$16 muffins? The IRS and more government excess

(NBC NEWS) -- An Internal Revenue Service conference in California in 2010 has achieved quick notoriety for its "happiness expert" and its goofy videos spoofing "Gilligan's Island" and "Star Trek," complete with Planet Notax.

But the IRS, which had enough problems on its hands before details of the conference surfaced this week, is far from the first government agency to be taken to task for questionable spending at conferences. At least one taxpayer-rescued company suffered a similar fate.

Here are some of the more extreme examples from recent years.

Irony alert

The General Services Administration, a little-known agency whose jobs include managing costs for the federal government, spent $822,000 to fly bureaucrats to Las Vegas for a conference at a luxurious spa and casino in 2010.

Extras at the conference included a clown, a bicycle-building workshop, shrimp at $4 a pop, an artisanal cheese display and a mind reader. Any decent psychic could have foretold the coming scandal.

"I know I'm bad," Jeffrey Neely, an official who helped plan the trip and hosted a $2,700 party himself, wrote in a memo uncovered by the agency's inspector general. "But why not enjoy it while we can? It ain't gonna last forever."

It didn't. GSA administrator Martha Johnson resigned and ultimately apologized to Congress, and at least seven GSA officials who worked under her were fired or placed on administrative leave.

About that bailout money

In a case of spectacularly bad timing, the insurance company American International Group spent $440,000 on a California retreat days after it accepted an $85 billion federal bailout during the 2008 financial crisis.

On the tab: $23,000 of spa treatments for AIG executives - no doubt holding a lot of tension in the shoulders after their company nearly tanked the global economy - plus banquets and golf outings.

The revelation drew an outraged response from then-Sen. Barack Obama, who declared at a presidential debate that "those executives should be fired." And in what became known as the AIG Effect, companies nationwide cut back on hotel spending.

CEO Edward Liddy went before Congress and said he had urged AIG executives to return bonuses totaling $165 million. Rep. Gary Ackerman, D-N.Y., encouraged a banquet of a different kind: "Eat it now. Take it out of your profits down the road."

The inspector general meets Gen. Patton

The Veterans Administration drew outrage for spending more than $6 million to send employees to two human-resources conferences in Orlando, Fla., in the summer of 2011.

An inspector general's report unearthed hundreds of thousands of dollars in questionable spending on catering, audiovisual services, promotional items, photographers - and pocket organizers, those indispensable tools of the H.R. pro.

But the gem was the $50,000 that the VA paid a production company for a video parody of the opening scene of "Patton," with a uniformed actor standing in front of an enormous American flag and barking about the high standards of the agency.

That's a pricey meatball

What does a $4 Swedish meatball taste like? Ask employees of the Justice Department, which spent $7 million to host or send its employees to 10 conferences between 2004 and 2006.

An internal audit report read more like a menu for Chez DOJ: $13,000 for cookies and brownies and $60,000 for a networking session that featured butterfly shrimp and coconut-lobster skewers.

A Justice Department spokesman told The Associated Press that the department had found "several ways we could make future conferences better and more efficient." They might start with the Swedish meatballs, which go for a fraction of the cost at Ikea.

Lesson learned

Four years after they reported on the $4 Swedish meatball, Justice Department auditors checked in on those efforts to hold down costs at conferences. What they found was not exactly thrifty. Behold: The $16 muffin.

The 2011 report examined 10 conferences staged by the Justice Department and found that food and drink spending was particularly extravagant.

Attendees snacked on $7 Beef Wellington hors d'oeuvres and coffee at $1.03 an ounce. At that price, a Starbucks venti drip would cost more than $20. People who went to one conference got Cracker Jack, popcorn and candy bars that cost $32 per person, the report said.

The DOJ was battered for the muffin story, but it turned out to be half-baked. The department amended its report to say that additional documents and discussions with the hotel that hosted the conference had shown that the muffins did not cost $16. But the revised report said that the warning about overspending was unchanged.

"Government conference expenditures must be managed carefully, and the department can do more to ensure that taxpayer dollars are spent wisely and accounted for properly," it noted, in prose presumably drier than the muffins.


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