New Ships Could Cost Billions More Than Navy Expects
May 6, 2024
Topline: The Congressional Budget Office estimates that an upcoming shipbuilding project will cost $6.2 billion to $7.8 billion, roughly two to three times more than the Navy claimed in its plan submitted to Congress.
Key facts: The CBO’s estimate assumes the Navy will build 18 medium landing ships. Military officials have said they might buy up to 35 boats, which the CBO says could cost up to $15 billion.
The boats will be used to deploy Marine Corps soldiers and missiles in the Western Pacific.
The Navy estimated that each ship will cost $150 million, but the CBO predicts they will cost up to $430 million each.
The Navy is not even sure how much the boats will weigh, which is why the CBO provided a broad price estimate.
The CBO said calculating the estimate is a “challenge” because the Navy has not built many similar boats in the past. It did not explain why the Navy’s estimate is so much lower.
Despite the high cost, the ships are not expected to have the strong hull and complete safety features of a typical military boat. That would cost an extra $2 billion to $3 billion.
The Navy has been spending money on research for the ships since 2021 but none has been built yet. They said the first boat would arrive in 2023, but it’s been delayed to 2025.
This year’s budget request contains $268 million for the program.
Critical quote: “Many facets of the program remain uncertain, such as the number of ships the Navy wants to buy, as well as the design and capabilities of the ship,” the CBO wrote. “Equally uncertain is the overall cost of the program, because the Navy’s estimates have varied widely in its last three shipbuilding plans and budget submissions.”
Summary: The Pentagon’s weapons projects often take more time and money to complete than expected. It’s important that projections are not flawed before development even begins.
Waste of the Day: Local Mayor Bills Taxpayers For Vengeful Lawsuit
May 7, 2024
Topline: No politician relishes the idea of being criticized in public, but most accept it as a basic part of free speech.
But a mayor in New Mexico recently banned the public from speaking at her City Council meetings — and then used $24,000 of taxpayer funds to sue her political rival for questioning the decision.
Key facts: Mayor Diana Murillo of Anthony, New Mexico changed the city’s Open Meetings Act last summer to stop the public from participating in council meetings. She said she would allow public comments again once “law and order” were restored, but, she says, that has yet to happen.
Mayor Pro-Tempore Gabriel Holguin blasted Murillo’s decision as an attempt to “silence” her critics and helped inspire a lawsuit from 15 members of the public to try and remove her from office.
Murillo retaliated by suing Holguin for abusing his power and causing “chaos” at the city. She also alleged that Holguin used city funds on printing and diesel fuel, though Holguin said he doesn’t drive a diesel vehicle.
Murillo filed the lawsuit through the city and paid for it with taxpayer money. But the city’s Board of Trustees voted 3 to 1 to make her repay the expenses.
Supporting quote: As of March, Murillo still disagreed that she should have to pay her own legal fees.
She told KFOX14 that “whatever was spent on that was not my decision. It's the city and I'm not going to pay something that doesn’t belong to me, it’s nothing to do with me but that’s what was told and it’s regarding the city of Anthony against Mr. Holguin.”
Critical quote: This January, the city board unanimously passed a nonbinding “no confidence” vote on Murillo’s leadership. They agreed in a resolution that the mayor’s administration is "a detriment to the well-being of the city, its residents and city employees” that is “utilizing city funds in an unethical matter” by suing Holguin.
Summary: It seems as though Anthony’s politicians should handle their office drama behind closed doors, without putting thousands of taxpayer dollars at stake.
California Didn’t Track Effects Of $24 Billion Homelessness Spending
May 8, 2024
Topline: California spent $24 billion in the past five years to address its homelessness crisis, but no one is sure if the huge investment had any impact.
Key facts: A new state audit found that the California Interagency Council on Homelessness stopped tracking whether its programs were working in June 2021 and has no consistent way of measuring the outcomes of its spending.
Only two of the five programs analyzed in the audit are “likely cost-effective.” The other three have not collected enough data to prove that their initiatives are useful.
Auditors warned in February 2021 that the lack of data could “hamper the effectiveness of the State’s efforts to end homelessness.”
In September 2021, the state legislature ordered the California Interagency Council on Homelessness to make its financial data publicly available, but lawmakers never specified how often that should happen. The Council has only reported its data once since then.
Until new data is released, “the State and its policymakers are likely to struggle to understand homelessness programs’ ongoing costs and achieved outcomes,” auditors wrote.
Auditors said the data that does exist may be inaccurate. The Council runs several homelessness programs, and many of them are not required to report all of their spending to the state.
There’s also no consistent method for reporting results, making it difficult to compare programs that use different metrics.
The audit praised the efficiency of a $3.6 billion program that turns hotel rooms into affordable housing and another program that gives families up to $22,000 to stop them from losing their homes.
There are over 181,000 homeless people in California, 28% of the total U.S. homeless population. That’s up from 118,000 in 2013.
Critical quote: State Assembly Republican Leader James Gallagher laid the blame on California’s governor.
"This is standard Gavin Newsom – make a splashy announcement, waste a bunch of taxpayer money, and completely fail to deliver," Gallagher told Fox News. "Californians are tired of the homeless crisis, and they’re even more tired of Gavin’s excuses. We need results – period, full stop."
Supporting quote: Auditors blamed the Council for not tracking the state’s homelessness services, but a spokesperson for Newsom told Fox News that it’s local governments who “are primarily responsible for implementing these programs and collecting data on outcomes that the state can use to evaluate program effectiveness.”
Summary: It will take a huge investment to fight California’s homelessness crisis, but it’s equally important that the money is spent efficiently.
Throwback Thursday: Congressman Tries to Add Garage to Empty Building
May 9, 2024
Throwback Thursday!
Topline: In 2008, the U.S. Department of Transportation stopped Rep. Paul Kanjorski (D-PA) from investing $5.6 million to build a parking garage in a vacant office building named after himself, but not until millions had already been poured into the building.
Kanjorski’s justification? Federal grants are “free money,” as he repeatedly told CBS News.
That’s according to the “Wastebook” reporting published by the late U.S. Senator Dr. Tom Coburn. For years, these reports shined a white-hot spotlight on federal frauds and taxpayer abuses.
Coburn, the legendary U.S. Senator from Oklahoma, earned the nickname "Dr. No" by stopping thousands of pork-barrel projects using the Senate rules. Coburn included projects that he couldn't stop in his oversight reports.
Coburn's Wastebook 2008 included 65 examples of outrageous spending worth more than $1.3 billion, including Kanjorski’s blocked earmark — which would be worth $8.3 million today.
Key facts: Members of Congress often earmark money for projects with a tangential personal connection, such as universities they attended or libraries that house their Congressional papers.
Kanjorski was less discreet. He used $3 million of federal funds in 1993 to help open the Kanjorski Center in his hometown of Nanticoke, Penn. — population, 10,600. That money would be worth $6.6 million today.
The office building struggled to keep its first few tenants. An insurance company left in 2005 because there wasn’t enough space, allegedly because Kanjorski wouldn’t let them expand without buying property owned by his relatives.
The city spent $15,000 per month to maintain the building while it was vacant.
Kanjorski had a solution. He placed an earmark in the 2005 federal budget to build a parking garage in the empty building, hoping to convince a local community college to lease the space.
That violated federal law because the garage was not for mass transit, but Kanjorski didn’t mind. He told CBS News that "I don't think the rule should have any attention paid to it. Because in Congress we have our own rules."
The earmark was signed into law and went unchallenged until 2008, when Department of Transportation officials put their foot down and blocked the project before the funds were spent.
Kanjorski was left confused by the decision. When reminded that the garage would have been a burden for taxpayers, he argued that, "It is the taxpayers of the United States' money, but it doesn't cause any difficulty to the community to take the money."
Summary: OpenTheBooks’ auditors often find politicians who treat taxpayer money like an unlimited resource, but Kanjorski is perhaps the first one to readily admit to that philosophy.
Federal Government Loses Up to $521 Billion to Fraud Annually
May 10, 2024
Topline: Arkansas Gov. Sarah Huckabee Sanders once stood behind one of the world’s most visible podiums as former President Donald Trump’s press secretary.
Apparently she misses the setup. Sanders spent $19,000 of taxpayer money to buy a custom lectern and potentially broke the law in doing so, according to a new state audit.
Key facts: The actual podium only cost $11,575 when it was purchased in June 2023. The rest of the money was for shipping, a travel case and a $2,500 “consulting fee.”
The Republican Party of Arkansas eventually reimbursed the state for the expense.
But the state audit reinforces prior reports that Sanders’ office never intended to pay back the money. They allegedly handwrote the words “to be reimbursed” on the invoice months later, which would be illegal tampering with public records.
The audit also found that Sanders’ office paid for the podium in advance with a state credit card, incurring a $554 processing fee. Arkansas law requires state agencies to pay for products after delivery and use a purchase order so spending can be tracked in the state’s digital accounting system.
Because the podium was never entered in the accounting system, auditors concluded that the podium is still state property, and the Republican Party reimbursement is invalid.
Sanders says the credit card was used by mistake and argues that her office is not a “state agency” and so those laws don’t apply. Arkansas Attorney General Tim Griffin agreed in an unofficial statement.
The audit also revealed that Sanders’ office got quotes for other podiums costing as little as $800 but chose the luxury option anyway. The same podium without customizations can be bought for $7,000.
Her office shredded a document with details about the podium’s shipping info and size. Staffers told auditors it was a mistake and provided a replacement copy.
Supporting quote: For better or worse, Sanders seems to be enjoying the ordeal.
She recently posted a dramatic video of her podium billowing smoke and daring lawmakers to “Come And Take It” while Jay-Z’s “Public Service Announcement” blares in the background.
Yes, it’s as bizarre as it sounds — and was presumably produced by someone working on a taxpayer salary.
Background: Sanders makes almost $159,000 as governor. Her office paid $3.3 million in salary to 42 staffers last year, according to records at OpenTheBooks.com.
Summary: If Sanders is going to use Jay-Z to defend her wasteful spending, maybe she should “reintroduce” herself to the fiscal conservatism of her own political party.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.