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Agency’s Las Vegas Bash Spurs Cutback in Government Conferences

U.S. government agencies have canceled dozens of conferences and pared down other events following a scandal over a General Services Administration bash in Las Vegas.

The Defense, Justice and Health and Human Services departments are among those that have scrubbed or scaled back conferences from resort cities such as Orlando, Florida, to Washington bedroom communities like Leesburg, Virginia. The spending is under scrutiny amid efforts to cut the federal budget and the backlash against the GSA’s $823,000-plus event featuring a clown, mind reader and bicycle-building exercise.

The downsizing threatens to pinch hotels, convention centers and event planners that rely on the federal government’s $15 billion in annual travel spending, including conferences, said Roger Dow, chief executive officer of the U.S. Travel Association, a Washington-based trade group. Since April, when news of the GSA’s conference emerged, agencies have canceled at least tens of millions of dollars in events, he said.

The government shouldn’t “cancel legitimate meetings that need to take place just because a few people didn’t follow guidelines that were already in place,” Dow said in a telephone interview.

Kurt Krause, general manager of the National Conference Center in Leesburg, about 40 miles west of Washington, estimates he may lose $2.7 million this year in revenue from certain government customers.

‘No Spa’

Bookings by departments such as Veterans Affairs, Defense and Transportation slowed in April and stopped altogether in May, he said.

Krause, also chairman of the Loudoun County Chamber of Commerce, said he may have to fire some of his 300 employees. He said he spent $75,000 on newspaper and radio advertisements to speak out against new restrictions on agency travel, which he says affect modest venues as well as the tourism hot spots that attracted the GSA.

“There’s no resort, there’s no golf, there’s no spa.” Krause said of his conference center. “All we do is provide the environment for effective learning and training.”

Totals for the number and cost of canceled conferences across the federal government weren’t available. Of the 10 biggest agencies contacted by Bloomberg News, only two -- the GSA and the Health and Human Services Department -- provided figures.

Conference Cuts

The GSA alone scrapped 47 conferences under Acting Administrator Dan Tangherlini, who replaced Martha Johnson in April, spokesman Dan Cruz said. The cancellations helped lead to “more than $11 million in projected savings,” he said in an e- mail.

The health department hasn’t canceled any conferences since April, agency spokesman Bill Hall said in an e-mail. Instead, it has reviewed 75 planned conferences and anticipates saving $8.2 million this year and next by shortening events, decreasing the number of attendees and increasing video conferencing, according to Moira Mack, a spokeswoman for the Office of Management and Budget.

The health agency’s review followed a November 2011 executive order that led to $1.2 billion in travel and conference savings that were identified by agencies, Mack said in an e-mail. Of that, federal agencies already had found “over $600 million in reduced costs” through March 31.

Las Vegas Event

On April 2, the GSA’s inspector general released its report on the agency’s extravagant spending in Las Vegas in October 2010. At least a dozen employees and managers were fired or placed on leave, and the case has been referred to the Justice Department for potential criminal charges.

The OMB in May then directed agencies to cap conference spending at $500,000 and cut travel budgets by 30 percent. The rules are designed to produce hundreds of millions of dollars in savings, OMB Acting Director Jeff Zients wrote in a May blog post.

The scandal was “the catalyst” for many of the conference cutbacks now rippling across federal agencies, according to Larry Allen, president of Allen Federal Business Partners, a consulting company in McLean, Virginia.

“The needle on the pendulum never stops at halfway,” he said in a telephone interview. “There is never such a thing as an equal and proportional response to bad news.”

The Defense Department, the largest federal agency, has canceled or cut back on several conferences in recent months. One of them was the Air Force’s biggest information technology conference, which had been scheduled this week in Montgomery, Alabama.

‘Wasteful’ Appearance

The three-day event typically draws 5,000 to 6,000 people from government, industry and academia, according to Jason Bishop, a spokesman at Maxwell Air Force Base.

Driving the decision to cancel the tech conference were concerns over the travel costs for government employees, which totaled $1.4 million and may have appeared “wasteful” during a time of budget constraint, Bishop said in a telephone interview.

The Pentagon also ditched its Procurement Conference and Training Symposium, set for late May 2012 in Orlando. The invitation-only event was expected to draw 1,600 participants from the government and the private sectors, according to a notice on the department’s website.

The Defense Department hasn’t gathered figures on its canceled conferences, said Elizabeth Robbins, an agency spokeswoman.

‘Budget Constraints’

At the Justice Department, officials decided to nix a conference on sex-offender management set for this month in New Orleans, according to a notice on its website. It also canceled another on crime research scheduled for June 2013, according to agency spokeswoman Nanda Chitre.

The 2013 event was canceled “due to anticipated budget constraints,” Chitre said. She said she couldn’t provide the number of canceled events.

The Department of Veterans Affairs has “taken several actions to review training policies and procedures regarding conferences,” Victoria Dillon, an agency spokeswoman, said in an e-mail. She didn’t provide figures on canceled conferences.

The agency’s conference spending is also under scrutiny. Its inspector general is reviewing two conferences held last year at a Marriott International Inc. (MAR) resort near Walt Disney (DIS) World that cost a total of $5 million.

The events featured a $52,000 video spoof of the Oscar- winning movie “Patton.”

Training Expo

Agencies are placing limits on other conferences.

The Army is seeking a waiver to attend the annual meeting of the Association of the U.S. Army, a nonprofit advocacy organization based in Arlington, Virginia, though its presence will be smaller than normal, according to a July 23 memo signed by Lieutenant General William Troy.

The service will restrict participation to 10 organizations and commands for the three-day event beginning Oct. 22 in Washington, with about 38,000 attendees, Troy wrote.

The GSA’s signature conference, a three-day training expo held in May in San Antonio, Texas, “was a shadow of its former self,” said Allen, the consultant.

About 5,700 people attended, close to half the usual amount, he said. Unlike previous events, it lacked an opening reception, banners decorating the convention center and employees wearing agency T-shirts, he said.

While Allen agrees that there has been an overreaction to the GSA event, he said the new restrictions may be a good thing. The standard fare at government conferences over the past two decades has morphed from coffee and doughnuts to industry- sponsored open bars, he said.

“Maybe now we are going to get back to the basics,” he said.

To contact the reporter on this story: Brendan McGarry in Washington at bmcgarry2@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net

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