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Government Audit of TSA Finds Wasted Money
Thomas Frank
April 20 2005

Employees with the agency in charge of safeguarding air travel spent more than $370,000 to lavishly decorate an office and then tried to cover up the cost by having an invoice rewritten, according to a government audit that blasts the agency for "wasteful" spending.

Officials at the Transportation Security Administration also bought $3,000 Subzero refrigerators and built a fitness center the size of a college basketball court, says the report, released Tuesday by the Homeland Security Department's inspector general. The costly perks were put in an office in suburban Washington, D.C., that opened two years ago as a TSA crisis management center, the audit says.

The report says TSA employees violated federal spending rules and in one case an ethics regulation. And TSA senior management "created a culture in which procurement procedures were abandoned, ethical norms slipped and fiscal responsibility was neglected," the report says.

TSA spokesman Mark Hatfield declined to identify the employee responsible for buying the office decorations, which included artwork and silk plants. Hatfield said that the employee has left the agency and that the matter is being reviewed by the Justice Department, which would not comment.

Other employees cited in the inspector general's report also have left TSA.

Hatfield acknowledged "a failing of the system," which he said has been corrected.

But Stephen McHale, who was TSA's deputy administrator until last summer, wrote a letter last month to TSA that branded the report as "deeply flawed." He disputed findings about "excessive" facilities and said the office in question is designed to handle a "huge surge" of workers during a transportation emergency.

McHale's letter was included in the inspector general's report.

The audit comes as TSA, which took over airport security after the Sept. 11 attacks, is about to lose its third top administrator in three years. TSA said this month that agency chief David Stone will step down in June after a replacement is named.

Tuesday's report focuses on a handful of employees involved in leasing a 110,000-square-foot office building where the TSA and Federal Air Marshals Service run daily security operations and manage emergencies.

An employee identified in the report only as TSA's "facility operations officer" struck a deal for office d├ęcor in June 2003 with a tool company whose owners he knew. The company had never done interior decorating but sold the TSA $253,000 in artwork, $31,000 in silk plants and $14,000 in office supplies, the report says. The company also charged $29,000 for consulting and a $65,000 markup.

But when the company submitted an invoice for "enhancements," the officer had it retracted and demanded a new invoice for "equipment and tools," the report says, "thus concealing the true nature of the charges."

Three months after the office opened in July 2003, the officer left the TSA and started a business with the tool company owners, the report says. The officer's new salary was $34,000 higher than what he made at TSA.