we don’t do stuff like that.’ The things that have a big impact are the things people look at and say, ‘Oh, I've done things like that before.’”

Woods said the situation reflects bad timing.

“Given some of the guidance the agencies have received on spending, this is bad timing,” Woods said. “The lesson is that you have to worry about, and manage, perceptions. Someone was not paying attention to the details.”

At the same time, he was sympathetic to the people who are being harshly judged in hindsight.

“These are people who, for the most part, want to do well for the public. They are dedicated and passionate, and this stuff is judged in the rear-view mirror. It makes you think twice about public service,” Woods said.

GSA has tapped Dan Tangherlini, the Treasury Department’s assistant secretary for management, chief financial officer, and chief performance officer as acting administrator, according to published accounts.