Watchdog: Follow the Money

UPDATED: Top Veterans Affairs official takes the Fifth, refuses to explain reckless conference spending

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John Sepulveda, the top Department of Veterans Affairs official implicated in planning a pair of extravagant training conferences in 2011, invoked his constitutional right against self-incrimination and refused to answer questions during a congressional hearing Wednesday.

Sepulveda, former assistant secretary for human resources and administration at VA, repeatedly invoked the constitutional protection during the hearing by the House Committee on Oversight and Government Reform.

Committee chairman Rep. Darrell Issa, R-Calif., fired off a series of questions about Sepulveda's role in planning the conferences and the circumstances of his departure from the agency.

“On the advice of my counsel, I respectfully decline to answer based on my Fifth Amendment constitutional privilege,” Sepulveda repeatedly responded.

Sepulveda did so even when asked routine questions, including whether he is still employed at VA and whether he is drawing a federal pension.

The committee spent more than a year investigating the conferences held in July and August 2011 in Orlando, which cost taxpayers about $6.1 million.

The VA inspector general documented as much as $762,000 in wasteful spending and other abuses by agency personnel involved in planning the conferences in a report issued in October 2012.

Sepulveda, as the top official involved in the planning, resigned the day before the IG report was released.

Mismanagement, unethical behavior and irresponsible leadership led to massive wasteful spending on the conferences, according to an investigative report released by the committee in conjunction with the hearing.

In what amounted to a “spending binge,” conference planners squandered hundreds of thousands of dollars while treating themselves to pampering at taxpayers’ expense.

The committee also released a new video produced for the conferences, which shows workers performing karaoke to the tune of “We are Family” with short snippets of VA officials making brief statements about how happy they are to be attending. No cost estimate for the new video is available, which can be viewed here.

Wasteful spending at the conferences came to be associated with a $50,000 video parody of the movie "Patton."

“Emails obtained by the Committee show that the Department’s conference planners unapologetically and recklessly wasted taxpayer dollars,” the oversight report states.

Planning of the conferences was so poorly done that VA still cannot produce a firm accounting of the costs, according to the committee report.

Among the other findings from the committee:

» VA conference planners made scouting visits to Dallas, Nashville and Orlando, which they treated more as vacations than work trips. They improperly accepted gifts from hotels under consideration as conference sites, including meals, spa treatments, show tickets and limousine and helicopter rides. Some also took advantage of massages, manicures and pedicures at the hotel spa during the conferences.

» The agency rewarded those who helped plan the wasteful conferences with more than $43,000 in cash bonuses and time off.

» Some senior VA officials became concerned about the rapidly increasing cost of the conferences months before they were held, but they made no effort to curb spending.

» When word of the extravagance of the conferences began to leak out in the press, VA officials attempted to hide photos taken at extracurricular activities.

» When some conference planners raised concerns about the source of funding, they were told “they don’t have a thing to worry about.”

» At one point, a conference planner contacted the Washington Redskins to find out if the team’s cheerleaders would make an appearance at a kick-off event to raise interest among employees. The pre-conference pep rallies were considered by Sepulveda to be his “signature” event, according to the committee report.

“The Committee’s investigation of the Orlando conferences revealed a culture of willful waste at the Department and widespread disregard for how taxpayer dollars are spent,” the oversight report says. “Although it is necessary for federal agencies to train employees in some cases, extravagant spending for that purpose in an era of huge budget deficits and an ever-increasing national debt is unacceptable.”

The IG concluded Sepulveda made a false statement when he claimed he had not seen the "Patton" videos prior to the July 2011 conference. A referral was made to the Department of Justice, which declined prosecution.

Sepulveda’s lawyer, Preston Burton, released a statement Wednesday afternoon blasting the committee’s hearing as part of a “plainly partisan agenda that serves no legitimate purpose” being advanced by Republicans who control the majority.

“Although we are confident that any objective process would again reject an effort by the IG or the Committee to engineer a criminal investigation, unfortunately the Majority’s tactics leave private citizens ensnared in its partisan process with little choice but to assert their constitutional right to decline to answer the Committee’s questions,” Burton said.

Burton added he is not aware of any ongoing investigation that could result in criminal charges.

Sepulveda denied seeing the two "Patton" videos when he was questioned by IG investigators in August 2012. On Sept. 25, 2012, a week before the final report was issued, he signed a sworn statement acknowledging he had seen the videos, but that he had forgotten about it when questioned.

Sepulveda's refusal to make any statement or answer any questions from Issa is a contrast to Lois Lerner, who testified in front of the oversight committee in May about the targeting of Tea Party and other conservative groups seeking tax-exempt status. Lerner, a former director of exempt organizations at the Internal Revenue Service official, made an opening statement denying wrongdoing, then invoked her Fifth Amendment protections and declined to answer questions. Republicans on the committee passed a resolution in June declaring Lerner waived her right when she made her opening statement. All Democrats opposed the resolution.

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