Research Briefing

In The Latest Example Of Stimulus Funded Boondoggles, The Port Of Los Angeles Drops Taxpayer Dollars Upgrading Their Luxury Yacht

“With The City Going Broke You May Be Surprised To Find Out That Los Angeles Is The Proud Owner Of A Million Dollar Yacht And It Is About To Undergo Hundreds Of Thousands Of Dollars In Renovations At Taxpayer Expense.”  (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)

IN LOS ANGELES, STIMULUS FUNDS WERE SPENT ON A CITY YACHT, CREATING NO JOBS BUT WASTING TAXPAYER MONEY  

$489,000 Of Taxpayer Federal Stimulus Money “That Is Supposed To Go Create Jobs” Was Spent On The Port Of Los Angeles’ Luxury Yacht, The “Angelena.” “The port is using $489,000 in federal taxpayer stimulus money that is supposed to go create jobs, plus another $200,000 coming from the port — totaling $689,000 for new engines.” (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)

• The Money Was Spent Installing New Hybrid Engines On The Yacht Because The Old Engines “No Longer Meet California Emissions Standards.” “The engines have been removed because they no longer meet California emissions standards. They will be replaced by low-emission hybrid motors. The port is using $489,000 in federal taxpayer stimulus money that is supposed to go create jobs, plus another $200,000 coming from the port — totaling $689,000 for new engines.” (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)
• The Yacht Is Used For VIP Tours Of The Harbor, Many Of Which Have Nothing To Do With Port Business. “The port bought it in 1988. It is used for public relations tours of the harbor, which run about two hours long. They are free of charge for just about any group, like one we observed for students of Banning High. We obtained the ship’s logs for the past two years, which show cruises with as many as 48 passengers at a time. We also obtained the names of thousands of people who have been on-board. More than 4,000 took the cruise just last year. Some of the people do business with the port, but many have nothing to do with it.” (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)

“‘It’s Not Helping To Create Any Real Jobs,’ Said Tom Schatz With Citizens Against Government Waste (CAGW).” (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)

• “It’s A Big Waste Of Money Both For Taxpayers Across The Country And For Los Angeles Residents.” “‘It’s a big waste of money both for taxpayers across the country and for Los Angeles residents, who clearly aren’t all going to benefit from this and are spending money at a time when the city is more than $70 million in the red,’ Schatz said.” (David Goldstein, “Taxpayer Money Used To Maintain Million-Dollar Yacht,” KCAL-TV [Los Angeles, CA], 2/6/12)

STIMULUS MONEY HAS BEEN SQUANDERED ACROSS THE COUNTRY, DESPITE OBAMA’S PROMISES OF OVERSIGHT

THEN: Obama Claimed All Stimulus Projects Received Funding “Based Solely On Their Merits.” OBAMA: “And I just want to point this out -- there has never been a program of this scale, moved at this speed, that has been enacted as effectively and as transparently as the Recovery Act.  I’m grateful that Congress agreed to my request that the bill include no earmarks, that all projects receive funding based solely on their merits.” (President Barack Obama, Remarks On The One-Year Anniversary Of The Signing Of The Recovery Act, Washington, D.C., 2/17/10)

• NOW: Obama Thought “Even The Worst Kind Of Boondoggle” Was Stimulative. “For the Obama transition teams and their allies on the Hill, three questions loomed large in designing the package. The first was whether the proposed spending was economically stimulative: Did it save or create jobs, and thereby put money in people’s pockets? It turned out that economists believed almost any spending met this criterion. In a recession even the worst kind of boondoggle is stimulative, a fact that critics had a hard time comprehending.” (Jonathan Alter, The Promise, Simon & Shuster, 2010, p. 84)
  • In A Rush To Put Together A Stimulus Package, The White House Sacrificed Impact, Creativity And Competence. “With precious little time for innovative policymaking, it became a trade-off of speed over impact, speed over creativity, and, no doubt, speed over competence. Obama believed there was a steep cost to delay; if talks on the stimulus dragged into the spring or summer the recession would get much worse.” (Jonathan Alter, The Promise, Simon & Shuster, 2010, p. 85)

THEN: Obama Pledged That Joe Biden Would Lead An “Unprecedented Oversight Effort” For The $825 Billion Stimulus, “Because Nobody Messes With Joe.” OBAMA: “Here in Washington, we’ve all seen how quickly good intentions can turn into broken promises and wasteful spending.  And with a plan of this scale comes enormous responsibility to get it right. That is why I have asked Vice President Biden to lead a tough, unprecedented oversight effort – because nobody messes with Joe.” (President Barack Obama, Address To Joint Session Of Congress, Washington, DC, 2/24/09)

• NOW: There Have Been 298 Criminal Convictions Related To Fraudulent Spending Of Stimulus Funds. “To date, there have been 298 criminal convictions and $7.2 million in Recovery losses, according to our latest figures. Part of oversight, of course, is making sure that recipients comply with the law and publicly submit reports on their spending each quarter. When we started collecting data, recipients failed to submit 4,359 reports. This was unacceptable so the Board created what we describe internally as a “Wall of Shame,’’ a listing of those non-compliers on Recovery.gov.” (Press Release, “Devaney, In Final Column, Urges Taxpayers To Press Data Reforms,” Recovery Accountability And Transparency Board, 12/14/11)
• At The Energy Department Alone, Over 100 Criminal Investigations Have Been Launched Into The Way Stimulus Money Was Spent. “The Energy Department's inspector general has launched more than 100 criminal investigations related to 2009 economic stimulus spending. In written testimony prepared for delivery to the House Oversight and Government Reform Committee today, Inspector General Gregory Friedman said the investigations have involved ‘various schemes, including the submission of false information, claims for unallowable or unauthorized expenses, and other improper uses of Recovery Act funds.’” (Darius Dixon, “DOE IG: 100+ Stimulus-Related Criminal Probes,” Politico, 11/2/11)

$1.5 Million Of Stimulus Money Was Spent On Eight Homes That Ended Up Worth Less Than $1 Million. “In an effort to stabilize the city's real estate market, a federal stimulus program has spent nearly $1.5 million on eight Modesto homes that ended up being worth less than $1 million. Example: Taxpayers paid $223,641 to buy and fix up a foreclosed south Modesto house that was built in 1992. But when the city's 16-month renovation project was done, the home appraised and sold for only $114,000. The government lost $109,641 on that just completed deal. Taxpayers also have spent $109,494 to buy and renovate a 1948-vintage two-bedroom home in Modesto's airport neighborhood. That house has appraised for only $55,000, and a buyer has yet to be found. The federally funded Neighborhood Stabilization Program is being managed by the city of Modesto, which plans to resell an additional 18 or more rehabilitated homes this year.” (J.N. Sbranti, “Modesto Renovates Homes Expensively, Doesn’t Recoup Money In Sales,” The Modesto Bee, 1/14/12)

Stimulus Money Sent To North Carolina Schools Was Used On “Tickets For Movies, A Water Park, Fast Food, And Other Entertainment.” “In our review of documents, we found evidence that in addition to paying teachers a total of $17,270 in salaries, HAWS also used ESEA Title I funds to pay for STEP activities that included other salaries and field trip-related expenses, including tickets for movies, a water park, fast food, and other entertainment.” (“GAO Review Of LEA Controls Over And Uses Of Recovery Act Education Funds [Winston-Salem/Forsyth County Schools],” Government Accountability Office, 7/9/10)

72,000 Stimulus Checks Sent To Dead People. “The Social Security Administration sent about 89,000 stimulus payments of $250 each to dead and incarcerated people — but almost half of them were returned, a new inspector-general’s report has found. The inspector general found that about 72,000 payments were sent by electronic-transfer and as checks to people who would have qualified to receive them — had they still been alive. The report said that of these payments, about 55,000  were sent because the recipients had died recently, and the Social Security Administration had not been informed of their deaths by states, families or funeral homes at the time the payments were sent. The remaining 17,000 of the mistaken payments were attributed to the SSA failing to properly process death records that it did have.” (Louise Radnofsky, “Maybe You Can Take It With You: Stimulus Checks Sent To The Dead,” The Wall Street Journal’s “Washington Wire,” 10/7/10)

Stimulus Money Went To Study Young Adults Who Drink Malt Liquor And Smoke Marijuana. “The State University of New York at Buffalo won $390,000 to study young adults who drink malt liquor and smoke marijuana.” (Alexander Bolton, “Mark Penn’s Two Firms Awarded Millions From Stimulus For Public Relations Work,” The Hill, 12/09/09)

$54 Million In Stimulus Funds For Napa Valley Wine Train.  Jonathan Karl: “The Napa Valley wine train, to tourists a great way to see America’s most celebrated wine region, to others exhibit A in what’s wrong with the stimulus.” Sen. Tom Coburn: “What that is, is a situation where you see the wealthy or well connected get taken care of and the community suffers.” Jonathan Karl: “He’s talking about the Napa Valley wine train relocation project, $54 million stimulus dollars to build a new rail bridge, elevate and relocate 3,300 ft of tracks and put flood walls around the train’s main station.” (ABC News’ “Good Morning America,” 2/2/10)

$3 Million In Stimulus Funds For Turtles. “A report due to be released today by a Republican senator contends the Obama administration’s stimulus program is fraught with waste and incompetence – evidenced by a turtle crossing in northern Florida that will cost more than $3 million.” (Peter Nicholas, “Stimulus Program Fraught With Waste Report Says,” The Los Angeles Times, 6/15/09)