Nation: Graveyard Tales

“The General Services Administration has been plagued by 25 years of bad habits, and we’re undoing them.” So declares Vincent Alto, the GSA’s special counsel, who since May has been investigating charges of theft, kickbacks and mismanagement by agency employees that are costing the Government at least $166 million a year. Alto’s probe is expected to produce within a few weeks indictments against scores of GSA employees and Government suppliers. Last week the investigation won the strong backing of Jimmy Carter and led to the firing of Robert Griffin, 61, the agency’s No. 2 executive.

The GSA, which spends $5 billion a year to provide Government workers with offices, supplies and motor vehicles, has been a haven for political hacks since its creation 29 years ago. Florida Democrat Lawton Chiles, whose Senate subcommittee on federal spending practices has also been investigating the agency, calls it “a graveyard for job seekers with political connections that Administrations couldn’t put somewhere else.”

The investigations of the GSA began to heat up when a Washington-area contractor, Robert Lowry, agreed to testify about fraud in return for immunity from prosecution. He told Chiles’ subcommittee last month how GSA building managers authorized payments for millions of dollars of maintenance work that was never performed in exchange for cash payoffs, free vacations and contractor supplied prostitutes. Lowry told investigators of a contract for painting 40 miles of pipes inside the walls of a Veterans Administration building in Washington. Said he: “To find the pipes, you would have to take the plaster walls down, so I don’t know how they got painted.”

Subsequently, GSA investigators estimated that the agency annually loses $66 million because of corruption and an additional $100 million through mismanagement, negligence and waste. Examples:

> A New Jersey office-furniture company has sold the GSA many million dollars worth of desks, filing cabinets and metal tables. Investigators suspect that Government equipment specifications were designed expressly for the manufacturer.

> A $300,000 remodeling job in Boston’s John F. Kennedy Federal Building included $40,000 for a teak-paneled HEW office. According to Howard Davia, the GSA’s director of audits, “In essence, all the files and vouchers and statements of work done were phony.”

> A payment voucher showed that a contractor applied two coats of paint to 63,400 sq. ft. of stairwells in the GSA’s Washington headquarters, even though the area involved measured only 35,000 sq. ft. at best and was never actually painted. Six weeks later the contractor billed the GSA for applying 257,000 sq. ft. of plaster to the same stairwells. Reports TIME Correspondent Gregory Wierzynski: “The staircase still looks grimy.”

Investigators found that GSA’s self-service stores, where federal workers obtain office supplies, were robbed of goods worth millions of dollars. One employee walked away with $262,000 worth of Polaroid film over a two-week period. Some store managers placed bogus orders with suppliers, paid them for the undelivered goods and pocketed kickbacks of 40% or more.

Since becoming head of the agency 15 months ago, Administrator Jay Solomon, 56, a former land developer, has tightened supervision and procedures. But he says that further efforts at reform were hampered because many employees assumed that, as had been the case for years, real administrative power lay with Solomon’s deputy, Robert Griffin, a close friend of House Speaker Tip O’Neill’s.

When Solomon briefed Carter on the burgeoning investigation last week, aides reported that the President was “astounded.” In a memo, Carter promised Solomon: “I will back you fully in whatever procedural, personnel, organizational and other actions are needed.” Carter agreed to let Solomon fire Griffin, despite the objections of O’Neill, who called the dismissal “one of the worst things I have ever seen in personnel matters.” Solomon said the firing was “not related to any allegations of impropriety or wrongdoing” on Griffin’s part—only a move to tighten Solomon’s control over the agency. ∎