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California 9/11 fund raided to plug deficits, finance other programs

After the 2001 terrorist attacks, California lawmakers sought a way to channel the patriotic fervor and use it to help victims' families and law enforcement. Their answer: specialty memorial license plates emblazoned with the words, "We Will Never Forget." 

Part of the money raised through the sale of the plates was to fund scholarships for the children of California residents who perished in the attacks, while the majority -- 85 percent -- was to help fund anti-terrorism efforts. 

But an Associated Press review of the $15 million collected since lawmakers approved the "California Memorial Scholarship Program" shows only a small fraction of the money went to scholarships. While 40 percent has funded anti-terror training programs, $3 million was raided by Gov. Jerry Brown and his predecessor, Arnold Schwarzenegger, to plug the state's budget deficit. 

Millions more have been spent on budget items with little relation to direct threats of terrorism, including livestock diseases and workplace safety. 

Moreover, the California Department of Motor Vehicles has been advertising the plates as helping the children of Sept. 11 victims even though the state stopped funding the scholarship program seven years ago. The specialty plate fund continues to take in $1.5 million a year. 

Californians who lost loved ones in the attacks take the raid on the license plate fund as an affront to the memory of those who died. 

"I can't believe that they would do that," said Candice Hoglan, who lives in the San Francisco Bay Area and bought a plate to commemorate her nephew, Mark Bingham. "We're paying extra for the plate; we're making a point, and it means a lot to us." 

Bingham was killed on United Airlines Flight 93, which crashed in Pennsylvania, and was one of the passengers who led the attempt to wrest control from the hijackers. His mother, Alice Hoagland, also was troubled by the program's apparent drift from its original purpose. 

"I'm sorry that as we retreat in time from 9/11, we seem to be retreating in our resolve never to forget," she said in a telephone interview. 

The plates, which cost an initial $50 plus a $40 annual renewal fee, feature an American flag partially obscured by clouds and the "never forget" slogan. Residents of California, where all four jetliners were bound when they were hijacked, have bought or renewed the plates more than 200,000 times since 2002. 

Of the other states directly associated with the 2001 attacks, only Virginia has established a similar specialty plate program. Yet it did not set up a special fund for the proceeds of its "Fight Terrorism" plate. 

For the past decade, the California DMV has said on its website that the money will "fund scholarships for the children of Californians who died in the September 11, 2001, terror attacks and helps California's law enforcement fight threats of terrorism." It advertises the program with the slogan, "Be a patriot." 

While the DMV description of the program was not "totally disingenuous," the department should probably remove references to the scholarship program, said Joe DeAnda, a spokesman for the state treasurer's office, which disburses the money. 

"It's out of date and it's on DMV to update that," he said. 

Late Friday, the department modified the description of the license plate on its website to remove the reference to the scholarship program in response to the investigation by the AP, which began in March. Spokeswoman Jan Mendoza said the reason promotional materials were not updated sooner was "unknown." 

The DMV still lists the scholarship program on the online and hardcopy form drivers fill out to buy the license plates, but Mendoza said the department will change this next time the forms are printed. 

The legislation establishing the plates had earmarked 15 percent of the revenue for scholarships. 

Yet only $21,381 has reached the children and spouses of the three dozen California residents killed during the terrorist attacks. The state treasurer's office closed the scholarship program in 2005, the sign-up deadline for potential recipients, and has $60,000 in reserve. 

The total amount dedicated to scholarships was 1.5 percent of the $5.5 million raised through the sale of the plates through 2005. 

The original legislation said the remainder of the money would go to "law enforcement, fire protection, and public health agencies" to be used "exclusively for purposes directly related to fighting terrorism." 

But in 2008, former Gov. Arnold Schwarzenegger, a Republican, borrowed $2 million to close a budget gap. Last year, Brown, a Democrat, borrowed another $1 million. 

Neither loan has been repaid nor are their deadlines to ensure they will be. Elizabeth Ashford, a spokeswoman for Brown, said the loans have done no harm. 

"We're trying to simultaneously balance the budget and fund important programs," she said. "If there was an indication that borrowing this money was going to negatively impact this program, we wouldn't borrow the money." 

The rest of the monee reading "WE R 4US," said she signed up for the program primarily to show respect for victims of the 9/11 attacks. Anderson said she was disheartened but not surprised to learn that much of the money has gone to fill the state deficit or used for general purposes. 

"That's California," said Anderson, who now lives near Austin, Texas. "It's kind of a given these days -- nothing is spent on what it's supposed to be."