Federal agency misspends $32 million
WASHINGTON—Investigators have confirmed that a federal water agency misspent $32 million in funds meant to protect fish and wildlife in the Klamath basin of California and Oregon, a finding that Obama-era officials attempted to sideline after whistleblowers first alerted them to it.
According to a report from the U.S. Office of Special Counsel, sent to President Donald Trump and obtained this week by McClatchy, the U.S. Bureau of Reclamation for eight years effectively handed the money to a Klamath water project controlled by private irrigators, with few or no controls on how the funds were spent.
The bureau, part of the Interior Department, shut down the water bank in 2016 after two whistleblowers alleged it was transferring money to irrigators that was intended for environmental purposes. But agency leaders have continued to dispute any wrongdoing and have apparently taken no administrative action against those responsible.
“At the Bureau of Reclamation, misappropriating millions of taxpayer dollars is a no-harm-no-foul offense,” said Paula Dinerstein, senior counsel for Public Employees for Environmental Responsibility, a D.C.-based group that represented the two federal whistleblowers.
PEER and the two employees, retired fisheries biologist Keith Schultz and natural resource specialist Todd Pederson, said they know of no Bureau of Reclamation official who has been reprimanded by the agency. They are urging that Trump’s nominee for Reclamation commissioner, Brenda Burman, revisit the issue once she is confirmed.
Schultz, in a telephone interview from his home outside of Seattle, said he was pleased to see the findings of the Office of Special Counsel, an agency Congress created in 1979 in part to protect federal whistleblowers. But Schultz said he was disappointed that the OSC didn’t recommend the Department of Justice launch an investigation into possible criminal wrongdoing with the Klamath money.
“There was misappropriation of funds,” Schultz said. “This was going on for a while.”
For now, the Bureau of Reclamation and the Interior Department are sticking with a position they issued in October, when the Office of Inspector General similarly faulted the bureau for misspending federal funds, a spokesman said. “Reclamation maintains that (the reimbursement program) has been an important tool in dealing with water issues in an over-allocated basin,” the bureau said at that time.
The upper Klamath basin, which straddles Oregon and California, has long been a flashpoint for conflicts over irrigation water, wildlife refuges and the Endangered Species Act. Amid a drought in 2001, the Bureau of Reclamation cut off subsidized irrigation water to more than 1,000 farms to reserve supplies for threatened fish, triggering tense protests.
Ever since, the Bureau of Reclamation has sought to ease concerns of Klamath farmers and their champions in Congress. Up until 2007, the bureau created a subsidized “water bank” program to free up water to benefit salmon downstream. To reduce demand for federal irrigation water, the program paid farmers to idle land or make greater use of groundwater.
The bureau spent $30 million on the water bank, but results were spotty and farmers complained about red tape. So in 2008, the bureau entered into an agreement with the Klamath Water and Power Agency, an organization created by California and Oregon irrigation districts, to manage the water bank and its successor, the Water User Mitigation Project.
Prior to the contract, the Klamath Falls-based KWAPA had no board of directors and no staff. By the time the bureau terminated the contract in 2016, it had allowed the local agency to receive $41.25 million in federal funds, according to the U.S. Office of Special Counsel.