Breaking up may be hard to do, as the old song goes. But wasting taxpayer money and committing fraud on the American people is pretty easy, according to government officials.
At a House Oversight and Government Reform hearing Wednesday, the details were laid out.
Robert Nabors, deputy director of the Office of Management and Budget, said that he knows of no instances where stimulus money has been withdrawn for any reason, including questionable legality.
Rep. Jeff Flake (R-Az.) asked Nabors why $800,000 directed to improve a runway at a Johnstown, Pa. airport named after Rep. John Murtha (D-Pa.) that only flies about 20 people to Washington each day had not been turned down since it did not meet criteria for the American Recovery and Reinvestment Act.
Nabors said he would have to get back to Flake and the committee about that question. He did say, however, that he and his office had been asking lots of “hard questions” of recipients to make sure the stimulus dollars are being spent wisely.
As Rep. Flake said: “No, nos?” C’mon. Even Vice President Joe Biden said he was sure “some of this money is going to be wasted.” If OMB doesn’t have any teeth, will state agencies under its watch?
The problems do not end at the front end where the money is released, unfortunately. Gene Dodaro, acting comptroller general of the Government Accountability Office, said the GAO does not have the manpower to go out and monitor projects. But it does have a fraud hotline! Call 1-800-424-5454 for an automated answering system.
He said the agency has received 61 allegations of fraud through the hotline and is investigating whether or not it needs to refer them to the Justice Department. It is not Dodaro’s fault that Congress started handing out $787 billion without first giving the GAO time and money to prepare for auditing the programs flowing from that money.
But how nave of so many Harvard-trained lawyers, including the one running the country, to think that they could monitor nearly a trillion dollars with an 800 number.
Harry Markopoulos, who blew the whistle on Bernard Madoff, spoke to many real people over years at the Securities and Exchange Commission who regularly dismissed his allegations that Madoff, scheduled to spend the rest of his life in jail, was running a massive Ponzi scheme.
So just think what is happening at the GAO. What if the guy manning the answering machine is hungover or calls in sick or hasn’t had his morning coffee? That’s our first line of defense?
Dodaro also said the GAO does not have tools to monitor how much money is going to small businesses or whether any of the technology funded by ARRA is making the U.S. closer to energy independence, both priorities of the Obama administration.
And these issues do not even address the fact that there is virtually no way to monitor if the stimulus dollars have created any jobs. Even if states and their subcontractors comply with regulations, people will be double counted since the same people can be working on multiple projects. And this line of thought assumes that any new jobs created must have come from the stimulus money, which is not true.
And even if one believes the government’s estimates that the stimulus money has created or saved 150,000 jobs so far, what a terrible return on investment. Nabors said that the government assumes that for every $92,000 spent, one job will be created and that $57 billion of the package has been spent.
Ignoring for a moment that two or more jobs should be created for $92,000, it still means that each job has cost American taxpayers $380,000. So even by the government’s own ridiculously overpriced standards, each job is costing more than four times as much as it should.
Some states are doing a better job of monitoring where stimulus money is being spent and by whom. Maryland Gov. Martin O’Malley and his administration should be commended for creating such a detailed site at www.statestat.maryland.gov/recovery.asp that allows visitors to see how much is being spent in each county on which projects. It also gives information on how to apply for ARRA grants and contracts.
Clear, easy-to-access information is the only way to monitor the billions more coming to each state in coming years, since the federal government has basically said it does not know what is going on.
Every state should look to Maryland as an example of how to inform their taxpayers. But state nonprofits could help the cause by linking contractors with contributions to politicians to shed light not just on dollars spent and goals achieved, but favoritism in the process.
Examiner columnist Marta H. Mossburg is a senior fellow at the Maryland Public Policy Institute.
