-By Vince Johnson
The U.S. Senate operates four restaurants with dining rooms in the Capitol Building and the Dirksen, Russell and Hart Senate Office buildings. The U.S. Senate Restaurants have been in business over 44 years and have been profitable for only 7 of them. According to the 2007 Financial Audit issued by the GAO (Government Accounting Office) these 4 restaurants operated at a $1,340,637 loss in fiscal 2007.
Some items from the Fiscal 2007 audit merit comment:
Gross Income $6,065,198 (After Cost of Food & Beverages @ 39.5% Sales)
Total Operating Expense: $7,405,835
Total Losses for Fiscal 2007 $1,340,637
Operating expense included the following:
Personnel and benefits $6,808,654 (Exceeds Gross Income by $743,456)
Supplies and materials $561,001
Miscellaneous $36,180
Total Operating Expense $7,405,835
2007 Assets included $224,108 for china, glassware, silverware, and tableware.
2007 Employee benefits came to $1,893,468
2007 Cost of Food & Beverages came to $3,477,705
Certain major business expenses appear nowhere in the audit. These include occupancy. No rent. No lease. No mortgage. No property taxes. Not ever!
Electricity, heat, telephone, are paid by outside sources. These expenses are charged to Capitol & Senate Building overhead. New menus are printed daily at no charge. These are provided by the Government Printing Office.
It does not have to pay insurance on building and fixtures. This is also charged to Capitol & Senate Building overhead.
Trash removal and sewer service is free. No water bill. No charge for building repairs or maintenance. Security services are state of the art and provided at no charge.
How did the U.S. Senate bail themselves out of this mess? They voted to privatize the entire operation! Each of the Senate restaurants will be managed by the same contractor that has been operating all of the House restaurants since the 1980’s. Guess what? Many Senators and their staff dine in the House restaurants because the food and service is far superior!
An article in the June 9, 2008 Washington Post contained this paragraph: “I know what happens with privatization. Workers lose jobs, and the next generation of workers make less in wages. These are some of the lowest-paid workers in our country, and I want to help them,” Sen. Sherrod Brown (D-Ohio), a staunch labor union ally, said recently. (The wages of the approximately 100 Senate food service workers average $37,000 annually.)
Sen. Dianne Feinstein (D-Calif.), chairman of the Rules and Administrations Committee, which oversees the operation of the Senate, found a way to get a bill to privatize the restaurants passed and she deserves credit for doing so. She was quoted by the Washington Post as saying, “It’s clearly not the sort of thing I ran for the Senate to do, but somebody had to do it.” By one estimate, Restaurant Associates, the foodservice contractor would turn a large profit within three years and would begin paying about $800,000 annually in commissions to the Senate. Yes indeed! Somebody had to do it!
There is an oddity here. Congress wants to become a managing partner with the big three to help get things back on track. But when a restaurant system managed by the Senate becomes a big time loser, they discover that the best way to fix it is to privatize the entire operation!
If you question any of the numbers or statements used in this issue please contact:
Dr. Michael J. Riley, Chair, Audit Committee, Architect of the Capitol
U.S. Government Accountability Office
Washington, D.C. 20548-001
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Vince Johnson welcomes comments. Please send them to,Vince Johnson(vjadtrak@wvi.com)
See Vince in the new book Americans on Politics. Policy, and Pop-Culture.
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