Monday, April 23, 2012

The real reason for the GSA scandal

Last week, we heard a rare moment of frankness in a Senate hearing. While the Senators all expressed shock, shock that GSA would waste federal money on an over-the-top shindig out in Las Vegas. Then the GSA Inspector gave an answer to a question by Senator Barbara Boxer that exposed the whole dang problem.
Inspector General Brian Miller offered an explanation.

Bank robber “Willie Sutton was asked, ‘Why do you rob banks?’ ” Miller told the public works panel. “He said that’s where the money is. Part of the reason there is a lot of crime, fraud, waste and abuse at GSA is because a lot of money flows through GSA.”

Miller’s office is investigating allegations of bribery and kickbacks within the Pacific Rim region. But the problems may be more systemic across the GSA, Miller said.

“Every time we turn over a proverbial stone, we find 50 more, and we find things crawling out from under them,” Miller said. “I don’t know what we’re going to find but it hasn’t been pretty.”
Well, isn't that the whole problem? Too much money flows through the federal government and whenever there is that much money, some of it is going to be wasted. Maybe this sort of blatant abuse isn't inevitable, but waste is natural when there is no incentive for employees to be frugal with all that moolah. In a private business they might have to account for the spending and would maybe be able to receive bonuses for ho they saved money.

Pundits being what they are, they immediately seek to figure out if there will be some political fallout for President Obama. I don't think people will blame him for the scandal. Everyone knows that he had nothing personally to do with the way these guys spent the money.

However, the real problem for Obama is that this whole story illuminates the problems with government. If such waste happens when $65 billions is going through the agency that is supposed to be all about careful management of the government's money, just imagine what happens throughout the whole government. It is why all the waste that we've heard about from the stimulus package was so predictable (Sorry - I had brain freeze and had earlier written unexpected). This story is inevitable with the vision of government that the Democrats have with more and more power and money flowing to the federal government.

And there have been a lot more corruption scandals
from GSA than just this one conference in Las Vegas.
The Newton-White case [a government contractor took GSA credit cards to buy gas and re-sell it to customers for cash] was just one of 64 prosecutions between October 2010 and September 2011 of people who bilked the GSA by inflating costs, or just flat out stole from it.

In October, Miller's office and the Justice Department wrapped up a five-year investigation that found seven GSA employees had conspired to award government contracts in return for kickbacks....

The largest cases involve inflated information technology contracts that end up costing the government tens of millions of dollars.

Through convictions and settlements, the inspector general's office clawed back $376 million in the last fiscal year, but Miller said it was impossible to know for sure how much money the GSA wasted or lost each year.
With all that spending, of course there are going to be more scandals. That's where the money is and Obama represents opening up more such opportunities for the Willie Suttons in government. If the Inspector General thinks that the explanation for the scandal is the fact that there is so much money sloshing around, why would anything change