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Ex-GSA head apologizes for $823,000 Las Vegas spending spree

Martha Johnson tells lawmakers the General Services Administration misconduct undermined her reform efforts and "belittled federal workers." NBC News' Kelly O'Donnell reports.

Updated at 4:58 p.m. ET: Martha Johnson, who resigned this month as head of the General Services Administration, apologized Monday for a Las Vegas conference in 2010 that cost $823,000 and led to the ouster of the agency's top leaders.

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Johnson quit; two top officials — Bob Peck, head of the agency's public building department, and Stephen Leeds, Johnson's senior counselor — were fired; and five other officials were put on administrative leave after GSA Inspector General Brian Miller reported that lavish spending was an accepted part of the agency's culture. He highlighted the 2010 conference, which included private parties in luxury suites paid for with taxpayer funds.

Miller told lawmakers Monday that investigations into other possible misconduct were under way, "including bribes, including possible kickbacks." He didn't elaborate.

The GSA is essentially the federal government's office manager, overseeing government facilities, office space and supplies. Part of its mandate is to oversee programs to hold down the cost of running the government.

"What we had was a case of the rules' being in place. People were just ignoring them," Dan Tangherlini, the agency's acting director, told the House Oversight and Government Reform Committee, which held the first of what's expected to be at least four congressional hearings into the report Monday.

The official at the center of the scandal, Jeffrey Neely, repeatedly invoked his Fifth Amendment right to remain silent.

In a memo included in the inspector general's report, Neely — who hosted a $2,700 party at the conference — allegedly wrote, "I know I'm bad ... but why not enjoy it while we can? It ain't gonna last forever."

Rep. Darrell Issa, R-Calif., chairman of the committee, said the panel was intent on getting "answers to questions that should have been asked long, long, long ago."

Read the full inspector general's report (.pdf)
GSA under fire for video that makes light of excess government spending

Johnson, who resigned April 2, testified that when she assumed the agency's leadership in February 2010, she learned that its Western region training conference had over time "evolved into a raucous, extravagant, arrogant, self-congratulatory event that ultimately belittled federal workers and would stain the very work that other committed staff and I were preparing to do."

"Leaders apparently competed to show their people how much entertainment they could provide, rather than how much performance capability they could build," she said. "The expensive planning for that conference was well under way when I entered GSA, and I was unaware of the scope."

Johnson said she stepped aside to "allow a new team to lead GSA as it rebuilds itself," saying she was "extremely aggrieved by the gall of a handful of people to misuse federal tax dollars, twist contracting rules and defile the great name of the General Services Administration."

"I personally apologize to the American people for the entire situation," she said. "As the head of the agency, I am responsible. ... I will mourn for the rest of my life the loss of my appointment and its role in leading a vital and important part of the government of the United States of America."

Miller, the inspector general, testified that while it good news was "very difficult to find among all the bad news and repugnant conduct," the uproar at least demonstrated that "the oversight system worked."

But "more needs to be done to establish early warning systems," he said, warning that the misconduct at the 2010 conference "could only occur in an environment where the best lack all conviction while the worst skirt the rules."

Among the evidence House investigators have accumulated is this rap video made at the conference, in which GSA employees joke about their perks:

This video, titled "Federal Worker, American Idle," won an award at a 2010 conference held by the General Services Administration.

David Foley, who was placed on leave as deputy head of the public buildings division, apologized to a member of the committee, Eleanor Holmes Norton, the District of Columbia's delegate to Congress, for a joke about her in the video.

Norton reassured Foley that she hadn't taken the joke personally.

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