Stalled Investigation

Special Counsel Vincent Alto predicted last June that his investigation of fraud, theft and mismanagement in the General Services Administration would result in scores of indictments in about eight weeks. But eight weeks passed, and the score was still zero. At the end of August, GSA investigators said that a packet of indictments would be handed down within a fortnight. A fortnight passed, but there still were no indictments. Last week Deputy Attorney General Benjamin Civiletti indicated to a Senate subcommittee on federal spending practices that the GSA probe had been stalled, and indictments could be delayed for another eight weeks.

Part of the problem is the stone wall thrown up by many oldtimers at the agency, which provides $5 billion a year worth of office space, supplies and housekeeping services to federal bureaucrats. The GSA veterans have survived past attempts at reform, and many of them are determined to tough out the current investigations. Said Alto: "You wouldn't believe the resistance we are meeting." So far, despite President Carter's instructions that he net some "bigger fish," Alto has been able to build cases against only small-fry officials and contractors.

Alto told the subcommittee that the agency has been relying on a staff of only 74 investigators to police its 35,000 employees. The majority of them have no experience or training in fraud investigation. Much of their time is spent on discrimination complaints. Even so, GSA investigators are armed with handguns, of dubious use when dealing with white-collar crime. Said Subcommittee Chairman Lawton Chiles: "They should be required to carry a pencil and a calculator so they can tote up."

The current probe has been further slowed by bickering among the federal investigators. GSA gumshoes grumble that the FBI is out to grab the glory with easy cases, while FBI agents grouse that leads provided by the GSA are not worth following up. In the meantime, grand juries in Baltimore and Washington are hearing evidence of GSA fraud, while cases pursued by Alto are nearing the grand jury stage in Dallas, Houston, New Orleans and Boston.

Adding to the confusion are differing reports from investigators on the extent of corruption at the GSA. Alto has described it as potentially "the biggest money scandal in the history of the Federal Government." But Civiletti told Chiles' subcommittee last week, "We do not know from the evidence gathered to date just how far the wrongdoing extends or whether at any level corruption is pervasive." Still, a report to the subcommittee from Comptroller General Elmer Staats estimated that fraudulent practices by bureaucrats in the GSA and other agencies is costing the Government anywhere from $2.5 billion to $25 billion a year. Complained Staats: "The Justice Department has not done enough."

Last week Civiletti took steps to end the bureaucratic infighting and speed up the GSA investigation. He formed a strike force of investigators from the GSA, FBI, Internal Revenue Service, Postal Service, and Securities and Exchange Commission. In overall charge he put Assistant Attorney General Philip Heymann, head of the Justice Department's Criminal Division. Said Civiletti of the GSA probe: "We're treating it as a very serious matter, even though progress has been slower than we all would like." -

This file is automatically generated by a robot program, so viewer discretion is required.