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Whistleblowers claim millions wasted in Klamath Project

The U.S. Office of Special Counsel has opened an investigation into the expenditure of $48 million in taxpayer funds in the Upper Klamath Basin following a scathing whistleblower declaration.

  • by David Smith, Siskiyou Daily News July 2, 2015


    The U.S. Office of Special Counsel has opened an investigation into the expenditure of $48 million in taxpayer funds in the Upper Klamath Basin following a scathing whistleblower declaration.

    The controversy is centered on the U.S. Bureau of Reclamation’s interactions with the Klamath Water and Power Agency,  an inter-governmental agency formed in 2008 by representatives of California and Oregon drainage districts within the Klamath Project.

    The project provides water to more than 200,000 acres of farmland in the region around Upper Klamath Lake and the Klamath River.

    In a declaration delivered by whistleblowers to the OSC, Reclamation is accused of entering into a contract with KWAPA that it was not authorized to enter into, and spent millions of dollars illegally in support of that contract.

    The declaration states that the contract’s stated objective was “to complete a study to examine the potential for stakeholder capability to manage market-based water supplementation programs … “but alleges that it has instead been used to funnel taxpayer funds to irrigators and to KWAPA functions.

    The whistleblowers state that originally, the contract was to last for a five-year period from 2008 to 2012 at a cost of $11.25 million. Since 2012, the contract has been modified 17 times, they state, with the contract now extended to 2023 with a new funding limit of up to $41.25 million.

    The declaration alleges that each of the many authorities cited in support of the contract do not actually do so, based mostly on the use of funds to offset irrigators’ idling of lands and loss of irrigation water.

    It is alleged in the declaration that the feasibility study cited in the contract has never been commenced, with funds instead being utilized to benefit only irrigators and not fish and wildlife, as required by some of the authorities cited in the contract.

    “In sum, the claim that the purpose of the Contract was to conduct feasibility studies authorized in the Klamath Basin Water Supply Enhancement Act of 2000 appears to be a charade masking the use of federal funds for an entirely different purpose,” the declaration states.

    In addition to alleging that BOR engaged in a contract not supported by statute, the whistleblowers claim that the agency also engaged in a gross waste of funds and abused its authority over the years it has allocated contract funds.

    “Both KWAPA and BOR have illegally used the federal funding not only for unauthorized purposes, but highly wastefully. They have not achieved, or even attempted to achieve, the purported objective of the Contract to produce a feasibility study, but instead have used the funds to purchase water and pay for land idling and to pay the expenses for the operation of KWAPA, as well as for other projects even further afield from the original purported Contract purpose. These actions amount to violations of law and regulations, gross waste of funds, and abuse of authority,” the declaration alleges.


    Claim against Bureau of Reclamation gains traction as Interior Department probes drought funds’ use

    Whistleblower case claims federal agency misappropriated funds
    by LACEY JARRELL, Herald and News 7/2/15
         An investigation into federal money funding drought mitigation programs is moving forward.

       The Public Employees Environmental Responsibility (PEER) group announced Tuesday that a whistleblower claim against the Bureau of Reclamation (BOR) has been referred to the Department of Interior.

       PEER filed the whistleblower disclosure in February on behalf of Todd Pederson, a BOR natural resource specialist, and Keith Schultz, a former BOR fisheries biologist. The suit alleges the BOR has misused funds designated to improve fish and wildlife habitat in the Klamath Basin.

       The claim asserts that the Klamath Water and Power Agency’s BOR-funded Water Use Mitigation   Program (WUMP) does not adhere to funding guidelines, which state monies must be used “for the direct benefit of fish and wildlife habitat.”

       In past years, irrigators participating in WUMP “bid” their application by providing a dollar amount per acre they would like to be paid in return for not diverting surface water to grow crops.

       The disclosure was filed with the U.S. Office of Special Counsel (OSC), an independent federal investigative and prosecutorial agency. The OSC reviewed the scientists’ disclosure and determined it presented a “substantial likelihood of validity.”  

       The Secretary of Interior, Sally Jewell, must respond to the OSC within 60 days, the release said.

       Louis Moore, the deputy public affairs specialist for the BOR Mid-Pacific Region office in Sacramento, said the agency plans to comment on the suit at a later date.

       “We are aware of the complaint and we are reviewing the information that’s being presented,” he said. “We take these things very seriously and want to be able to provide the appropriate information.”

       According to Hollie Cannon, executive director of the Klamath Water and Power Agency, the KWAPA board of directors first entered into a cooperative agreement with BOR to administer the WUMP in 2008. He said the board acted in good faith that BOR had the authority to do what was proposed.

       “During the time of administering   the WUMP, KWAPA has contracted with an independent auditor to conduct an audit each year. There been no findings of unauthorized expenditure by the auditor. In summary, KWAPA has complied with all requirements for the administration of federal funds,” Cannon said in a statement.

       According to the release, at least $48 million dollars has been paid in contracts with the Klamath Water and Power Agency (KWAPA). The payments began with a 2008 Reclamation contract for a feasibility study on whether water marketing could increase Klamath water supplies for the benefit of fish and wildlife. The claim asserts the initial five-year contract was amended 17 times.

        ljarrell@heraldandnews.com  ; @ LMJatHandN



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