Governor's Delta tunnels scheme sees $50 Million in federal funds misspent

WASHINGTON, D.C.
September 8, 2017 11:59am
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•  Bureau of Reclamation not transparent in its participation, federal investigators say

•  “USBR’s submission of inaccurate annual Calfed Bay-Delta certified financial reports has now been disclosed”


The twin water tunnels project pushed by Gov. Edmund Gerald Brown Jr. as a substitute for his voter-rejected Peripheral Canal have seen at least $50 million misspent by the Bureau of Reclamation, one of the supporters of the controversial project.

That's the charge by the Office of the Inspector General of the Department of the Interior, in a report Friday.

“The actions it took to fund … planning costs were neither transparent nor consistent with the 'beneficiaries pay' principle underlying Reclamation Law,” says the Office of the Inspector General of the Department of the Interior. Reclamation “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,” the report says.

That $50 million was supposed to be paid by water contractors – organizations that buy and resell water from the federal Central Valley Project and the State Water Project. The water contractors, led by the Metropolitan Water District of Southern California, are pushing for the tunnels to drain fresh water out of the Sacramento River before it could flow into the California Delta.

The Bureau of Reclamation “did not disclose the full cost of its participation in the BDCP [an earlier moniker for the project, now marketed as 'WaterFix'], subsidized Central Valley Project water contractors, and converted $50 million in Federal funds from reimbursable to nonreimbursable without documentation to support its determination that the funds should be nonreimbursable,” the report says.

“Further, while USBR had the legal authority for its financial agreements, USBR’s use of funds for one agreement was not consistent with its authority under the Fish and Wildlife Coordination Act,” it says. USBR is its acronym for the U.S. Bureau of Reclamation.

The federal investigators say that the Bureau of Reclamation has now agreed to no longer provide funds to the governor's Department of Water Resources for future tunnel efforts unless appropriated funds are specifically requested for that purpose.

“USBR’s nondisclosure to Congress and other stakeholders the full cost of its participation” in the governor's tunnels “has been disclosed” thanks to the new report, the Office of Inspector General says.

And, it says, “USBR’s submission of inaccurate annual Calfed Bay-Delta certified financial reports has now been disclosed through our report.”

The $50 million might be little more than chump change when compared against the final cost of the massive tunnel project, which has been estimated as high as $67 billion, including interest on the money borrowed through revenue bonds to finance it. That cost would ultimately be paid by businesses and residents that use water from the tunnels.


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