Departing Public Building Service chief Robert A. Peck is no stranger to scandals at the General Services Administration (GSA) where he lost his job earlier this week following revelations by the Washington Post of more than $820,000 in wasteful spending on a Las Vegas conference.
Martha N. Johnson, who was appointed by President Obama to oversee the federal government's housekeeping agency, resigned shortly before GSA Inspector General Brian Miller made public a report on the exorbitantly expensive conference.
Peck and Stephen Leeds, described by the Post as Johnson's "top advisor," were forced out and four lower level GSA executives were placed on administrative leave.
"The leadership collapse came hours before GSA Inspector General Brian D. Miller released a scathing report on the $823,000 training conference, held for 300 West Coast employees at the M Resort and Casino, an opulent hotel in Henderson, Nev., just south of Las Vegas. From $130,000 in travel expenses for six scouting trips to a $2,000 party in Peck’s loft suite, event planners violated federal limits on conference spending," the Post reported.
The Post noted that Peck was serving for the second time at GSA but didn't describe the reasons for his departure the first time around, which also involved a scandal in which tax dollars appeared to have been wasted.
In Peck's first go-round at GSA, controversy was sparked when it was learned that excessively high rent was being paid by the FCC to the owner of a building who also happened to be a Democratic donor. Peck was the official who made the deal possible.
Tennessee developer Franklin Haney was a longtime supporter of then-Vice President Al Gore. Following congressional complaints, the Justice Department investigated allegations that Haney made large contributions to the 1996 Clinton-Gore re-election campaign in return for which he received the lucrative lease deal on the facility occupied by the FCC.
Peck was recommended for the Public Buildings position by Peter Knight, who ran the 96 Clinton-Gore campaign. A 1998 Business Week story described the sequence of events in the Peck-Knight relationship that led to GSA:
"Knight's involvement in the Portals project dates back to the summer of 1994, when he recommended old friend Robert A. Peck for a job as deputy to then-FCC Chairman Reed E. Hundt. A year later, when Haney, one of Knight's law-firm clients, was deciding whether to help bail out the floundering Portals project, Knight turned to Peck for help in arranging meetings for Haney.
"After a year at the FCC, Peck told Knight he wanted a new job. Knight recommended him to the General Services Administration, where he now oversees all government leases, including the FCC's. Peck says in both cases his credentials as a real estate lawyer and legislative aide won him the government jobs, not Knight's assistance."
The key problem with the deal was a provision that required the government to begin making lease payments to Haney's development nearly a year before the FCC moved into the facility at The Portals. That move had been the subject of recurring controversy between the FCC and Congress for years. The FCC didn't want to move to the facility because it was in an under-developed section of town.
Haney paid Knight $1 million after the Portals lease deal was completed, but both men claimed the payment covered a variety of services rendered, according to Business Week.
A congressional investigation of the deal eventually resulted in Haney being cited for contempt for refusing to turn over documents requested by the House Commerce Committee's subcommittee on investigations. The subcommittee said in its report that "despite more than five months of repeated attempts to obtain Mr. Haney's cooperation, Mr. Haney refused to provide the records voluntarily, forcing the Subcommittee on Oversight and Investigations to authorize the issuance of subpoenas duces tecum to Mr. Haney and three related companies under his control."
The subcommittee reported that Haney "did not dispute that he had possession or control over all of the subpoenaed documents, but he nonetheless failed to produce any responsive documents on the subpoena return date--even after his meritless objections concerning pertinency, attorney-client privilege, and confidentiality as to some of the documents were heard and overruled by the Subcommittee, in the presence of Mr. Haney's attorney, at an open Subcommittee meeting on June 17, 1998."
Shortly thereafter, Haney changed course and turned over the documents sought by the panel. You can read the report here.
Ultimately, the Justice Department pursued no actions against Haney, Knight or Peck in connection with the scandal, even though career GSA officials reportedly had serious reservations about the revised lease and Peck's role in arranging it.
For more from Business Week on Peck's first go-round at GSA, go here.