The U.S. of e
Pssst. Want to buy a donkey?
No? How about a helicopter, 3-carat diamond, pickup truck, four-bedroom house in Burbank, Lamborghini, Texas convenience store or Coast Guard cutter?
All can be had for the right bid on the Internet, but not on EBay or Yahoo Auctions. These items and thousands more have been put up for electronic auction by the U.S. government.
Six years after the dawn of e-commerce, the federal government is jumping into the online fray just at the time when dot-coms are the investment equivalent of Florida swampland. But the Feds, who are playing the Internet auction game to get returns on items ranging from surplus desks to luxury accouterments seized during the investigation of big-time criminals, have a big advantage.
Like dot-coms in the e-biz golden age (last year), Uncle Sam doesn’t have to care about profit. Furthermore, it carries no inventory costs. No capital crunch. No stock options for uppity employees. Except for the relatively small expense of putting on the electronic auction, the government just collects the cash for items it needs to unload anyway.
For consumers, there are bargains.
In February, David Gonzalez of Oxnard picked up a house formerly owned by the Coast Guard for $173,000. But he never moved in. He sold the house almost immediately without improvements for $230,000. “It was a good deal,” said Gonzalez, who does remodeling and carpentry for a living and never before saw himself as a real estate entrepreneur.
Traditional auctions have long been used by the General Services Administration, but in January the agency’s Federal Supply Service began notifying its regular bidders that it was establishing a new site, at https://www.gsaauctions.gov, to take auctions online.
“We recognize that John Q. Citizen does not have 24/7 to hang out at auctions, see the merchandise and make bids,” said Victor Arnold-Bik, GSA chief of sales. “Now they can see pictures of the items, get information and make bids at 3 a.m. or whenever they want.”
Early returns indicate the strategy is working. Even though the Federal Supply Service site handles only surplus vehicles and office furnishings, it already has racked up $8 million in sales and nearly 60,000 registered viewers. Arnold-Bik also said that the early sales indicate items are bringing in higher prices on the Internet than they did at “voice” or sealed-bid auctions.
Some of the most exotic government items up for online auction were seized by the Federal Bureau of Investigation, the Drug Enforcement Agency and other law enforcement bodies. Many of these have been farmed out to a commercial site, at https://www.bid4assets.com, where an Italian-made helicopter sold for $655,000, a Bentley went for $168,000 and a sport-fishing boat in Florida brought in $131,000.
Olympic hero Rulon Gardner, who pulled off an unexpected gold-medal wrestling victory during the 2000 games and has gone on to TV commercials and a steady round of personal appearances, successfully bid $56,000 for a Dodge Viper seized in an insurance fraud case.
The GSA’s Real Property Disposal division began last year to offer properties, including the one Gonzalez bought, at https://propertydisposal.gsa.gov/property. Many of these homes and lots were put on the electronic block in lieu of tax payments.
The Burbank home currently on the site is 3,080 square feet, with 2.5 baths and a fireplace and sound room; it requires an opening bid of $527,000. More economical is a 1,388-square-foot house near the Baldwin Hills Crenshaw Plaza for a minimum of $191,800.
Donkeys, as well as wild horses--most of which were captured on government lands--can be bid on at https://www.adoptahorse.blm.gov. During the most recent round of online auctions, horses were sold for $140 for a 6-year-old gelding to $1,260 for a 3-year-old pinto mare. Burros brought in $130 to $1,550. The animals had to be picked up in either Wyoming or Colorado.
Much of what is auctioned by the government is far more mundane. Or worse.
Somewhere in New York, just waiting to be adopted, sits a wooden desk formerly used by the Internal Revenue Service with most of its drawer pulls either dangling or missing. In Virginia is a Jeep--now with four flat tires, ripped seats and exterior rust--that once delivered the mail. In Oakland is a matching set of porcelain elephants. And in Missouri sits 3,800 boxes of camouflage clothing that, according to the site, is stored in a “mouse infested” facility.
“All the time, we prove the axiom that one man’s junk is another’s treasure,” Arnold-Bik said.
Of more use, from the GSA site, are several 1990s vintage Buicks up for bids in Arkansas and Texas. All were formerly used by FBI agents. The Assateague
Auction: Feds Have Goods Online
Island National Seashore in Maryland sold a Ford Bronco, several motor scooters and a variety of boats, including a Boston whaler, fiberglass speedboat and canoe.
Numerous cars and sport-utility vehicles recently were sold from a facility near San Bernardino. But unless you’re a mechanic or avid do-it-yourselfer, you wouldn’t want them. All were used in government crash tests.
The sale of items seized from criminals is arranged through the United States Marshals Service. One notable haul came as the result of the conviction of a Florida man, Frederick Brandau, and his associates who had raised $117 million from investors to buy life insurance policies from people with terminal illnesses.
Instead of buying the policies, however, Brandau and company mostly used the funds on a spending spree that included homes in the U.S. and Canada, two helicopters and 23 luxury automobiles.
Jim Herzog of the Marshals Service said he was not sure why they bought the helicopters. “Sometimes, it gets downright silly when these people get that kind of money,” Herzog said. “We sold the property and everything else to pay back as much as we could to the investors, many of whom are senior citizens.”
The bust of notorious drug trafficker Claude DuBoc left the marshals with a couple of undeveloped 10-acre lots in a housing development on the slope of Mauna Kea in Hawaii. Defense Department consultant Gary Hartley, who came upon the auction on Bid4Assets while researching investment properties, went further online to check recent sale prices for nearby properties.
Just minutes before the auction closed, he made the winning--and only--bid of $145,000 for a lot. “There are homes nearby that sold for $700,000,” Hartley said, “so it looks like a good investment for us.”
He’s never been to Hawaii.
“We plan on going,” he said. “After all, now it’s a tax write-off.”
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Times staff writer David Colker covers personal technology.
