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Pork or Protection? Follow the money in your community to fight terrorism

By G.W. Schulz Center for Investigative Reporting

Nearly $70,000 worth of surveillance gear left unused in its original packaging by a county north of San Francisco. A $2,300 plasma TV for university cops. More than $1.3 million spent without maintaining proper documentation to show where it went. Millions more in bomb-disposal robots and new communications systems bought from suppliers who weren’t forced to compete.

The biggest mistake any reporter could make now is to assume that the best homeland security stories already have been done, as if that costly legacy merely faded away with the Bush administration.

A September story published and broadcast by the Center for Investigative Reporting and its new nonprofit California Watch showed there are plenty of opportunities to expose mismanagement and excess.

Waste, fraud and abuse still afflict America’s newest bureaucracy, the Department of Homeland Security. Special interests continue to rule Washington, and the spigot of spending on security initiatives flows freely. Federal homeland security grants, fortified by President Barack Obama’s plan to save the U.S. economy, are just the beginning.

Local emergency managers, firefighters and police departments – each with considerable lobbying power at City Hall and on Capitol Hill – insist to news organizations that federal anti-terrorism grants have slowed to a trickle and communities are left with too few resources to prepare for catastrophe or fight terrorists.

That’s compared to the breathtaking sums Congress appropriated to cities and states in the years immediately following Sept. 11. Investigators from the Government Accountability Office and the Homeland Security Department’s inspector general say that despite $29 billion in grants distributed since 2001, the federal government can’t fully explain how much safer the spending has made America.

While there are critics of extravagant grant programs, the funds have nonetheless become an entrenched form of government pork that policymakers are reluctant to give up, something the 9/11 Commission warned against in its final report on the hijackings.

Now there are even greater reasons to examine the grants since the passage of Obama’s economic recovery package. That colossal wave of taxpayer dollars is being funneled to state and local coffers through existing grant programs, including those created to protect the homeland. Many have experienced years of dysfunction described in audits and other documents that are busily collecting dust in state agency offices.

Homeland security officials in May 2009 announced an injection of a half billion dollars of Recover Act funds into just three grant programs designated specifically for port and transit security and new fire-station construction. That money was in addition to the $1.3 billion for such projects Washington already had awarded during the fiscal year – grant programs that have not been deeply probed by journalists the way others have.

Focus on your state

When the Center for Investigative Reporting created a partnership with the Center for Public Integrity in September 2008 with funding from the Open Society Institute to report on homeland security, we knew that much of our attention would have to be turned from the federal government to the states. (A.C. Thompson, now a reporter at ProPublica in New York, helped get the project off the ground. Reporter Sarah Laskow of CPI took on congressional oversight and other subjects inside the Beltway.)

The governor of each state is responsible for designating an office to distribute and oversee readiness grants, which means Washington has largely distanced itself from the responsibility.

So we set out to request from every state all electronic information we could get showing where the money has gone, hoping to later create a national database. That proved to be an arduous task. Emergency management officials in Illinois told us in a response letter: “The agency has conducted a search of its files and has found the information included herein.” The information included herein was just three sheets of paper for a state that’s been given more than $525 million in grants.

Some states said they had only mountains of paper records that would cost thousands of dollars to duplicate. Others claimed that if we publicized the brand of $175,000 bomb robot they purchased, terrorists planning an attack would use such insight to their advantage.

But we were successful in getting some states to create convenient digital spreadsheets that didn’t previously exist. They listed expenditures by type of equipment, cost per item, jurisdiction, grant year and more. With such files, we could answer all kinds of new questions. We noted that communities in Louisiana together bought several dozen new Dodge Durangos, each categorized as response equipment for threats posed by chemical, biological and nuclear agents. Other times, we obtained records after putting up a fight and appealing denials.

Before submitting your own open-records request for grant spending information, consider first seeking a list of those programs that are available or have been in the past. There are lots of relatively obscure grants a state may be in charge of, and some have disappeared over time while others were created anew. California last year received $5.7 million from the Department of Homeland Security for boating safety and crisis counseling.

The language in your letter might look something like this: “I am seeking access to lists documenting all equipment and services invoiced and paid for under the [add grant programs here separated by semicolons] received from the Department of Homeland Security and administered by [your state].”

There’s another key component you should include. Request “any and all financial, management and performance audits and/or other reports gauging the effectiveness and administration of [your state’s] receipt of homeland security grant funding since 2001.”

Examine the site visits

Each state is required to carry out so-called “site visits” in which officials travel to cities and towns, inspect equipment to make sure it’s in good order and check for the proper maintenance of invoices. Many states still have not begun this process, pointing to staff shortages. That in itself should cause concern about oversight.

If purchases aren’t being documented electronically and the state also isn’t inspecting gear, how can officials efficiently keep track of billions of dollars worth of spending? Site monitoring reports may also not be very informative. Some states are compiling little more than checklists.

Site-visit reports in California, on the other hand, revealed scores of problems in hundreds of pages of records we obtained. Counties couldn’t produce paperwork needed to verify spending, or they had faulty accounting systems that led to excessive charges. Pricey gear was not deployed, or some purchases just didn’t make sense, like one county’s attempt to buy a lawnmower.

We traveled to the state capitol with a portable scanner and retrieved hundreds more pages of records that explained how communities responded to the findings. In one letter, a local sheriff described how his county hired a contractor to manage grants, but it took two years to discover he had little knowledge to perform the job. We also found in grant files CDs that contained photos of purchased gear, which we saved on a laptop and later used for a multimedia feature.

Newspapers, radio and television stations, and news Web sites across the Golden State helped to publish and broadcast our resulting main story. It’s online here. We even tailored individual versions by including content specific to a news organization’s coverage area. Online, we posted an interactive map showing ranges of how much each county received in grants and lists of where the money went. In a sidebar, we profiled a California company that specialized in building expensive incident-command vehicles but went bankrupt after becoming entangled with a convicted fraudster.

An additional key document you can use for a roadmap of not just homeland security grants but also stimulus funds is the A-133 single audit. IRE has touted the audits for years in training sessions. Any entity that receives more than $500,000 in federal grants has to undergo this basic financial audit. Your state government faces one every year that reviews how it passes through federal funds to local grantees or uses the money for itself. Then your city and county each will have its own yearly single audits, as will offices within them, such as the local police department and sheriff.

It’s important to understand that some homeland security grants and other types of federal assistance go directly to local communities and independent entities such as public transit, port or bridge authorities, universities and nonprofits. You can identify them online in the Federal Audit Clearinghouse. Consider obtaining the last five years of single audits from large government bodies or nonprofits across your coverage area for a look at poorly performing programs that are now being pumped full of new stimulus cash.

Around the country we’ve seen auditors question millions of dollars in spending, disclose investigations into potentially criminal conduct and indicate whether the same problems are occurring every year.

Finally, remember that the Department of Homeland Security isn’t just managing anti-terrorism grants. The number of presidentially declared disasters has skyrocketed in the last two decades, not only in places such as Louisiana and Florida, so your community’s handling of assistance from FEMA will appear in single audits. A report in Kentucky recently disclosed $530,000 worth of contracts awarded to the business partner of a local emergency manager. The contractor later became his wife.

Consider other angles

How else can you report on homeland security?

Request from the local office in charge of homeland security grants a list of all companies and consultants your community has used to buy equipment or services, particularly local businesses. Then call these suppliers and ask how procurement is going. Are purchases competitive? Does a well-connected contractor have an unfair advantage? Are officials making bad investments?

Is your community buying new public safety radios? Was Motorola or a competitor hired to design the system that would later be put out to bid? Is anyone surprised when that same company wins the contract to build the system?

We mentioned site-visit reports done by state officials. But the Department of Homeland Security is supposed to be doing its own by sending FEMA personnel to the states for a look at equipment and records. This activity is separate from grant audits the inspector general for DHS has completed in recent years. Ask your state if the Homeland Security Department has done any site monitoring there, and if so, request reports documenting it.

Ask your community for all inventory logs containing equipment purchased with grants. Under federal rules, they should be richly detailed, even listing the condition of the gear. Does anything just defy logic, such as the small town in Georgia that bought “crowd-control devices” when its total population hardly constituted a crowd?

Contact us in case we’ve already obtained spending records and other documents about grants used in your area that we can make available, something we’ve done for numerous reporters around the country in the past year. More generally, we may be able to help with an investigative strategy. There are plenty of homeland security stories to go around, and not just about federal grants.

G.W. Schulz joined the Center for Investigative Reporting in 2008. He now knows far too much about night-vision goggles.

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