Intel’s $8.5 Billion Grant Didn’t Prevent Mass Layoffs
August 19, 2024
Topline: President Joe Biden’s goal of creating jobs in semiconductor manufacturing is not going as planned.
Technology giant Intel announced that it will be laying off 15,000 workers, even though the company received an $8.5 billion grant from the federal government in March to hire American employees.
Key facts: The CHIPS Act of 2022 provided $39 billion in direct subsidies to tech companies to boost the U.S. chip manufacturing industry. Intel was the biggest beneficiary, and it also got an $11 billion loan meant to support factories in Oregon, Arizona, Ohio and New Mexico.
That wasn’t enough to stop the company from ditching 15% of its workforce.
“Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low,” Intel CEO Patrick Gelsinger said in a press release.
Gelsinger said that since 2020, the company’s workforce grew by 10% but annual revenue fell by $24 billion.
Before the CHIPS Act was passed, Gelsinger suggested the company would move jobs to Europe if it couldn’t secure U.S. federal grants.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Background: An opinion article in The Hill by Matt Cole and Chris Nicholson claims that “diversity, equity and inclusion” provisions in the CHIPS Act have limited its effectiveness.
Grants are awarded only to companies that “create opportunities for Americans from historically underserved communities” — even if that comes at the expense of profit margins. Cole and Nicholson suggest it’s part of the reason why Intel and Samsung have delayed building factories in Ohio and Texas, respectively.
Others have argued the CHIPS Act doesn’t allocate enough money to have its intended impact.
Because countries like China and Japan are offering similar subsidies, the CHIPS Act won’t be “nearly enough” to help the U.S. meet its goal of producing 20% of the world’s semiconductors by 2030, according to Paul Triolo of the Albright Stonebridge Group.
Triolo and others told the EE Times that a second or third CHIPS Act will be necessary. Perhaps that should be on hold until the first one shows positive results.
Summary: It’s good to stop U.S. jobs from going overseas but not if we’re creating jobs that disappear shortly after they get taxpayer funds.
NYC Paid $1.7 Million For Empty Hotel Rooms
August 20, 2024
Topline: New York City paid $1.7 million for nearly 10,000 nights at empty hotel rooms to maintain a “state of readiness” in case migrants eventually needed the rooms, according to a new NYC Comptroller’s Office audit.
Key facts: The city’s Department of Housing Preservation and Development (HPD) authorized the payment, even though its contract with healthcare distributors DocGo Inc. did not say it was allowed, auditors said.
DocGo’s contract — awarded through a no-bid process to give housing and support services to asylum seekers — allowed it to charge $170 per night for lodging, regardless of the actual hotel room price. This allowed DocGo to collect a $409,000 profit on the empty hotel rooms, auditors said.
It’s part of $4.7 million that auditors claim the city was overcharged. DocGo billed New York for extra security guards and social workers above the amount specified in their contract and for nearly 260,000 meals — which would amount to roughly five meals per day for each asylum seeker, the audit said.
Auditors asked city officials on Feb. 23 if they had given DocGo permission to hire extra security guards. They said they hadn’t — but on Feb. 24, the HPD chief of staff sent out a memo to “retroactively authorize” DocGo’s security guard spending from last year.
The audit claimed that another $6.3 million spent by the city should never have been paid because DocGo did not have invoices or other documentation to support the costs.
Overall, the audit said $11 million of the $13.8 million (80%) the city sent to DocGo in May and June 2023 should not have been paid. The city will not try and recoup the money, a spokesperson for DocGo told Bloomberg.
New York has spent another $168 million on the contract since then. Auditors speculated $134.5 million of that may have been spent improperly, assuming the 80% error rate remained.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Background: HPD officials are among the highest-paid employees in New York City.
Commissioner Adolfo Carrión Jr. earned $242,000 last year, and Chief Diversity Officer Ahmed Tigani earned $213,000, according to records at OpenTheBooks.com.
Supporting quote: Liz Garcia, a spokeswoman for Mayor Eric Adams, told Bloomberg that the audit “fails to acknowledge key facts that do not reinforce a predetermined, politically convenient narrative.”
She said Adams “put people’s wellbeing before paperwork” and that the city “will continue to pay our partners for the work they do on behalf of the city, particularly amidst a humanitarian crisis.”
Summary: Perhaps New York City taxpayers should be able to leave their money in their own bank accounts to have a “state of readiness” to spend it on their own families.
Ohio State Fair Renovation Costs $386 Million — And That’s Just Phase One
August 21, 2024
Topline: A ticket for the legendary Ohio State Fair only costs $12, but local taxpayers will spend far more, whether or not they actually attend.
Republican Gov. Mike DeWine has already secured $386 million for his “master plan” to renovate the fairground, and Cleveland.com says the project “could conceivably cost billions” before its completion in 2050.
Key facts: The Ohio Expo Center is mainly known for the state fair that has been held since 1850 and drew visitors from all 50 states this year, but the center is open year-round for events.
Taxpayers will help transform the center with renovations that include a new “Town Square” to showcase Ohio’s “agriculture and natural resources.” The “Multi-Purpose Agricultural Education Facility” will feature 24 pickleball courts and dozens of other amenities. And more funds will go toward “vital unseen underground improvements.”
It’s a huge jump from previous funding. The state legislature allocated just over $10 million to fund the fair this year, and even that was twice as high as 2022.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Background: Over 1 million people visited the Ohio State Fair in 2023, meaning it would take about $386 from each of them to fund the state’s grand construction plans for the fairground.
The state’s Exposition Commission sent paychecks to 660 people last year.
Most of those were seasonal workers for the fair, but there were still 51 employees who made between $40,000 and $172,000 last year, according to records at OpenTheBooks.com.
Summary: Axios Columbus joked in 2022 that DeWine “loves fairs more than (former Ohio State football coach) Woody Hayes loved winning.” That’s fine, but DeWine should leave taxpayers’ wallets out of it.
Throwback Thursday: Grateful Dead Used $615,000 Grant On 'Free' Museum
August 22, 2024
Throwback Thursday!
Topline: The Grateful Dead were one of the biggest symbols of the 1960’s counterculture that rebelled against “the establishment” and federal bureaucracy. But even they couldn’t keep their hands out of taxpayers’ wallets, using a $615,000 federal grant to open a museum celebrating their career in 2010.
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. Projects that he couldn't stop, Coburn included in his oversight reports.
Coburn's Wastebook 2010 included 100 examples of outrageous spending worth more than $11.5 billion, including the money spent on Grateful Dead memorabilia — which would be worth $886,000 today.
Key facts: The Grateful Dead Archive at the public University of California at Santa Cruz displayed instruments, T-shirts, fan mail and more from the jam band’s legendary career. Most of the credit went to Eileen Law, a friend of the band and their “keeper of stuff,” as their publicist put it.
Christine Bunting, one of the library’s directors, told The New York Times that the band ignored offers from private institutions and chose a public university because “the whole idea of it being public and free was important to them.”
Entry into the museum was only free because the federal Institute of Museum and Library Services helped out.
“Deadheads” didn’t see the problem. Sociologist Rebecca Adams told the Times that there were “millions” of academic projects scholars could complete with the archive. The museum was also a hot topic at the annual meeting of the Grateful Dead Scholars Caucus.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Summary: The Grateful Dead have sold more than 35 million albums worldwide. Maybe they could have paid for their own archive.
Rental Car “Mistake” Costs Baltimore Taxpayers Millions
August 23, 2024
Topline: A behind-the-scenes mess has stopped the City of Baltimore from finding a new rental car dealer, forcing it to extend its current contract five times — most recently because an employee “mistakenly canceled” the city’s advertisement for new dealers.
Key facts: Baltimore signed a contract in 2016 with Enterprise, Nextcar and Acme Auto Leasing to provide cars for police officers, city council employees and more.
The contract expired in July 2022 without a new agreement in place. The procurement department asked officials to extend the contract while it looked for a new supplier.
That didn’t work. In April 2023, the procurement department asked officials to reject all applicants for the new rental car contract and extend the current one while it tried again. The same three companies had applied for the job, but none of their offers were “in the best interest of the city,” the department said.
The city extended the contract again and again while the procurement department tried, unsuccessfully, to find a new car dealer.
Each time, the cost of the cars rose — from a starting point of $2 million per year in 2016 to the current price of $4.4 million per year.
On Aug. 7, the city’s Board of Estimates unanimously approved another one-year extension. Someone at the city had accidentally deleted the procurement notice, and Baltimore car dealers could not apply to replace the current contract.
“Last year it looked like the requisition was canceled unintentionally and nobody picked up on it,” Chief Procurement Officer Adam Manne said. “We are comfortable that by the end of this contract extension, if not before, we will have a new contract in place.”
The contract has cost the city $34.3 million since it was first awarded in 2016 — including $12.8 million since officials started looking for a new supplier in 2022.
Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Background: The error is potentially embarrassing for the city, and no one seems willing to fess up to the mistake.
City documents say only that “the agency” made the mistake, but it’s unclear whether that’s the police or the procurement department. The Comptroller’s Office told OpenTheBooks they “believe” the police were responsible. The police department did not return a request for comment.
Manne did not offer an explanation while speaking to the Board of Estimates this August.
The city has also not disclosed which employees are driving its cars.
OpenTheBooks filed an open records request in January for information on Baltimore’s take-home vehicles. It was ignored until OpenTheBooks asked again in February; the city said they “didn’t recall” seeing the request and would produce the information.
Asked for the info a third time in June, within hours, the city produced a spreadsheet listing only 12 take-home cars, even though the city's own websitesays it operates over 5,600 vehicles.
OpenTheBooks asked why thousands of cars were missing from the data, but the city did not answer.
Summary: Baltimore supposedly has one of the top-performing fleets in the country, but there’s mismanagement and a lack of transparency surrounding its spending.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.