Staff Reports
When Washington spends hundreds of billions of dollars in one law, as it just did in the misnamed "Inflation Reduction Act," the financial waste is hard to grasp.
Sometimes looking at how awful one program is can help contextualize the overall fraud and waste of a grant. In this scenario, it's instructive to look at HUD money (HUD).
The law gives HUD $1 billion to improve energy efficiency, water efficiency, and climate resilience in affordable housing. The monies will be granted under the department's Community Development Block Grant (CDBG) program, which is infamous for not requiring the utilization of its funds.
In trying to claim that money is a resource, the measure also contains crony leases to Wind Farms off the coast of Guam, the US Virgin Islands, and the North Mariana Islands — locations where some of the most egregious boondoggles in recent years have taken occurred.
To demonstrate this concept, consider the U.S. Virgin Islands power authority, the Water and Power Authority (WAPA): it takes wind leases and the millions in federal tax dollars tied to them, while at the same time it cannot pay its bills, e.g., it still owes money to its creditor, Vitol. Despite a surplus of cash, the new budget does not provide money to repay a creditor.
WAPA got at least $75 million in HUD funding for generators that, two years later, have not yet been connected to the electricity grid. This is because the USVI power authority bought generators without confirming they were compatible with WAPA's power infrastructure. Incompetence like this wastes money and bothers real people.
While these pricey generators sit idle, blackouts continue, the company misuses employee pension payments, and frustrations and questions mount. WAPA CEO Andy Smith has refused to explain the delays and lack of transparency.
Individually, waste, fraud, lack of responsibility, and incompetence are embarrassing; together, they are an outrage. Despite this, WAPA isn't eager to fix these issues. Worse, it arrogantly demands Washington support its costly switch to solar energy.
The latest HUD investment, which will flow through its ineffective CDBG program, should alert taxpayers about mismanagement.
While these are difficulties with WAPA, one must not forget that HUD gave all of this money, and it has no way to oversee its usage or control its abuse. These HUD grants are hazardous since the agency lacks control over them.
During my time at HUD, I rapidly realized the agency was ineffective in such instances. Bad government policy produces asymmetric risks that taxpayers and creditors must bear. Due to HUD's inefficiency, other organizations must act as watchdogs and direct legislative pressure and inquiry towards the subject.
The Biden administration has shown by irresponsible spending that it does not care about waste and fraud. It is also clear that the president does not believe WAPA's performance on existing projects should guide future grants or limit its access to new, ever larger money. This terrible behavior is unprofessional.
Instead of giving massive, unqualified grants to monopiles that can't pay their debts like WAPA, Washington should follow the advice set out in a 2022 letter to Congress by the Taxpayers Protection Alliance and demand WAPA meet its existing financial obligations — which total nearly $400 million — and overhaul its approach to managing and executing its projects to avoid similar issues in the future.
In this case, being uneducated and niggardly pays well.
Anything short of these measures should be seen as indication that the grant is a waste and the bigger bill is bad.
The preceding is a summary of an article that originally appeared on Daily Caller.
