Investigations of Stimulus Waste, Fraud, and Abuse

by Michael Grabell, ProPublica

Below is a list of cases in which stimulus money has gone to contractors under investigation or with serious violations in their past. It also includes problems found in inspector general reports. We'll be updating this regularly - so if you have new information about a case or have one we should add, e-mail us. Related article

Date Stimulus Money What Happened? Source
3/14/2010 Not available An investigation by The Columbus Dispatch found that 20 of the 58 nonprofits in Ohio's weatherization program failed more than half their state inspections in the last three years. The shoddy work included gas leaks and a "carbon-monoxide back-drafting issue in the basement of the home where several children were sleeping." "Overall, nearly 40 percent of the houses that state inspectors checked failed," the newspaper reported. The Columbus Dispatch
3/12/2010 $200000 A former Monroe, La., city official who was sent to prison for public corruption received stimulus money for a sidewalk project when his construction firm was hired as a subcontractor on the $200,000 project. The News Star
3/2/2010 $1 million California's inspector general found that $1 million for a Tulare County program to give summer jobs to young people was improperly used for overhead expenses, such as rent and utility bills. The director of the workforce board said it was an accounting error and that no money had been misspent. California Inspector General
2/5/2010 $1.9 million The New York comptroller called upon the state transportation department to terminate a Long Island bridge-painting contract because the firm doing the work has since been banned from receiving state contracts. The comptroller found that the firm was closely tied to another contractor that had violated wage rules. The state rejected another stimulus contract for the firm in August. (See below.) Empire State News
2/2/2010 $62000 The inspector general for the U.S. Department of Housing and Urban Development raised questions about some expenses for a community development grant given to Jersey City, N.J. Auditors recommended that Jersey City repay the costs for "consultant, legal, mission statement" support and better document another $118,000 associated with office rent, auto insurance and monthly parking fees. Housing and Urban Development Inspector General
1/26/2010 $3.5 million A contractor hired to install water meters in Sacramento has been accused of fraud after it failed to pay its workers and the bond firm listed on the contractor's bid package said it didn't have a relationship with the company. The Sacramento Bee found that the company's owner "filed for bankruptcy protection on a similar business venture in 2001, has multiple liens against him for unpaid taxes and bills and submitted a bid packet to the city with numerous irregularities." Sacramento Bee
1/21/2010 $24.8 million Six companies received Air Force and Veteran Affairs contracts set aside for companies based in poor neighborhoods or owned by minorities and disabled veterans even though government investigators found them ineligible. In one case, a Maryland company joined the small business program improperly by listing a house in a blighted neighborhood as its headquarters. The firm's lawyer said it "believes it complied in good faith" with the rules. USA Today
1/11/2010 $2.8 million The U.S. Department of Housing and Urban Development awarded $2.8 million in stimulus money for lead paint cleanup to ineligible applicants. The inspector general found that HUD erred in evaluating the applications for the city of Greenville, N.C., and a Pittsburgh nonprofit. The mistake deprived more qualified applicants from receiving stimulus money, the report said. HUD said it wouldn't rescind the money from Greenville. But the agency revoked the leftover grant money from the Pittsburgh nonprofit because it provided inaccurate information in its application. Housing and Urban Development Inspector General
1/10/2010 $369.1 million Large corporations like Boeing, BP and Rio Tinto have secured stimulus work in California despite previous pollution violations and allegations of fraud. Boeing received a contract for environmental monitoring at a site it was previously fined for polluting. Some of the contractors said that focusing on a few cases misrepresents their work because they receive hundreds of millions to billions in federal dollars each year. California Watch
1/7/2010 $24 million The Kentucky transportation department awarded $24 million in contracts to companies associated with a road contractor accused of bribing the previous state transportation secretary. The contractor's name no longer shows up on business records for the companies, but his son remains an officer or on the board of directors. A jury acquitted the contractor and transportation secretary at trial. Transportation Dept. Inspector General
12/31/2009 $44.9 million The inspector general for Health and Human Services found 20 community action agencies in 16 states that had received community service grants despite being designated as "vulnerable" or "in crisis." As a result, the internal watchdog warned that the money may be at risk for fraud, waste and abuse. Department of Health and Human Services
12/6/2009 $2.7 million An Oklahoma highway contractor was suspended from state road projects after pleading no contest to conspiring to use unsuitable asphalt material and intimidating a witness. Within months, his son formed a new company at the same address and started receiving stimulus contracts. The son said his father's case had nothing to do with him and the only connection was that they had the same last name. The Oklahoman
12/3/2009 Not available The Department of Energy's inspector general found that Illinois weatherization inspectors failed to properly monitor and inspect renovations to make homes more energy efficient. In one case, inspectors failed to detect substandard installation that resulted in a furnace gas leak that could have seriously injured the home's residents. Energy Dept. Inspector General
12/2/2009 $54 million Thirteen of the 21 companies that have won transportation contracts in Massachusetts have been in trouble with the law, including convictions for defrauding taxpayers or fines for pollution and endangering the lives and safety of their workers. New England Center for Investigative Reporting
10/29/2009 $1.2 billion Several large stimulus contracts have gone to companies in the Project on Government Oversight's contractor misconduct database, which tracks violations and lawsuits involving the 100 largest federal contractors. One of the companies, Honeywell International, has been sued by the Justice Department, accused of costing the government millions of dollars by selling faulty bulletproof vests to the Defense and Homeland Security departments. Washington Post
10/25/2009 $30 million The Air Force and Army awarded numerous military base contruction projects to six contractors suspected of abusing a system designed to help small minority firms win government contracts. Criminal investigators have found that the companies were all tied to a Southern California businessman, making them too large to receive the set-aside contracts. ProPublica
9/29/2009 Not available The Treasury's inspector general for tax administration examined the first-time homebuyer credit, which began in 2008 and was extended under the stimulus program. It found that as of July 2009, nearly $504 million in credits were claimed by taxpayers who appeared ineligible because their tax returns indicated they had owned a home within the last three years. Auditors also identified 582 people claiming the credit who were under 18. One person claiming the credit was 4 years old. Treasury Dept. Inspector General
9/3/2009 $6 million A huge international construction firm received stimulus money to oversee the renovations of two Brooklyn federal buildings despite having been the subject of two recent criminal investigations involving the 2007 Deutsche Bank fire that killed two New York firefighters. New York Times
8/24/2009 $7 million The New York state comptroller rejected a contract to paint 61 bridges in upstate New York because of its concerns that the Bronx contractor may be a front for a firm that had been banned for violating wage rules. New York Daily News
7/22/2009 $21.8 million An Arizona paving contractor won the state's top highway project even though three of the firm's top executives pleaded guilty in a federal criminal case involving fraudulent tax returns. Charges against the company itself were dropped after it agreed to pay $1.2 million in back taxes and fines. Arizona Republic
7/1/2009 $1 million The Federal Highway Administration revoked $1 million in stimulus funding from a road project in Washington state after an investigation revealed that the county road engineer had owned property near the road and profited from selling the county right of way. The Daily World
5/21/2009 $39.6 million Some of the first federal stimulus contractors had paid hefty fines for breaking environmental and worker-safety laws or had settled lawsuits alleging racial discrimination. One company, CACI International, won a contract to provide consultants despite a 2004 Army investigation, which found the company poorly screened interrogators, who later abused prisoners at Abu Ghraib. ProPublica