Watch Dogs
December 15, 2009
by: Sean Kennedy

Government WasteWatch, Winter 2009

State Piglet Roundup

In conjunction with state taxpayer groups, Citizens Against Government Waste (CAGW) released five Piglet Books in 2009.  Piglet Books bring CAGW’s national expertise in exposing waste, fraud and abuse to the state and local levels. 

In January, CAGW and the Grassroot Institute of Hawaii released the 2009 Hawaii Pork Report.  The exposé uncovered plans by the City and County of Honolulu to spend $2 million to upgrade government-owned golf courses.  In addition, the report listed plans for a state employee to attend the Grammy Awards in California at a cost of $2,829.91.
 
CAGW and the Buckeye Institute released the 2009 Ohio Piglet Book in March.  Several state representatives were on hand to help unveil the report.  The Piglet was especially timely as state budget officials predict a shortfall of $7.3 billion in fiscal year 2010. 
 
The Ohio Piglet disclosed dozens of wasteful items, including $1.2 billion for the Ohio Department of Development, which distributes tax credits, loans and corporate welfare grants.  Previous grants have included $475,000 to open a Chuck E. Cheese restaurant in Lima, and $399,000 for construction of a Kroger grocery store in Lucas County. 
 
Ohio taxpayers have subsidized a variety of sports stadiums through the Cultural Facilities Commission, including $73.3 million for the Great American Ballpark and Paul Brown Stadium in Cincinnati; $36.8 million for Cleveland Browns Stadium; $5.5 million for the Ice Arena in Toledo; and, $200,000 for the City of Avalon Minor League Stadium.
 
Together with the Tennessee Center for Policy Research, CAGW released the 2009 Tennessee Pork Report in May.  This was the fourth Pork Report in as many years in the state. 
 
Examples of wasteful spending included $9 million for the “Party Bunker,” an underground entertainment facility buried in the front yard of the Governor’s Mansion; $7.4 million to finance government-approved art, including a grant to an author of sex novels and support for a film festival showing “porn-influenced sexual encounters;” and, $6.5 million to “eradicate” boll weevils, even though Tennessee’s cotton fields are already more than 99 percent free of the pest.
 
Also in May, CAGW and the Pelican Institute unveiled the first Louisiana Pork Report.  As the state grapples with a $1.8 billion shortfall, the 2009 Pork Report unmasked numerous wasteful items in the budget.  The state spent $4 million on a private golf club, the Tournament Players Club in Avondale, which hosts the annual Zurich Classic, and $230,000 for six museums, including the Louisiana Political Hall of Fame and Museum.
 
Finally, in September, the 2009 Maine Piglet Book was released in conjunction with the Maine Heritage Policy Center.  This was the second Maine Piglet Book; the first was published in 2007.  The 2009 Maine Piglet uncovered dozens of examples of questionable spending by state and local officials, including $11.9 million for a new 55,000 square foot administrative building for 116 turnpike workers, and $102,000 for three paintings for a rest stop in Kennebunk.
 
Look for the next installment of CAGW’s efforts to clean up state budgets on January 6, 2010, when CAGW and the Idaho Freedom Foundation will release the 2010 Idaho Piglet Book.  All of these reports are available at CAGW’s website, www.cagw.org.

GAO Report Roundup

The Government Accountability Office (GAO) has released several intriguing reports in recent months.  As an independent and non-partisan agency, GAO examines federal use of taxpayer dollars.  In addition to initiating its own audits and investigations, GAO is required by statute to perform certain regular reviews of programs as well as respond to specific requests from members of Congress.
 
On October 15, 2009, GAO released a study on the Defense Contract Audit Agency (DCAA), which is responsible for contractor oversight.  The Department of Defense (DOD) paid more than $380 billion to contractors in fiscal year (FY) 2008, more than double the amount it spent on contractors in FY 2002.  Unfortunately, the results of the GAO report were not pretty:  “An initial investigation of hotline allegations at three DCAA field office locations in California revealed that all 14 audits and 62 forward pricing reports GAO examined were not performed in accordance with professional auditing standards.” 
 
In one example, a DCAA manager “experienced pressure from the contractor and the DOD buying command to drop adverse findings.  The manager directed his auditors to drop the findings, and DCAA issued a more favorable opinion, allowing the contractor to win a contract that improperly compensated the contractor for hundreds of millions of dollars in commercial business losses.”  This matter is currently under criminal investigation by the Office of the DOD Inspector General.
 
A November 12, 2009, GAO report focused on the State Department’s Bureau of Diplomatic Security.  GAO reported that the Bureau’s budget has grown from $200 million in 1998 to $1.8 billion in 2008, an increase of 800 percent.  The State Department’s mission in Iraq received $300 million for diplomatic security in 2008, or 17 percent of the $1.8 billion.  Obviously, a large portion of the increase over the last 10 years is due to expanded foreign missions brought on by the wars in Afghanistan and Iraq.  However, GAO recommended that the State Department conduct its own in-depth review of the Bureau of Diplomatic Security in order to make certain that it is appropriately addressing the department’s security needs and allocating resources in a strategically sound manner.
 
GAO released a second report on November 12, analyzing the financial condition of the U.S. Postal Service (USPS).  To put it bluntly, USPS is in dismal shape.  According to GAO, mail volume decreased 14 percent in FY 2009, causing USPS revenues to decline from $75 billion to $68 billion.  Emergency congressional funds of $4 billion were needed to pay for USPS retiree health benefits. 
 
Unfortunately, GAO is predicting more dire times ahead.  The USPS is already $10.2 billion in debt, and GAO forecasts that USPS will run deficits of $7 billion in both FYs 2010 and 2011.  To increase revenue, USPS is attempting to expand into banking and insurance.  According to GAO, “Allowing USPS to compete more broadly with the private sector could lose money, and fair competition issues would need to be considered.”
 
GAO’s reports continue to be a beacon of light in a government that thrives on keeping taxpayers in the dark.