Luxury suites at Nevada’s M Resort.
A luxury suite at the M Resort Spa and Casino, near Las Vegas, where the GSA's Western Regional Conference was held in 2010. M Resorts/ Office Of Inspector

The head of the General Services Administration was forced to resign Monday after a scathing report revealed that the agency that serves as the U.S. government's property manager spent over $800,000 on a lavish Las Vegas conference at which staff dined on $7,000 worth of sushi and spent thousands more on private parties in luxurious hotel suites.

Administrator Martha Johnson acknowledged in her resignation letter that taxpayer dollars were squandered on the GSA's 2010 Western Regions Conference, at which more than 300 people -- agency employees and their families and friends -- were treated to dinners, hotel accommodation and food totaling $822,751.

Robert Peck, head of the GSA's Public Buildings Service, was also forced to resign over the scandal along with his aide Stephen Leeds.

Four other GSA managers have been put on administrative leave pending further investigation.

A report by the GSA inspector general, the agency's internal watchdog, into the October 2010 conference -- held every other year since the early 1990s -- concluded that minimizing expenses was not a goal, for the regional head of the Public Buidlings Service, who instructed those planning the conference to make it 'over the top.'

The inspector general's investigation uncovered a litany of excessive expenditures and employee misconduct, including:

  • $136,504 on pre-conference scouting trips.
  • $31,208 on a lavish reception.
  • $5,600 on several private parties for senior GSA staff in their hotel suites.
  • $6,000 on commemorative coins.
  • Discounted rooms and food for friends and family of GSA staff

The inspector general's report, published Monday, contained a damning attack on the GSA and its senior managers.

As the agency Congress has entrusted with developing the rules followed by other federal agencies for conferences, GSA has a special responsibility to set an example, and that did not occur here, the report said.

The findings come at a sensitive time for President Barack Obama. His administration is fighting to see that its overhaul of the U.S. health care system survives scrutiny by the Supreme Court, while Republicans lambast the move as an extreme overreach of government power. Though prominent, the partisan fight is just one of many Obama faces in his quest for re-election in November.

Speaking to the Washington Post, White House Chief of Staff Jacob Lew said Obama was outraged by the excessive spending, questionable dealings with contractors, and disregard for taxpayer dollars uncovered by the GSA inspector general. The president, Lew added, had called for all those responsible to be held fully accountable.

The GSA, besides managing and renting out federal buidlings as the government's landlord, is tasked with ensuring that other government entities and their properties are run efficiently -- including reducing costs as necessary.

The regional conference in Las Vegas two years ago was meant to improve the skills of agency employees and help exchange ideas between 'higher-ups,' according to the inspector general's report.

Before the start of the conference, the GSA had sent workers on a series of scouting trips to visit potential hotel venues, costing American taxpayers $136,504, of which $30,000 was spent on catering alone.

In March 2009, five GSA employees toured nine Las Vegas-area hotels to find a suitable venue for the conference. Later that month, 15 staff members returned to visit two of the nine hotels again, staying at the four-star M Resort and Casino in Henderson, Nev., south of Las Vegas, and the Ritz Carlton.

And between March 2009 and October 2010, the GSA organized five other such planning trips at the M resort, where the conerence was eventually held, and the Marriott Hotel in Denver. Finally, in October 2010, 31 employees stayed at the M resort for a dry run of the conference to be held later that month.

During these pre-conference visits, employees reportedly were lavished with $48.80 breakfasts and $57.72 per head lunches.

At the conference itself, the perks kept coming. At a networking event held the first evening, attendees dined on hors d'oeuvres including 400 pieces of $4.75 Petit Beef Wellington, 400 Mini Monte Cristo Sandwiches at $5 each, 1,000 sushi rolls for $7 apiece and 150 units of a $19-a-person American Artisanal Cheese Display.

GSA officials also spent $5,600 for three private parties in their hotel rooms, which included a $922 event the day before the conference for organizers to get to know each other and a post-conference $2,717 celebration party, which officials called a private awards ceremony to circumvent government rules on catered events.

According to investigators with the GSA inspector general's office the event's qualification as an award ceremony is weak, at best.

Other breaches of the government spending rules for conferences -- set, ironically, by the GSA -- included souvenirs for attendees, such as the minting of $6,325 worth of commemorative coins rewarding all conference participants, purchases of clothing for GSA employees and tuxedo rentals.

Other questionable practices included rewarding family and friends of GSA employees with discounted rooms and merchandise.

During one of the many pre-conference scouting trips in 2009, a GSA employee stayed in a suite that had a connecting room for her sister and niece, which was apparently offered at a discount by the hotel, which was then working to secure the eventual contract to host the conference. The spouse of one senior GSA official, who didn't work for the agency, told an event planner to organize a discounted adjoining room for her sister and niece during the conference.