Federal audit reveals $84.8 million misused for Delta Tunnels planning

By Dan Bacher | September 10, 2017 |  

A federal audit has determined that the U.S. Department of Interior’s Bureau of Reclamation improperly used over $84.8 million in federal taxpayer’s money in the planning process for Governor Jerry Brown’s Delta Tunnels project. 

The Inspector General for DOI has issued a 42-page report detailing the misuse of the money and the recommendations made to Reclamation to resolve the issue. “The Bureau of Reclamation was not transparent in its financial participation in the Bay Delta Conservation Plan,“  the title of the audit obtained by the Associated Press sums up. 

Governor Brown has continually said that taxpayers will not pay for the construction of the tunnels, but the conclusions reached in the federal audit reveal that federal taxpayers have indeed already paid over $84 million to subsidize the widely-unpopular project.

The Delta Tunnels plan, renamed the California WaterFix in 2015, would build two massive 35 mile long tunnels under the Delta to export Sacramento River water to the Westlands Water District, Stewart and Lynda Resnick's agribusiness operations in Kern County and other other growers on the west side of the San Joaquin Valley. The tunnels would also provide water for Southern California water agencies and for fracking and other extreme oil extraction operations in Kern County.

The audit said the water contractors who will benefit from the project, not the federal taxpayers, were supposed to pay for the project, a joint state-federal proposal that could cost up to $68 billion in total.

The Inspector General determined that Bureau officials “did not fully disclose to Congress or other stakeholders that a total of $84.8 million in federal funds were used to pay for the planning costs of the State of California’s BDCP.”

In addition, the audit revealed:

• Reclamation did not disclose that it used these funds to subsidize 64% of the Central Valley Water Project (CVP) water contractors’ share of the state’s planning costs “and could not provide us with any explanation of why it did so.“

• Reclamation financed its participation in the tunnels project planning “by using a complex process that was not transparent to stakeholders.”

• USBR made a determination at the regional level, without suffIcIent analytical documentation, that $50 million in federal funds was  not reimbursable, resulting in these funds not being repaid to the Treasury.

• Finally, USBR did not expend funds under its third financial assistance agreement with DWR in accordance with the authority delegated to the Commissioner under the Fish and Wildlife Coordination Act because the funds “were not used to plan, design or construct projects to create or improve instream habitat.” 

“We are concerned that the absence of transparency displayed by USBR during the planning phase of the BDCP will be perpetuated in the future,” the Inspector General concluded. “We therefore made four recommendations to address the weakenesses in USBR’s policies and procedures that allowed USBR not to disclose to Congress and other stakeholders that $50 million in federal funds was being used for the BDCP and that these funds would not be returned to the Treasury as expected.“

You can read the audit, including the conclusions and recommendations, here: drive.google.com/...

The investigation resulted from a complaint the Public Employees for Environmental Responsibility (PEER) filed on the behalf of a Reclamation employee on February 19, 2016. The complaint detailed  how a funding agreement with the California Department of Water Resources was “illegally siphoning off funds that are supposed to benefit fish and wildlife to a project that will principally benefit irrigators” under the California WaterFix. 

PEER claimed that of the $60 million in Coordination Act grants spent, “not a dime went to habitat improvements.“ Instead, the group said the money was actually being expended on work that will harm critical habitat for at least five endangered and threatened fish species. More information: www.counterpunch.org/...   

Westlands Water District general manager Thomas Birmingham defended the use of the federal money for tunnels planning, telling the Associated Press that he “knew of nothing about the arrangement that was inconsistent with state or federal law.”

“Birmingham says that under federal law, water districts that would benefit from the tunnels have to repay the taxpayer money only if the project is built,” according to AP: abcnews.go.com/…

The California Natural Resources Agency has not yet responded to my request for a comment on the audit.

Barbara Barrigan-Parrilla, Executive Director of Restore the Delta, issued a statement noting that the “same type of obfuscation“ exposed in the audit is being employed in the financial planning for the project’s construction:

“As we knew from research completed by our colleagues over the last few years, funding has been misused to finance the planning of the Delta Tunnels. We are seeing the same type of obfuscation in the financial planning for the construction of the project.

"Central Valley Project contractors cannot afford 45% of the $17 billion initial construction costs without a subsidy. State Water Project Contractors, like Metropolitan Water District are not being honest with their boards about their partners or ratepayers how much it will cost in total. It is a boondoggle that is being shoved onto 98% of Californians who will be paying for generations.

"The truth is Westlands and the other west side San Joaquin Valley growers could not afford the planning process without tax contributions from federal taxpayers. How can MWD or SCVWD partners have confidence in Westlands as a partner for a project that starts at $17 billion?"

After hearing of the audit’s release, Caleen Sisk, Chief and Spiritual Leader of the Winnemem Wintu Tribe, said, “Our prayers are being answered.”

“It's ironic that the same Bureau of Reclamation that misspent taxpayers money for Delta Tunnels planning won't let us sit on the committee for the planning for reintroducing winter run Chinook salmon to the McCloud River,” she stated at Friday’s press conference to kick off the Tribe’s Run4Salmon in Berkeley.  

“These are the agency faulty details that keep the Winnemem Wintu worried about the Delta Tunnels and the Fish Passage Pilot Project. Salmon need passage out of and into the Delta,” Chief Sisk concluded. 

The Tribe is currently engaged in a campaign to bring back the descendants of the McCloud River winter-run Chinook salmon from the Rakaira River in New Zealand to reintroduce to the McCloud above Shasta Dam. This summer, the Tribe and their allies partnered with GoFundMe to help fund the collection of genetic samples of the winter Chinooks from New Zealand. More information: www.dailykos.com/...

Restore the Delta and the Winnemem Wintu Tribe are both plaintiffs in recent lawsuits filed to stop the Delta Tunnels. The final tally of the Delta Tunnels CEQA lawsuits is 18 cases brought by 80 plaintiffs, according to Alex Breitler of the Stockton Record. Read them here: https://t.co/NlVev0SuMw 

Meanwhile, the state’s audit of funding for the Delta Tunnels is slated for release in October. On August 10 of last year,  the Joint Legislative Audit Committee voted 9 to 2 to conduct the audit, as requested by Assemblymember Susan Eggman and Senator Lois Wolk.