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For Immediate Release: Oct 13, 2016
Contact: Kirsten Stade (202) 265-7337

KLAMATH IRRIGATORS ILLEGAL PIGGY BANK BROKEN UP

Auditors Find Reclamation “Wasted” Millions in Drought & Wildlife Relief Funds


Washington, DC — A federal water agency misspent millions of dollars intended for fish and wildlife and drought relief in the Klamath Basin on irrigator subsidies, according to new audit report which confirms charges leveled last year by Public Employees for Environmental Responsibility (PEER). The federal agency, the U.S. Bureau of Reclamation, disputes these findings and, while the payments have ended, it refuses to change its practices to prevent future abuse or to recoup moneys illegally spent.

In an audit report dated October 11, 2016, the Office of Inspector General (IG) for the Interior Department found that Reclamation improperly siphoned millions of dollars over several years to an irrigator’s group called the Klamath Water and Power Agency (KWAPA), which taps federal water projects in northern California and southern Oregon. In recent years, the Klamath watershed has been crippled by a series of droughts. The IG report details how Reclamation diverted $32 million in federal funds intended for drought contingency planning and helping struggling fish populations –

  • In a “waste of funds” wholly lacking in any legal authority;
  • Paying for KWAPA salaries, fringe benefits, rent, travel and other expenses whose benefits flowed “primarily to irrigator contractors rather than fish and wildlife,” including $4.2 million for uses that could not be supported with documentation or were outright “unallowable”; and
  • By modifying the KWAPA contract “19 times to expand the scope of activities” and extend the original payment program from 2008 through September 30, 2015.

Due to complaints filed by PEER, the payments ended last year and KWAPA ceased operations on March 31, 2016. However, Reclamation rejects the IG findings. So, the IG is kicking this intra-agency dispute upstairs in Interior to “the Assistant Secretary for Policy, Management and Budget for resolution.”

“Basically, the Bureau of Reclamation became an illicit ATM for favored special interests,” stated PEER Senior Counsel Paula Dinerstein, noting that these illegal payments would be continuing if Reclamation employees had not blown the whistle. “To add injury to insult, these improper subsidies were used to aggravate environmental damage by draining shrinking groundwater supplies to benefit irrigators.”

The whistleblower complaint from two Bureau biologists filed through PEER induced the U.S. Office of Special Counsel to order the Secretary of Interior to address the illegal diversion of funds and how her agency would remedy identified violations. That answer to the Special Counsel was due back in August of 2015 but Reclamation, on the Secretary’s behalf, has obtained extensions totaling 15 months.

“Reclamation is circling its wagons to defend the potentially criminal conduct by its own managers,” added Dinerstein, pointing to the Anti-Deficiency Act, which forbids expenditures not authorized by any appropriation and is enforced by criminal fines and/or imprisonment for up to two years. “We will keep pressing for some accountability to taxpayers from Reclamation’s multi-year, multi-million dollar illegal money-laundering operation.”


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Read the IG audit report


Look at still pending probe from the Office of Special Counsel