By John Solomon, Phillip Swarts and Russ Ptacek
WASHINGTON, D.C. (WUSA/WASHINGTON GUARDIAN) - The government's fiscal watchdogs have identified more than $5.8 billion in problematic stimulus spending, a figure that dwarfs the election-year statistics the Obama administration is using to tout the integrity of the president's signature economic recovery program, a Washington Guardian review of investigative reports has found.
The $830 billion stimulus championed by President Barack Obama added to the deficit as an investment in giving the economy a charge during the financial crisis. But the more money that was wasted, the less the economy was helped.
The problems uncovered in hundreds of federal audits and investigations range from estimated millions in Agriculture Department funds for the rural poor that went to pay for prohibited homes with swimming pools to millions more that went to construction firms that did shoddy weatherization work or were later barred from government contracting because of criminal activities.
The Veterans Affair's Department's chief watchdog, for instance, says the agency can't demonstrate the $50 million it spent to refurbish cemetery monuments or memorials was justified. The Energy Department admits it wasted $7 million unnecessarily on golden parachutes to temporary stimulus workers it hired, then laid off. And the Labor Department inspector general says that agency spent $31 million more for a building than was necessary. None of those amounts are counted in the figures used this fall by the administration on the campaign trail.
The tally calculated by the Washington Guardian so far accounts for about 2.4 percent of the $243.6 billion in President Obama's $830 billion stimulus program that went to direct spending, such as grants and loans. The figure is expected rise as the inspectors general at the 29 federal agencies that got funding from the American Recovery and Reinvestment Act pursue more than 1,900 open criminal investigations and hundreds more audits.
With 1,900 open investigations, the fraud figure is expected to grow. For instance, the Board recently alerted the Veterans Affairs Department that stimulus-related benefits may have been paid to 16,000 people using the Social Security numbers of deceased Americans. In fact, the fraud number recently went up to $11.6 million, a half million dollar jump from the previous month, officials said Wednesday. .
The Washington Guardian calculated the $5.8 billion number by tallying specific dollar figures in stimulus-related audits and investigative reports the IGs have issued in the last two years that involved fraud, waste, abuse, undocumented expenditures flagged for reimbursement, prohibited expenditures, or loans, contracts or grants to firms or individuals that went bankrupt, were convicted of crimes or were barred from federal contracting. Some of the IG figures are based on estimates derived from statistical samples of the programs they monitor.
White House officials declined repeated requests for on-the-record comment from WUSA9 and The Washington Guardian.
In private conversations with The Washington Guardian, administration officials acknowledged the numbers they have been using on the campaign trail, while technically accurate, were narrowly cast and did not capture all the spending problems
Far and away the single largest amount of flagged spending involved an Agriculture Department loan program to stabilize single-family housing in rural areas. Using a sample of 100 of the 81,000 loans, investigators estimated that $4.16 billion - or roughly 37 percent of all aid - was given to ineligible families who either already owned a home, could not repay the loans, had incomes higher than the program was intended for, or had incomes high enough to afford loans from non-government sources.
"Recovery Act funds were used with little oversight and were approved for ineligible purposes," the inspector general reported. Federal workers only partially investigated loan recipients' financial situations, missing indicators that families could either not repay the loan or were making enough that they didn't need government assistance, the IG said. An estimated $230 million went to buy or pay mortgages for homes with above-ground pools, violating the agency's policy that "without exception, no swimming pools are permitted for loans obligated using Recovery Act funds," the IG noted.
The Agriculture Department did not return calls to the Washington Guardian seeking comment.