Published February 04, 2010
Federal agencies are spending stimulus money at the rate of $196 million an hour. And they will do so every hour for the next eight months until a September 30, 2010, deadline.
"When you put that kind of money out the door that fast, there's a possibility of $55 billion dollars of waste, fraud and abuse connected with it," Sen. Charles Grassley, R-Iowa, said Thursday before a Senate Finance Committee hearing examining the lack of oversight in the $878 billion dollar economic stimulus bill passed a year ago.
Grassley said he fears much of the money is going to some individuals and businesses that don't qualify for it and projects that do not serve taxpayers best interests. Judge for yourself:
-- $233,000 to the University of California at San Diego to study why Africans vote. Jobs created: 12, but seven of those are Africans in Africa.
-- In Nevada, $2 million in stimulus money built a new fire station, but because of budget cuts, the county can't afford to hire firefighters to work there.
-- Penn State University got $1.5 million to study plant fossils in Argentina. Of 5 jobs created, 2 belong to Argentines.
-- Researchers the State University of New York at Buffalo got $389,000 to pay 100 Buffalonians $45 each to record how much malt liquor they drink -- and how much pot smoke each day. Consumption is then reported via an automated phone hotline. Cost per job: almost $200,000.
-- The Obama administration is spending $5 billion to weatherize homes. But one Texas county spent $4 million to weatherize just 47 homes. That's $78,000 per house. Each retrofit is supposed to save homeowners $500 a year in energy costs. That means taxpayers will recoup their investment in 156 years, long after the home is probably torn down.
-- Two Arizona universities got almost $1 million dollars so 3 grad students can study how ants work. That's more than $300,000 per job.
-- Companies that raise tropical fish, shellfish, catfish, alligators and even turtles qualify for $50 million in tax money to buy fish food.
-- North Carolina public schools received $4.4 million to hire math and literacy coaches, not for students, but teachers. That's 64 people paid $70,000 each to teach teachers how to teach reading and math.
"We have to know that people at the Office of Management and Budget and the various agencies that are shoveling this money out the door, that they're on top of it," Grassley told Fox News. "And we need transparency and information on all of this."
Senate sources say privately many inspectors general are understaffed and overwhelmed, and mechanisms to stop fraud and disqualify tax cheats, criminals and others aren't always working.
Take the Napa Valley Wine Train. The county received $54 million to build a railroad bridge, relocate a half-mile of track and build a flood wall to protect a wine train passenger station. The no-bid contract went to a minority-owned business operated by an Eskimo tribe outside Anchorage.
The company then hired a real construction company for a fraction of what they were paid by the government to actually do the work. The tribe's CEO has no construction experience. His last business, a Web site for sailors, went bankrupt after spending $13 million in investor money.
"That wine train is sort of the perfect storm of practically all of the things that is wrong with government contracting," said Danielle Brian, director of the Project on Government Oversight.
Other dubious contracts include:
-- $6 million in stimulus money to a California contractor under federal investigation for overcharging San Diego for cleanup after the 2007 wildfires
-- A Denver developer received $13 million in tax credits to help build a senior housing complex despite being sued as a slumlord for running decrepit, rodent-infested apartment buildings in San Francisco.
-- Kentucky gave $24 million to a contractor on trial on for bribery.
-- An aerospace company received $15 million to monitor water quality in a Ventura County creek it was already fined for polluting.
"What we have is already a broken system. The federal government is just lousy in its contracting. When you add these elements of speed where the contracting officers or the agencies are being pushed to hurry up and get these dollars out and these grants out quickly, all you're doing is making it harder for them to make good choices," said Brian.
Some inspectors general are spending less than one percent of stimulus expenditures on oversight.