Feds have more than 1,900 investigations open into alleged stimulus wrongdoing

With little notice, inspectors generals across federal agencies are piecing together criminal and civil cases into stimulus money that was misspent, wasted or defrauded.
UPDATED 23:44 PM EDT, October 14, 2012 | BY John Solomon
The Obama administration has boasted there have been few problems with fraud and waste with its economic stimulus, but the lower early numbers of problems are likely to balloon as more than 1,900 investigations are underway at various federal agencies.

The government’s chief spending watchdogs have already secured nearly 600 convictions and judgments against people and companies accused of misusing stimulus funds and have a whopping 1,900 investigations currently open into possible wrongdoing, officials say.

The wave of scrutiny more than three years after the American Recovery and Reinvestment Act was passed by Congress early in the Obama administration means the question of how money was managed early in the program is certain to extend well into the next year as many of the current investigations come to conclusion.

The Recovery Board charged with coordinating efforts among than inspectors generals at more than two dozen federal agencies that distributed stimulus money posted an item on its official blog last month claiming the total amount of money lost to fraud from the $840 billion stimulus program was a miniscule $11.1 million so far.

Vice President Joe Biden even made reference to the figure as he defended the stimulus program from attacks from Republican Rep. Paul Ryan during the vice presidential debate last Thursday. But that number only identifies money that is considered lost to fraud and does not include funds still under investigation or thoserecommended for reimbursement after audits identified misspending, officials said.

And a senior official familiar with the ongoing investigations by inspectors generals at federal agencies told the Washington Guardian the government expects the loss figure to balloon in coming months.

“These cases often take months or years, and we’ve got hundreds open right now across the government so that number is going to go up, probably by a large amount over the next 18 months,” the official said, speaking only on condition of anonymity because the official was not authorized to speak to the media.

Since the blog post a month ago that released the $11 million figure, several inspectors generals have announced new convictions, prosecutions or audits, a sign that some of the investigations are growing near decisions and actions.

For instance, the Energy Department inspector general reported last week it discovered the California energy commission collected two duplicate payments under a stimulus program that costs taxpayers $678,000 and and it recommended the money be repaid.

The Health and Human Services inspector general reported recently that a Louisiana group that received stimulus funds for Head Start programs for children had inappropriately spent nearly $1.2 million in federal funds to construct a new building that wasn’t approved by federal officials. The group is contesting the finding.

The Energy Department inspector general also warns in its most recent semiannual report that the Western Area Power Administration, which received $3.25 billion in borrowing authority to help build transmission lines under the stimulus law, is at risk of losing significant money on a transmission project for wind power in Montana that it funds.  http://www.washingtonguardian.com/stimulating-investigation