Nevadans, industry scramble to limit fallout from GSA junket

WASHINGTON -- Nevada leaders and the tourism industry are scrambling to limit local fallout as Congress prepares to dig into the scandal that saw a federal agency spend $823,000 on a four-day conference in Las Vegas.

In the wake of an audit that cost top officials their jobs and focused new attention on government waste, the General Services Administration has canceled four upcoming small-business conferences in western cities, including a two-day session in September that would have marked a return to the M Resort in Henderson.

The M Resort is where the GSA convened a training conference for 300 employees in October 2010 that inspectors said went "over the top" splurging for food, drink and entertainment.

An inspector general's report on the meeting, which detailed expenses including a $3,200 mind reader, $7,000 for sushi, $3,700 for T-shirts, and $44 daily breakfasts, sparked an outcry from the White House and led to the resignation this week of GSA chief Martha Johnson.

Public Buildings Service chief Robert Peck and another official were fired, and four others were put on administrative leave, over the report, which detailed violations of government contracting policies in addition to the questionable spending.

HOUSE HEARING CALLED

Now the ripples are reaching Capitol Hill, where Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee, said he plans to convene a hearing this month.

Mica said the junket "is just the tip of the iceberg" of problems at the General Services Administration, which oversees $66 billion in annual government purchases and manages about $500 billion in federal property including 8,300 buildings and 2,100 vehicles.

"I wonder if the $3,200 mind reader told GSA officials that blowing more than $800,000 on a Vegas conference for a few hundred bureaucrats would get them fired?" Mica said in announcing his committee would meet on the matter, possibly as soon as the House returns to session in two weeks.

Mica said his committee has been investigating an increase over the past five years in GSA administrative costs, but the agency has been slow to comply with information inquiries.

"This may explain why the administration has been stonewalling the committee's travel budget information requests since December," Mica said in a statement. "This agency may have been hoping that everything that happened in Vegas would stay in Vegas."

In the Senate, federal contracting subcommittee Chairwoman Claire McCaskill, D-Mo., has asked GSA Inspector General Brian Miller to send "all information necessary to fully understand the findings of the report," including internal agency communications.

A spokeswoman said it was too early to tell whether McCaskill might take further action.

"I've been investigating GSA for more than a year, and this report shows what I'd already suspected: an unacceptable waste of taxpayer dollars at the GSA," McCaskill said in a statement. "Getting rid of these officials, who clearly weren't up to the task of safeguarding taxpayer dollars, is a no-brainer."

LIMITING THE DAMAGE

Meanwhile, Nevada leaders were looking to limit any mud that might splatter on Las Vegas from the scandal and discourage federal departments from scheduling meetings there.

Among upcoming events listed by the Las Vegas Convention and Visitors Authority, the Environmental Protection Agency is planning to host 150 people at a two-day coal mine methane conference at the Luxor in September; the Department of Health and Human Services has scheduled the Renaissance Las Vegas Hotel for 325 people for June 17-23; and the Department of Defense is planning a worldwide education symposium for 2,500 at the MGM Grand for July 23-27.

It would not be the first time Nevadans have scrambled to quell bad publicity. On two occasions, in 2009 and 2010, President Barack Obama made offhand remarks discouraging visits to Las Vegas, to the point where Sen. Harry Reid, D-Nev., urged him to "lay off."

Sen. Dean Heller, R-Nev., on Wednesday cautioned Mica to focus on the GSA's excesses and not to pick on Las Vegas as a destination.

"I agree that the GSA's actions are inexcusable. Taxpayer dollars should be spent responsibly, and those responsible for any misuse should be held accountable," Heller said in a letter to the House chairman. "However, while you investigate this matter, it should be noted that it was not the location that caused the misuse of taxpayer funds.

"The convention services my state offers are the best in the world, and no town in Nevada should be singled out due to the poor judgment by the GSA."

DEMOCRATS CRY FOUL

Nevada Democrats turned their guns on Mica. Both Reid and Rep. Shelley Berkley accused him of trying to cast Las Vegas in a bad light.

"If this happened in Topeka, Kansas, do you think they'd be holding a similar show hearing?" Berkley said. "The misuse of taxpayer funds was outrageous. However, this attack on the greatest tourist destination on Earth will deter business, kill jobs and hurt our economy."

"It is very clear that a Florida congressman is trying to embarrass Las Vegas because Las Vegas is the entertainment capital of the world," Reid said. "This is a politically motivated hearing. The truth is President Obama acted swiftly and responsibly to protect taxpayer money by firing those responsible for lack of common sense."

Reid said earlier in the day that he did not believe the city will lose business as a result of the spending scandal, apparently unaware the GSA had canceled its upcoming small-business conference at the M Resort.

"Las Vegas is a place everyone wants to come to, but the people at GSA used no common sense," Reid said outside a meeting with tourism leaders in Las Vegas.

The travel industry's leading lobbyist in Washington urged a "measured and appropriate" response.

"At a time when Washington is laser-focused on creating jobs and curbing wasteful spending, we hope policymakers will remember that responsible travel can help accomplish these goals," said Roger Dow, president and chief executive of the U.S. Travel Association.

Besides studies that show face-to-face gatherings increase productivity, "we also know that meetings, conferences and events are critical to our economy and support 845,000 U.S. jobs," Dow said. "We hope Congress and the administration will consider these facts when deciding how to appropriately respond to the event from October 2010."

FOUR CONFERENCES CANCELED

The GSA this week canceled small-business conferences that were to take place in Honolulu in June, at the M Resort in September, in Oakland next April and in Phoenix in September 2013.

The actions were taken after acting administrator Dan Tangherlini, the GSA's former chief financial officer, announced the agency was reviewing all planned and proposed conferences and canceling several them "that only or primarily involved internal staff."

M Resort spokeswoman Erika Christensen would not comment on the GSA cancellation. Jeremy Handel, a spokesman for the visitors authority, said he was not aware of it or any other cancellations as a result of the fallout.

Elsewhere in Las Vegas, MGM Resorts International spokeswoman Yvette Monet said the company has seen "no measurable" response from the publicity surrounding the GSA conference. There have been no cancellations at the company's properties, she said.

In a cost-cutting move last November, Obama ordered executive departments to cut spending by 20 percent on travel, printing, promotional activities, smartphones, laptops and tablets.

He urged federal agencies explore videoconferencing and other alternatives to out-of-town travel.

Cathy Keefe, a spokeswoman for the U.S. Travel Association, said it was not yet known what impact that has had on federal travel.

Review-Journal writers Laura Myers and Laura Carroll contributed to this report. Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC. Contact Stephens Washington Bureau reporter Peter Urban at purban@stephensmedia.com or 202-783-1760.