Thursday, March 31, 2011

NTIA & RUS Say Unspent Broadband Stimulus Funds Go Back to Treasury

It Isn't Really About the Money to Treasury...The Perception and Reality of Grant Fraud

StimulatingBroadband.com 03/31/2011 San Francisco - The two agencies of the Obama Administration tasked by Congress with management of the $7.2 billion broadband stimulus program state explicitly that unspent funds from the initiative will be returned to the U.S. Treasury.

The agency statements first published here largely remove a rhetorical argument from leaders of the Republican Majority of the House Energy and Commerce Committee who have voiced criticism of the program.

Chairman Greg Walden (R-OR-02) of the Subcommittee on Communications and Technology will hold a Committee markup session tomorrow on his bill to mandate the return to Treasury of unspent Recovery Act broadband funds. The session is scheduled to immediately follow the broadband stimulus program oversight hearing which Walden will gavel open at 10:30 AM (ET). The mark up will work off a new staff draft of the initial legislative proposal  circulated by Walden the first week in February. 

The two lead managers of the Obama Administration’s broadband stimulus program – Jonathan S. Adelstein of the U.S. Department of Agriculture, and Lawrence E. Strickling of the Commerce Department -- will be the witnesses at the Walden hearing tomorrow morning.

Adelstein Statement for RUS
“We cannot use any of the returned funds,” said Administrator Adelstein in a telephone interview with this publication. Mr. Adelstein, a former FCC Commissioner appointed by President Bill Clinton, is the Administrator of the Rural Utilities Service (RUS) of the U.S. Department of Agriculture.  “All funds coming back will be returned to the Treasury,”

Mr. Adelstein’s agency is now disbursing $3.5 billion in stimulus grant and loan awards for 320 projects in rural areas. We had referenced the handful of publicly reported stimulus “give backs”, and asked if RUS managers thought such monies could be “reprogrammed” to finance the ongoing broadband efforts of USDA.

Strickling Statement for NTIA
Yesterday afternoon Administrator Strickling’s agency, the National Telecommunications and Information Administration (NTIA) released a statement to this publication saying, “Funds that are declined by the grantee are returned to the Treasury. NTIA does not have the authority to make new BTOP awards or otherwise to obligate these funds.”

NTIA is working to spend some $4 billion on 233 infrastructure projects as its part of the Obama Administration broadband stimulus effort. NTIA Administrator Strickling said in response to our questions to staff about the return of funds issue said, “NTIA is working closely with grantees as part of our vigorous oversight process to ensure that taxpayer dollars are invested wisely and broadband projects are completed on time, within budget, and deliver the promised benefits to communities.”

It Isn’t Really About the Money to Treasury...
So the agencies running the program say they are returning the unspent broadband stimulus funds to the U.S. Treasury, just like Chairman Walden’s bill directs them to. Game over, right?

No. Saying that this issue is really about the money going back to the Treasury from unspent “give backs” and “clawbacks” is like saying Mrs. Lincoln had a bad evening at the theater.

This is about the perception,  and in a handful of cases, the reality of federal grant fraud.

Chairman Walden and the Subcommittee’s Ranking Member, Rep. Anna Eshoo (D-CA-14) have the ability and the chance to move beyond the partisan play book at tomorrow’s hearing. Both understand the issues at a detail level. One hopes they each do the right thing to focus Congress on the problems of the program. One hopes in doing so we can all take a "lessons learned" view, as Mr. Adelstein has done with programs in his wheelhouse.


The integrity of and political support for federal broadband support programs going forward requires no less.

Next Up: How Much Money Is Going Back, Where to Look for Fraud
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