[env-trinity] Klamath Scandal, Allegations of Slush Fund, Investigation Underway

Tue Jun 30 15:36:55 PDT 2015

Whistleblower allegations that the Bureau of Reclamation sent at least $48 million tagged for helping the Klamath River Basin's fish populations to agricultural irrigators instead likely point to a violation of the law, according to the U.S. Office of Special Counsel.The Office of Special Counsel, an independent investigative agency, is ordering the Interior Department to respond to the allegations within 60 days.
E&E Daily

RECLAMATION: 

Whistleblowers say Klamath water bank became irrigators' slush fund 
Annie Snider, E&E reporterPublished: Tuesday, June 30, 2015 Whistleblower allegations that the Bureau of Reclamation sent at least $48 million tagged for helping the Klamath River Basin's fish populations to agricultural irrigators instead likely point to a violation of the law, according to the U.S. Office of Special Counsel.The Office of Special Counsel, an independent investigative agency, is ordering the Interior Department to respond to the allegations within 60 days.At issue is a contract awarded by Reclamation for management of a water banking program aimed at supplementing water supplies in the Klamath Project in southern Oregon and Northern California.A pair of biological opinions relating to endangered coho salmon and suckers have limited the amount of water available for irrigators from the Klamath project in recent years. The water banking program, called the Water User Mitigation Project, is aimed at making more water available by paying for land idling, substitution of groundwater for surface water, direct pumping and offstream storage.In 2008, Reclamation awarded a contract for managing the water banking program to the Klamath Water and Power Agency (KWAPA), a newly formed intergovernmental agency made up of representatives from California and Oregon irrigation districts, according to a statement from two Reclamation biologists who are crying foul. Those biologists are Todd Pederson and Keith Schultz.According to their statement, made through the watchdog group Public Employees for Environmental Responsibility, that contract's objective was to complete a feasibility study of whether stakeholders could take over the water banking program. They also say the contract claims the water will be used "to meet Project requirements for the direct benefit of fish and wildlife habitat."But they say that there is no evidence that any of the water from the program has been used to benefit natural resources, and that there is never likely to be a feasibility report."There is no evidence that any of the funds under the Contract, or any of the water provided by means of the Contract, has been used to benefit National Wildlife Refuges or fish and wildlife habitat in any way," they state. "In fact, the unsustainable groundwater pumping that has occurred under the Contract reduced the total amount of water in the Klamath Basin, to the detriment of fish and wildlife, including endangered species."When KWAPA sought a three-year extension to the contract in 2012, after $30 million had been spent on the program, the feasibility study had not even been started, the biologists say. They said KWAPA maintained it had been hindered in doing the study by the fact that there had been only one year of water shortage since it received the contract.The scientists argue, though, that a study into whether nonfederal stakeholders could take over a water banking program should not require a water shortage in order to be completed."The failure to complete a feasibility study was not merely due to hydrologic patterns, but to the terms of the Contract itself," they say. "Although the contract calls for a study, it reveals that the real function of the Contract is to identify and purchase contracts for options to deliver water to the Klamath Project ... and thereby provide tens of thousands of acre-feet of water to the Project for each year of the initial contract."Most of the money awarded under the contract, the scientists say, was used to buy water, pay for land idling, compensate irrigators who did not receive irrigation water, and pay well owners whose wells were depleted by groundwater pumping under the contract, they say.The contract also covered overhead expenses for KWAPA, which they say had existed for only a few months before the contract was awarded and at that time had no office space, staff or other infrastructure -- expenses that they say were covered by the Reclamation contract.They argue that the contract was a slush fund for irrigators, with no benefit to the public, and that Reclamation had no legal authority to enter into it in the first place."Federal funds have been wasted on stop-gap, unsustainable measures that only worsened the long-term problem, and served only to put money in the pockets of irrigators for the short term," they state. "The expenditure of these funds has diverted large amounts of time and money from the work needed to find long-term solutions to water scarcity in the Klamath Basin."Paula Dinerstein, PEER senior counsel, said federal assistance agreements like the KWAPA contract, where money is given to a nonfederal entity to carry out a public purpose, are different from procurement contracts where the government purchases a good or service. Assistance agreements require that there be a public purpose, and require that the contract cite the laws that authorize it.Here, she said, none of the statutes cited in the contract authorizes the kind of work that was done under it."If Congress chose to, they could certainly say, 'We want to give money to all these poor farmers who are in a drought' -- but they didn't," Dinerstein said in an interview."Coming up with this way to first of all create this organization, and then give it all the money for all its salaries, all its fringe benefits, all its equipment ... and then give all this money -- money translated into water -- just to certain irrigators was something [Reclamation] wanted to do," she said.KWAPA's director was unavailable for comment this afternoon.In a statement to E&ENews PM, Therese O'Rourke Bradford, area manager for the Bureau of Reclamation's Klamath Basin Area, said: "The Klamath Basin Area Office has just been made aware of the referral made through the news release by EE News. To our knowledge the Office of Special Counsel has not yet contacted the Department of the Interior or Bureau of Reclamation regarding the referral. Reclamation takes these complaints seriously, and will cooperate fully with the Department's investigation."Click here for the scientists' statement.Click here for the Office of Special Counsel letter.Twitter: @AnnElizabeth18 | Email: asnider at eenews.net  For Immediate Release: Jun 30, 2015
Contact: Kirsten Stade (202) 265-7337
FEDERAL PROBE INTO KLAMATH IRRIGATOR CONTRACTS ORDERED
U.S. Special Counsel Directs Interior to Justify Legality and Purpose of Payments Posted on Jun 30, 2015 Washington, DC —Backing charges by whistleblowers, the U.S. Office of Special Counsel is ordering the Secretary of Interior to explain how funds earmarked to help drought-stressed Klamath Basin fish populations instead ended up in the hands of irrigators, according to a letter released today by Public Employees for Environmental Responsibility (PEER). The Secretary is charged with responding to the Special Counsel within 60 days.The issue arises from at least $48 million dollars in contracts the U.S. Bureau of Reclamation has with the Klamath Water and Power Agency (KWAPA). Two Bureau biologists became increasingly concerned about the legality of these payments and filed a whistleblower disclosure with the U.S. Office of Special Counsel (OSC) through PEER. In a letter to the biologists dated June 26, an OSC attorney wrote:“We have concluded that there is a substantial likelihood that the information that you provided to OSC discloses a violation of law, rule or regulation; gross mismanagement; and a gross waste of funds.”

The thrust of their disclosure is that Bureau funds provided to KWAPA intended “for the direct benefit of fish and wildlife habitat” were diverted to defray expenses of this association of Klamath Project irrigators, including their salaries, fringe benefits, office space, equipment and travel. Further, funds were also used in ways detrimental to Klamath Basin fish, such as pumping large amounts of groundwater to supply select irrigators during drought years until private wells went dry, thus spurring new and deeper wells to tap shrinking groundwater supplies. All of these expenditures were made without any apparent legal authority to do so.

“The Bureau of Reclamation allowed millions of taxpayer dollars to be used as a slush fund for favored irrigators,” stated PEER Senior Counsel Paula Dinerstein who filed the scientists’ disclosure. “It appears no one asked what the legal justification was for paying public funds to benefit a private association.”These 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. That initial five-year contract was amended 17 times and ultimately extended through 2023, at a cost several times the original estimate. The feasibility study was never completed.The Office of Special Counsel is a whistleblower protection agency charged with, among other things, reviewing federal employee reports of wrongdoing and determining whether they evidence a “substantial likelihood of validity.” It has made such a finding in this case. Now, by law the Special Counsel has the power to direct the Secretary of Interior to conduct a formal investigation into these violations of law as well as gross waste and mismanagement. The Secretary’s report is due back in 60 days.The whistleblowers may review and comment on the final official response. At that point, the Special Counsel makes an independent decision as to whether the agency response is complete and reasonable, transmitting those findings to the President and Congress. If the violations are confirmed it could result in reimbursement of unauthorized payments as well as discipline of responsible Reclamation officials.The Klamath Project, which the Bureau operates, constitutes the principal water works in Northern California and southern Oregon providing water from Upper Klamath Lake and Klamath River to more than 200,000 acres of cropland. In recent years, this watershed has been crippled by a series of droughts.###Read the Special Counsel letter
Look at the scientists’ disclosure  

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