REPORT: Obama provided $50 million in improperly managed subsidies (VIDEOS)


While the Interior Department was still managed by the Obama administration, its lead water regulator provided $50 million in improperly managed subsidies to California contractors, the agency’s Inspector General reported on Friday. The subsidies were part of a major conservation program in the state.

According to the report, the U.S. Bureau of Reclamation (USBR ), which oversees water management activities in the state, did not disclose some costs of its Bay Delta Conservation Plan (BDCP) to Congress. It also did not have an explanation for why contractors had not reimbursed the federal government $50 million.

“USBR obtained this $50 million over a 7-year span by using a complex, obscure process that was not disclosed in the annual congressional budget justifications, Office of Management and Budget Calfed Bay-Delta certified annual financial reports, or numerous briefing documents on BDCP issues and status prepared by USBR for senior management officials,” the report states.

The BDCP is a plan proposed by Governor Jerry Brown (D) and the California Department of Water Resources to carry fresh water from the Sacramento River, under the Sacramento-San Joaquin Delta, toward the intake stations. (see video’s below)

The bureau had decided that the $50 million in appropriated funds “was used for a nonreimbursable purpose, meaning the cost was absorbed by the federal government rather than being repaid by … water contractors,” the report said. “Had [the bureau] used the appropriated funds for reimbursable [conservation plan] operation and maintenance, the purpose for which the funds were originally requested, the costs would have been repaid by [the] … water contractors.”

The bureau was “unable to provide documentation or analysis supporting its determination that these funds were nonreimbursable, and we question [its] interpretation of this legal authority,” the watchdog reported.

While the inspector didn’t say the bureau acted illegally, the report states that the agency was guilty of not fully disclosing $84.8 million – the cost of participating in the California conservation program – to Congress and other stakeholders.

Contractors were responsible for paying 50 percent of the cost of implementing the Bay Delta plan, according to state law and a memorandum of agreement between federal and nonfederal parties involved in the conservation project.

Yet the contractors only paid 18 percent, while the Interior Department Bureau of Reclamation paid 64 percent of the contractors’ contributions.

Through June 30, 2016, the bureau reportedly paid for 33 percent of the project’s activities, and total funding provided for the Bay Delta project, by all parties, equaled approximately $257.3 million. The Interior Department contributed $84.8 million.

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