Senator CHILES. Our last witness is the Administrator of General Services. He is accompanied by Mr. Vincent Alto, the Acting Inspector General.

Yesterday, I said some nice things about you, Mr. Solomon because you had hired Mr. Alto and I felt that his record as a criminal prosecutor was most impressive and getting him to act as the Inspector General for a short period of time while the bill is being passed was a very wise decision."

After the hearing, I had some nice things to say about Mr. Alto because he had delivered a most cogent and forceful statement. He told us of a whole series of investigative and management exercises that he intended to carry out. He set a date for most of them, and said that most of them would be in place and he offered to come back and report on his success.

I don't think you can ask anyone for more than that. I've been in this town for 7 years, and in most of that time I've heard excuses and arguments of every kind. Long stories about how things aren't like they appear to be, and I've heard some more of that today. So, it was a real breath of fresh air to have Mr. Alto come in and say, "Yes, facts are facts, and things are bad and they don't have to be that way and I think I can fix them, and I'll come back and tell you about it Labor Day."

That's good. What is better, Mr. Solomon, is, I think, your statement today. I had intended to go on considerably about what needed to be done at GSA. It appears to me from your statement that you already know what needs to be done, Mr. Solomon and I have been asking witnesses to shorten their statements.

I'd like you to read every word of yours, but I would like to ask both of you to stand to be sworn before we proceed.

Mr. SOLOMON. Yes, sir.

[Whereupon, Joel W. Solomon and Vincent Alto, having been first duly sworn, were called as witnesses.]

TESTIMONY OF JOEL W. SOLOMON, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, ACCOMPANIED BY VINCENT ALTO, ACTING INSPECTOR GENERAL

Mr. SOLOMON. Mr. Chairman, Senator Nunn, I appreciate the opportunity to be down here.

I came to Washington and to GSA about 15 months ago and the only things I knew about it were that this civilian conglomerate of the U.S. Government, an agency of approximately 36,000 employees, had been accused of being involved in a number of questionable practices. It had the reputation of being over politicized, and of having political hirings and firings.

I was also aware that many people in the business community believed that GSA was operating in the 19th century when it came to construction and procurement activities.

Agency morale was at an all-time low. As you know, the form er Administrator, Mr. Eckerd, left because of a disagreement with the administration. An Acting Administrator has been appointed. After my appointment as Administrator, the Acting Administrator, Bob

Griffin, who is a 35-year employee of GSA, became the Deputy Administrator.

Shortly after I arrived at GSA allegations were brought to me by the Deputy Administrator of corruption and fraudulent activities. I was so concerned about these that I asked the Deputy Administrator to personally take charge of the investigation and see to it that all the wrongdoers were brought to justice.

As the months went by, it became apparent to Mr. Griffin and myself, that not only did corruption exist in both the Public Buildings Service and the Federal Supply Service, but also that sloppy practices and procedures were commonplace within the agency. These gave opportunity to fraudulent activity and questionable practices.

Mr. Griffin, in addition to his many other duties, vigorously pursued the investigation and strengthened agency procedures to guard against fraud and other improper practices.

As the investigation broadened and its magnitude became evident, we agreed that I, as Administrator, should take complete control of this investigation of corruption and wrongdoing within the agency. Bear in mind that I am not a law enforcement officer, nor was it my purpose to be one when I came to GSA at the request of the President of the United States.

But I felt an obligation to myself, to the taxpayers and to the agency to ferret out all corruption and finally clean up the agency, restore morale and drag it heel-skidding into the 20th century. It is my obligation and certainly my strong personal commitment to streamline GSA so that it can fulfill the mandate of the Hoover Commission. This is not an easy job working with the framework of the rules and regulations of the job.

I

In this regard, I brought into GSA, one of the Justice Department's top prosecutors in the United States, a man who has tried hundreds of cases, an expert in the criminal justice system, Mr. Vincent Alto. gave him complete and independent control of the investigation. I assured him of my complete support. I told him I wanted him to chase down every lead, regardless of where or how high it went. This, he is doing.

Further, I had hoped to wait for the President's Administrative Services Reorganization Project Report, and for the implementation of our reorganization plan to bring about some of the needed management and administrative changes which I think are necessary to streamline the agency.

Apparently, circumstances and events will not allow this to take place as rapidly as necessary to put GSA's house in order so that it can give the Federal Government the kind of administrative services it needs.

Mr. Chairman, it is very clear to me that we have significant problems within GSA. The last 15 months have been a long road for me with little chance to stop and rest. Time and time again I have raised an entire spectrum of issues ranging from our methods of constructing roofs in the Federal Government to delegation of authority within GSA, only to be assured that either there were no problems or that corrective action was being taken.

After several months passed I would recheck, make my own analysis and find, as I am sure you gentlemen have found, it was "business as usual" at GSA. Well I am sick and tired of "business as usual" at GSA and I am going to recommend personnel changes be made if this continues.

Even after this fraud came to light, even after the bright light of public exposure and after the Deputy Administrator and I had ordered all the top staff of GSA to intensify their efforts to combat fraud, our own investigations were turning up new instances of fraud. The same old fraudulent patterns were still continuing and I am just not going to put up with it anymore.

From now on I will insist that all employees follow all appropriate procedural checks and reviews. I intend to deal harshly with employees who are involved in corrupt practices and I will also take action against those who permit either fraud or inefficiency.

I have ordered the various commissioners to reexamine the practices and procedures of GSA. Rather than just sitting there waiting until problems develop, I have ordered them to determine right now whether we are operating as a business should, correctly and properly, and whether we are safe-guarding the taxpayers' dollars. If I do not get more favorable reports in this area, if our investigations don't stop bringing in case after case of malfeasance, then more changes will have to be made.

The task is not mine alone, it is the task of every GSA employee. The job that I have undertaken is not an easy one, but I have faith in people who work for our Government-and I still have enthusiasm about rebuilding this agency so it can carry out its proper role as the business manager of the Federal Government. There are many people at the agency who feel the same way.

Certainly there have been failures and mistakes-things not done which should have been done and things done which should not have been done. But of one thing I can be certain, I came to GSA not to make good the errors of the past but to make good the promises of the future.

It is perfectly appropriate for you, Mr. Chairman, to ask what are my plans for the future, what steps do I plan to take to correct the shortcomings that have been pointed out by my internal investigation, the various audit reports, the General Accounting Office and by these hearings.

In the area of fraud and fraud prevention, as you know, I have appointed a special counsel, Mr. Alto, and you are aware of his actions. I plan to take further steps to demonstrate how serious I am about bringing to an end corruptions and inefficiency.

Second, when somebody has the courage to speak up about what they believe is wrong, inefficient, costly, extravagant or unjust in an agency; when they go public or go to a congressional committee, it has long been the custom in government to shunt these people aside. They are given dead-end jobs, assigned to a "Siberian Outpost" or down-ranked.

I am from the business community and I am not interested in these type customs. If we are going to change the image of GSA, we must stop mistreating employees who are willing to expose things they believe are improper.

Therefore, I have decided to take corrective actions concerning Mr. Berube and I intend to assign him to a more meaningful position

in an area where he has a considerable amount of background and expertise.

As a matter of policy I will not and have not tolerated adverse action against any employees in GSA who are willing to speak up on matters which they believe are improper or inappropriate. I have advised staff of this on several occasions and will publish an agency directive about this.

I would like to make some remarks concerning the implementation of the A-109 program. It is of the utmost importance. I recall Senator Chiles' bringing it to my attention when I first came to GSA.

I was advised many times that it was being carried out and implemented by the agency, and was so assured on numerous occasions by agency officials. I will resolve this entire situation as far as A-109 is concerned by transferring responsibility for the implementation of this program. It's going to receive the highest priority in GSA. I will personally monitor this activity for the time being, until I am convinced that GSA is in full compliance.

Concerning other internal agency management changes, I would like to share with you some of the changes that I have made or plan to make in the near future.

One, I have been working on a review of how authority is delegated in the agency. In the near future, I will announce changes that will permit clear accountability and responsibility for specific actions.

Two, I have strengthened the responsibilities of the General Services Administration regional administrators and have made an effort to bring them into full management roles.

Three, I have approved, in agreement with the Public Buildings Service, the creation of a division that will conduct compliance inspections and program audits to insure that full value is received for each expenditure of public funds.

Four, audits and investigations once the Inspector General legislation is passed, I plan to work closely with the agency Inspector General to be certain that the audits and investigation functions are forcefully discharged.

Five, I have strengthened the Office of Policy, Planning and Evaluation and have brought in a new director, Mr. William Kelly, a distinguished long-time civil servant. Most recently, Mr. Kelly worked with the Administrative Services reorganization project and I want him to continue the planning and reorganization initiatives that were developed by the project. I plan to make that office and staff, which I have recently doubled, the focal point for agency management initiatives.

Six, the Office of Federal Procurement Policy has made the criticism that GSA is the only multibillion dollar procurement agency without a central acquisition policy and management staff. I intend to establish such a staff and have asked Mr. Kelly to prepare a plan to accomplish this.

Mr. Chairman, there are many other changes that are under review. Once these changes are made I think you will see and agree that they have been beneficial.

I should justly earn your contempt if I should talk one way here at the Senate and another way at GSA. I cannot answer for the mistakes of the past. But I can assure you that GSA has the capacity to correct itself. My own view is that GSA's role as so-called "ministerial

agency" has partially led to its downfall. It should be in the vanguard of efficiency and exercise its strength as the administrative arm of our civilian government.

Mr. Chairman, I look forward to the day when we can talk about GSA with a sense of pride and I suggest to you the time will soon be at hand.

Thank you, sir.

Senator CHILES. Mr. Solomon, I sincerely want to compliment you on a very, very comprehensive, and I think a very excellent statement. And I want to assure you that I look forward to that day too.

Mr. Alto is coming back in September, and I'd like to have you come back in September, too, and report to me what progress that you are making in this implementation.

Mr. SOLOMON. Mr Chairman, if you recall you don't have to wait until September for me to come and report to you my progress; I do it all the time to you, and we carry on a dialog

Senator CHILES. Yes, sir.

Mr. SOLOMON [continuing]. And I try my best to keep you informed, and this is my intention.

Senator CHILES. I appreciate your statement about whistle blowers in general, and Mr. Berube in particular. I hope that you will consider also coming to the rescue of Ms. Clark. It is a shame to have someone of her talents running a petty cash fund and I think that she was in the same situation that Mr. Berube was.

Mr. SOLOMON. I agree with you, sir.

Senator CHILES. I want you to specifically to look at the area on the strategic stock piles. It seems to me that this is an area that for too long the Director of GSA has sort of said, well, those are operations that take place down there. As we heard this morning, only up until now the decisions of whether to sell or not, and what price to sell was made many, many steps down the line.

Now, I know that if you have a director that has to say, yea or nay on everything that takes place in the General Services Administration, there wouldn't be much done, or it wouldn't really get to the Director. Soneone else would be signing his initials, or signing his name. But it seemes to me that this is an area where we are talking about millions of dollars. We are talking about strategic elements that the Government has bought and whether the Government should keep those or not, or if they are going to put those out on the market. They often effect antitrust matters, monopolistic practices, and it seems to me in areas of that magnitude a procedure has got to be set up so that in these major decisions, the Director, or you, yourself, are directly involved. If not, then I think we can continue to have situations in which there will be scandals, and you are going to be involved, or the Director is going to be involved because you are the captain of that ship when that takes place and so I would hope that you will directly involve yourself.

Mr. SOLOMON. Senator Chiles, may I make a comment to you to give you some assurance.

Two or three things are already in place at GSA. No. 1, you realize that this past week the Office of FPA has been recommended by the President to be removed into a new agency, but in that recommendation the stock piling functions stay with GSA. If the recom