FAA manager Steve Lewis of Phoenix said he thought the meetings and an evening buffet cocktail party would help provide "a more harmonious workplace."
The FAA said there was also a special "focus session" on improving the "safety culture" at the FAA.
"Anyone who is flying, whose flight has been delayed or canceled could find a lot better usage for five million dollars for the FAA," said Schatz of Citizens Against Government Waste.
The meetings took place over the course of three weeks, with 1,200 FAA managers attending each week.
The FAA said "Atlanta was deemed the best value city" and the meeting resulted in the host Omni hotel employing 700 additional workers to handle the conference.
As part of the hospitality for the FAA, the hotel threw in the cost of the buffet cocktail party for the government managers and also provided Krakowski, the senior FAA official present, with the expansive Governor's Suite on the 28th floor.
A FAA spokesperson said Krakowski's suite was charged at the $140 per diem rate and that the FAA "did not pay for any Christmas parties."
"Clearly the cost of the cocktail reception and whatever was done by the hotel was included in the cost," said Schatz of the watchdog group. "No hotel is going to have a party for so many guests without covering the hotel's costs."
The FAA has been beset by a series of technical and computer glitches that have created chaos for the country's air passengers. The agency is pushing for a $22 billion dollar upgrade to replace equipment that, in some cases, dates to the 1960s.