INTRODUCTION OF THE SECURITIES AND EXCHANGE COMMISSION REAL ESTATE LEASING AUTHORITY REVOCATION ACT

INTRODUCTION OF THE SECURITIES AND EXCHANGE COMMISSION REAL ESTATE LEASING AUTHORITY REVOCATION ACT

Congressional Record, Volume 171 Issue 1 (Friday, January 3, 2025) [Congressional Record Volume 171, Number 1 (Friday, January 3, 2025)] [Extensions of Remarks] [Page E1] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] INTRODUCTION OF THE SECURITIES AND EXCHANGE COMMISSION REAL ESTATE LEASING AUTHORITY REVOCATION ACT ______ HON. ELEANOR HOLMES NORTON of the district of columbia in the house of representatives Friday, January 3, 2025 Ms. NORTON. Mr. Speaker, today, I introduce the Securities and Exchange Commission Real Estate Leasing Authority Revocation Act, which would revoke the independent real estate leasing authority of the Securities and Exchange Commission (SEC) and direct the Government Accountability Office to update its 2016 report on independent real estate leasing authority in the federal government. The House passed this bill in the 117th and 118th Congresses. While a number of federal agencies have independent real estate leasing authority, the SEC has a history of egregious real estate practices. In 2005, the SEC disclosed that it had unbudgeted costs of approximately $48 million for the construction of its headquarters near Union Station. In 2007, after moving into its headquarters, the SEC shuffled its employees to different office space at a cost of over $3 million without any cost-benefit analysis or justifiable explanation. In 2010, the SEC conducted a deeply flawed analysis to justify the need to lease 900,000 square feet and to commit over $500 million over 10 years, overestimating its space needs by over 300 percent. In addition, the SEC failed to provide complete and accurate information and prepared a faulty and backdated justification and approval after it had already signed the lease. In August 2016, the General Services Administration (GSA) and the SEC entered into an occupancy agreement to authorize GSA to secure a new 15-year lease. In December 2016, GSA, with the approval of the SEC, submitted a prospectus to Congress for approximately 1.3 million square feet, which Congress approved in 2018. By 2019, GSA had received final bids, resolved all protests and even selected a final bidder. A month later, the SEC canceled the occupancy agreement, citing concerns about the value of the purchase option, which the SEC refused to document to Congress. The SEC effectively vetoed the entire three-year procurement process despite not having the authority or funding to exercise the purchase option without GSA's involvement. Finally, after much back and forth between the two agencies, GSA entered into a lease for a new SEC headquarters in September 2021, which GSA terminated in October 2024. While the SEC has said it will continue to have GSA do its leasing in the future, the SEC's history of egregious leasing conduct, squandering hundreds of millions of dollars, makes this bill necessary. The SEC's conduct risks undermining the reputation of GSA and the federal government among developers and building owners who participate in federal lease procurements. The threat of uncertainty ultimately drives up the cost of all GSA real estate procurements. It is time for Congress to return the SEC's leasing authority to GSA, the federal government's civilian real estate arm. As the SEC has demonstrated over three decades, it is incredibly inefficient, wasteful and redundant to have the SEC do real estate procurements when GSA exists for that very reason. Like other federal agencies, the SEC will continue to have input in the GSA's real estate decision-making process, but GSA would have the ultimate authority. I urge my colleagues to support this bill. ____________________