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April 24, 2014

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Federal Government:

Apparently, you can spend too much in Vegas — doing so cost GSA official her job

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AP Photo

Martha Johnson, head of the government’s General Services Administration announced her resignation Monday, April 2, 2012, after an internal government investigator found that her agency had spent too much money on a 2010 conference for 300 agency workers at the M Resort in Henderson.

M Resort


Despite a weak local economy, the M Resort, pictured last week, opened in March to big fanfare and big crowds, some attracted by generous casino promotions. Since then, the property at St. Rose Parkway and Las Vegas Boulevard has tinkered with offers and games, scaling back on some of its higher-paying machines. Launch slideshow »

When Las Vegas officials encourage conventioners to stay and play in Sin City, it’s usually with the intention that they’ll spend a lot of money on city establishments and entertainment.

But this week, everyone is wishing one government agency hadn’t spent quite so much.

Martha Johnson, head of the government’s General Services Administration, announced to her employees Monday that she’d be stepping down from her post after an internal government investigator found that her agency had blown too much money — $820,000 — on a 2010 conference for 300 agency workers at the M Resort in Henderson.

“We are always happy when people choose to visit Las Vegas,” said Jeremy Handel, spokesman for the Las Vegas Convention and Visitors Authority. “However, we’re even happier when people choose to visit responsibly. Taxpayers need to know that their money is being spent wisely, no matter where that is.”

The government’s frustration is not simply with how much money was spent, but also with how much investigators say could have — and should have — been saved.

A thousand sushi rolls at $7 apiece, $48.80 breakfasts and $95 dinners, $75,000 for a team-building bike-building exercise and a total of $136,504 for two pre-event scouting trips, five planning meetings and a “dry run” of the conference were among the most egregious costs listed in the government inspector’s report, submitted Tuesday.

“GSA spending on conference planning was excessive, wasteful and in some cases impermissible,” the inspector general’s report read. “GSA’s approach to the conference indicates that minimizing expenses was not a goal.”

The inspector general found the government’s conference planners had engaged in a quid-pro-quo with the M Resort: In exchange for meeting the government’s per diem rate on hotels (capped at $105 per night; the cost per room ended up being $93, $2 less than the hotel’s base rate as advertised on budget travel sites), they would foot a higher-than-usual bill for food — such as the almost $50-per head cost of breakfast, when the government normally caps that expense in Vegas to $12.

"Recognizing that [the lower hotel rate] 'would in essence cost the hotel $16,800,' GSA offered the hotel 'concessions,'" the report reads. "These included increasing the food and beverage minimum. ... As an additional concession, GSA said it would attempt to book another event at the hotel in March 2011, noting that 'GSA absolutely loves this property' and 'would gladly share any future leads with M Resort.'"

The report also found the government disclosed their maximum allotted spending cap per day of the conference — $75,000 — during the pricing negotiations. A spokeswoman for the resort did not return a message for comment Tuesday.

Lavish meals and overpriced food may be par for the course for corporate trips to Las Vegas, but for a government that's committed itself to cost-cutting, it doesn’t fly.

"President Obama made clear that the people who serve in his administration are keepers of the public trust and that public service is a privilege,” said White House Chief of Staff Jack Lew. “He was outraged by the excessive spending, questionable dealings with contractors and disregard for taxpayer dollars. He called for all those responsible to be held fully accountable given that these actions were irresponsible and entirely inconsistent with the expectations that he has set as president."

Even Las Vegas’ biggest Washington boosters agreed that the GSA convention had gone too far.

"Las Vegas is the best place in the world to hold a convention, and it's understandable why people want to have business meetings here," Senate Majority Leader Harry Reid said. “However, this situation demonstrates a complete lack of common sense.”

While the White House’s pointed response to the overspending at the GSA conference sends a message about the administration’s position on overspending, it also contextualizes a complicated history of comments the president has made about Las Vegas.

Click to enlarge photo

The M Resort in Henderson.

The White House has sought to quash speculation that the president is anti-Vegas ever since 2009, when Obama told an audience in Indiana that bankers accepting bailout funds shouldn’t be heading to Vegas "on the taxpayers' dime." A year later, he told a crowd in New Hampshire that people shouldn’t “blow a bunch of cash in Vegas” when times are tight.

(The president has since made several trips to Nevada to campaign for Reid as well as three trips in the past six months to Las Vegas; First Lady Michelle Obama and her two daughters, Malia and Sasha, were also vacationing in Las Vegas just last week.)

Las Vegas brass bristled at the suggestion that the president was warning people away from Sin City — but that doesn’t appear to be the case, according to the inspector general’s report.

"The conference was to 'celebrate, share, and showcase the diverse professional and personal talents of GSA associates.' GSA considered this theme a good match for the Las Vegas location, which, as GSA stated, has long 'been a destination for talented musicians, dancers, magicians and showmen' to 'showcase their talents to the international audience Las Vegas attracts,'" the report reads, suggesting the administration had quite a Vegas-friendly conference policy.

But the GSA activities disclosed lend some support to what may have been the source of the president’s earlier quips of Vegas apprehension. It’s fine to support the performers and entertainers of Las Vegas — the administration just wishes they hadn’t spent quite so much taxpayer money doing so.

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  1. And how many millions of dollars did the first lady spend on her mega-europe trip with her entourage.. when all was said and done, and she was neither elected or a civil servant. President talking out both sides of his face again. Comp me but don't ask me to spend money, because I AM THE PRESIDENT....a joke at best....

  2. I think this example showed up the massive Washington spending in a bad light. To use a Christian analogy she had to go so others might spend. It also lights up the vacations/political trips publicized/disguised as fact finding missions etc.

  3. Chunky says:

    According to the military it costs $181,757 per hour to fly the President around in Airforce One not to mention the support costs to local governments when he lands and is transported.

    $2,733 per person if that includes travel, food, lodging, convention services, audio visual, events etc isn't all that much no matter where you have the convention. But, the government needs to take a bit of it's own medicine and maybe do the the conference in DC at a Hampton Inn or similar.

    What isn't clear in this story is how many days the conference lasted so we can get to a cost per day for the trip.

    Conferences require planning visits and rehearsals but $136,000 for that part sounds a bit lavish.

    That's what Chunky thinks!

  4. Shameful misconduct by a high official of the Obama administration. Was it an intentional attempt to embarrass the president or just extremely poor judgment?

  5. Comparing the President's and his families travel is not on par with ordinary conventioneers. He is our President and the first family need better protection
    However, no matter how you look at it, the GSA convention spending $2,733 per person, regardless of how many days, is just too excessive especially at a time when everyone is hurting financially.
    It's just right that the head of the GSA resigned.

  6. So the IG system works at least some of the time. Perhaps M and other resorts need to consider marketing to mid-range people and conventions rather than the higher end. GSA does much of the purchasing for various federal agencies so the IG needs to keep digging...

  7. Makes you want to think twice when the government says they do not have any money. Doesn't matter D or R, they do not have the people's best interest in mind.

  8. As disgusting as this is, all Presidents abuse travel rights far more.

    ChunkyFlyRight already alluded to the high cost of operating Air Force One. In theory when a President travels for political purposes the party picks up the tab. But in reality Presidents try to combine these jaunts with public functions so the cost to the party is minimized.

    I might be mistaken, but it feels to me that President Obama has made more trips to speak at town halls, plant openings, etc. than any other President in the past. He should look in the mirror if he is so "outraged" by this stunt by the GSA.

  9. If only the GSA officials had come here with Michelle Obama and the girls and wasted our tax dollars, they would be just fine. It's perfectly OK for the Obama girls to come here and do that.

    BTW, why are the Obama quotes about not coming to Las Vegas mentioned anywhere in this article, or the one about the Obama girls coming here and partying?

    Oh, it's because he told people not to spend THEIR money in Las Vegas. It's okay for his family to spend OUR money in Las Vegas.

  10. "But this week, everyone is wishing one government agency hadn't spent quite so much."

    That's because they were carelessly spending OUR money. In times when government funding is being cut back for the weakest and smallest among us, it's good to see the feds are taking excesses like this seriously.

    "And how many millions of dollars did the first lady spend on her mega-europe trip with her entourage.. when all was said and done, and she was neither elected or a civil servant."

    Xtlman -- excellent!

    "GSA does much of the purchasing for various federal agencies so the IG needs to keep digging..."

    Roslenda -- since GSA is the feds' Office Depot and real estate agent, that is one excellent suggestion.

    "I heartily accept the motto, 'That government is best which governs least'; and I should like to see it acted up to more rapidly and systematically." -- Henry David Thoreau 1849 "On the Duty of Civil Disobedience"