The 2007-09 recession was caused in part by a real estate bubble. Now it looks like the federal government is dealing with a bubble of its own.
Circumventing the normal system of checks and balances, the Interior Department’s Bureau of Indian Affairs purchased property and renewed leases without the proper authority and misspent an estimated $32.7 million, according to a report from the agency’s inspector general.
The General Services Administration is supposed to be in charge of all property for the federal government. But inspectors said the bureau never sought permission before leasing property that exceeded size regulations, including five leases that totaled nearly 100,000 square feet above what was allowed.
“Even though the GSA has not behaved like an angel in administering government office space matters, for better or worse the agency does serve as a repository of federal experience and advice that could keep taxpayers from being put to devilish expense for no good reason,” said Pete Sepp, executive vice president of the National Taxpayers Union. “BIA violated those guidelines, and now those same taxpayers could be facing some serious liabilities.”
For ignoring federal regulations and buying millions of dollars in space, the Bureau of Indian Affairs wins this week’s Golden Hammer, a distinction given by The Washington Times to examples of fiscal waste, fraud and abuse.
Responding to the probe, BIA spokeswoman Nedra Darling said that the Department of the Interior’s Office of Indian Affairs “is addressing the recommendations of the [inspector general] and is aggressively moving forward with remedying the shortfalls in reporting and compliance.”
Interior investigators looked into the issue after GSA officials discovered that the bureau wasn’t following established procedures.
In a report released Monday, inspectors said they found “leases extended without GSA approval; leases exceeding GSA square-footage limits; leases established by individuals without qualifications to do so; and contracting officers who did not follow guidelines.”
The inspector general looked at 14 leases the bureau had signed and found that its officials never received GSA permission before making the agreements. Investigators cited the case of a Montana Bureau of Indian Affairs official who signed leases without even getting clearance from agency leaders.
With three of the leases, bureau officials said, they had GSA approval but weren’t able to locate any proof of it when investigators asked.
The GSA sets a limit that no lease should be for a building larger than 19,999 square feet and that multimillion-dollar leases must be approved by Congress. Investigators said the bureau violated both rules and called into question $32.7 million that the bureau spent on property, including a 140,000-square-foot, $8.5 million lease on a facility in Albuquerque, N.M.
“GSA’s delegation of authority grants federal agencies permission to lease real property only after GSA has approved written requests that include the square footage to be leased,” the inspector general said.
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Inspectors said the bureau has submitted a “corrective action plan” to the GSA, but did not specify what actions the agency planned to take.
Part of the problem, the inspector general said, is that Bureau of Indian Affairs policies are out of date. The agency’s guidance tells employees to fill out paper forms on property purchases, even though GSA record-keeping has gone almost completely digital.
Congress’ chief watchdog arm, the Government Accountability Office, estimated last year that the government is wasting $1.7 billion a year on upkeep for 100,000 empty or underused buildings.
The Bureau of Indian Affairs’ purchases did not help the situation, Mr. Sepp said.
“Overall, the federal government remains a careless landlord and real estate investor. We are only barely beginning to see a concerted effort to identify and dispose of the inventory of surplus land and buildings under Washington’s control,” he said. “Billions are being left on the table by failing to sell these unneeded and unused assets.”
The GAO’s report in May brought similar condemnation from lawmakers.
“We have vacant buildings like this eating taxpayer dollars and bureaucrats unable to make a decision,” said Rep. John L. Mica, Florida Republican and chairman of the House Oversight and Government Reform subcommittee on government operations. “At a time in which the government is struggling to try to make ends meet and our deficits are climbing, I think it’s appropriate that we look at the multibillion-dollar waste and practices that do not adequately address the problem of vacant properties and underutilized assets,” he said.
• Phillip Swarts can be reached at pswarts@washingtontimes.com.
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