Bloomberg News

GSA Bash Topped by Justice Gathering in Istanbul: BGOV Barometer

April 09, 2012

M Resort Spa Casino

Expenses at the GSA event, held at the M Resort Spa Casino in Henderson, Nevada, included a payment of $8,130 to print “yearbooks” for participants and $6,325 for commemorative coins, according to an investigation released April 2 by the agency’s inspector general. Source: M Resort

They hired a clown and a mind reader and shelled out almost four times as much as allowed for breakfast.

Yet spending at a government conference that outraged President Barack Obama and cost the head of a federal agency her job last week was topped by at least two other recent U.S. employee gatherings that drew investigators’ scrutiny.

The BGOV Barometer shows the General Services Administration outing cost taxpayers about $550 a person per day. That’s less than the per-person expense of two 2008 Justice Department events, including one in Istanbul on drug enforcement that cost almost twice as much, according to inspector general reports reviewed by Bloomberg. The reports scrutinized the costs of 19 events held by three agencies.

“There’s a lot of spending that doesn’t need to happen,” said Ryan Alexander, president of Taxpayers for Common Sense, a Washington-based nonprofit group. “Agencies should make a special effort to do public reporting on expenses where there are special opportunities for abuse, like conferences.”

The head of the GSA, Martha Johnson, resigned April 2 over a 2010 conference near Las Vegas for 299 agency workers. The five-day conference cost $822,571 and featured $44 breakfasts -- the government allowance for Las Vegas is $12 -- as well as the professional mind reader and clown, and a $75,000 team-building exercise that involved assembling bicycles.

Obama was “outraged by the excessive spending, questionable dealings with contractors and disregard for taxpayer dollars,” said Jacob Lew, the White House chief of staff. Johnson fired two senior agency officials and disciplined others before resigning, Lew said.

Spending in Istanbul

The GSA, which manages property and purchases goods and services for other government agencies, held its gathering at the M Resort Spa Casino in Henderson, Nevada. Its outlays also included $8,130 to print “yearbooks” for participants and $6,325 for commemorative coins, according to an investigation released April 2 by the agency’s inspector general.

Some government conferences that have caused less of a fuss had higher price tags. The tab for a three-day Drug Enforcement Administration conference in Istanbul in 2008 for 368 attendees came to $1.18 million, according to a report last year from the Justice Department’s inspector general.

That amounts to $1,071 a person for each day of the event. Expenses included $52 per person for two coffee breaks during a single day, or about twice as much as the department’s regulations allowed.

Corporate Events

A Justice Department event for 144 participants held in Palm Springs, California, the same year cost $90,201, or about $626 a person for the single-day conference on sex offenders, according to the report.

The GSA spending wasn’t out of line, especially in comparison with spending by companies, said Darren Johnson, the owner and president of Darren W. Johnson Productions in Clermont, Florida, who has been planning events for 30 years.

“It’s by no means lavish,” Johnson said in an interview. “If you want to make a major drama out of it, you can say it’s a lot of money, but if you look at it from the real world, that was a very economical meeting.”

Johnson, who says he invented The Extreme Party Truck, a vehicle that comes with a “kegerator” to keep kegs of beer cold and a reinforced roof for dancing, said such conferences can be justified because they help get employees excited about their jobs and motivate them to do better.

Kozlowski’s Party

“As a taxpayer, I never for a second think of that as frivolous,” he said. It would be different, he said, “if they told me that they had the Eagles playing a concert and they did helicopter tours and were playing at the Wynn Golf Course for $500 a person.”

The cost of the GSA conference pales in comparison to some corporate event spending. In 2001, Dennis Kozlowski, then chief executive officer of Tyco International Ltd. (TYD:US), threw a $2 million, week-long Roman-themed 40th birthday bash for his wife, partially paid for by the company.

The party featured shirtless male models in Speedos and an ice-sculpture reproduction of Michelangelo’s “David” with vodka flowing from his penis, according to court documents.

Kozlowski and Mark Swartz, another former Tyco executive, were convicted in 2005 of defrauding shareholders of more than $400 million.

More recently, American International Group Inc. (AIG:US) spent $440,000 on a conference at a California resort less than a week after the government’s $85 billion bailout of the insurer.

AIG booked more than 60 rooms at the St. Regis resort in Monarch Beach, including the resort’s 3,100-square-foot Presidential Suite. The bill included $23,380 for spa services, $6,939.09 for golf and $1,488 at the resort’s Vogue Salon, according to documents obtained in a congressional investigation.

To contact the reporters on this story: Nick Taborek in Washington at ntaborek@bloomberg.net; Danielle Ivory in Washington at divory@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


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