‘Infeasible’ Private Texas High-Speed Rail Collects $500K Grant, Seeks More
February 05, 2024
Topline: A long-delayed and over-budget proposed high speed rail between Houston and Dallas/Fort Worth pitched as a wholly private enterprise, has now received $500,000 from the Federal Railroad Administration for a study, even as the company planning it is being run by another company.
Key Facts: Launched in 2015 as a private venture by Texas Central Railway, the planned 240-mile high-speed rail line, was anticipated to run at 200 MPH between Houston and Dallas/Fort Worth with a travel time of less than 90 minutes.
Initially estimated to cost $10 billion, by 2020 it became a $30 billion project. Texas Central Railway also committed to constructing and operating the proposed system without public funding, and received tens of millions of dollars in financing from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development.
But the company and Amtrak have since partnered to apply for government grants, including the $500,000 it received from the Federal Railroad Administration for a study.
Texas Republican Reps. Jake Ellzey and Michael McCaul wrote a September letter to the Federal Railroad Administration to oppose the grant applications.
“By partnering with Texas Central, organized as a private limited liability corporation, Amtrak will funnel federal taxpayer money to a private corporation for what was initially proposed as an exclusively privately funded venture,” they wrote. “The project has received fierce pushback from rural landowners as well as county and local governments along the proposed route.”
Background: Texas Central Railway’s C-suite resigned, beginning with its CEO in 2022. The company is now being managed by FTI Consulting, which specializes in “liquidity forecast development, business plan development and analyses, collateral evaluations and recovery assessment and contingency planning,” according to the company biography.
Texas Central Railway still has its name on the project, has tried to buy private property from landowners and has had multiple legal battles with landowners and Grimes County, who refuse to sell land.
In June 2022, the Supreme Court of Texas ruled that the company has eminent domain authority on land that is needed to build the rail line.
While the company said the project would create 17,000 jobs and have an economic impact of $36 billion, landowners raised concerns about the abuse of eminent domain and questioned how many passengers would use the train.
Re-Route the Route, an advocacy group supportive of moving the rail alignment to a safer location, has opposed it.
Critical Quote: “If approved, these applications will result in taxpayer money being used by a private company to take private land from landowners through eminent domain,” Reps. Jake Ellzey and Michael McCaul wrote in their letter to the FRA. “Landowners deserve to have their land rights protected against the unrealistic and financially infeasible rail project proposed to be funded through these applications.”
Summary: Not only shouldn’t a private train line receive federal funds, but taxpayer dollars especially shouldn’t be pumped into a project that appears dead in the water, one whose price tag almost doubled and whose leaders jumped ship.
Refugee Assistance Cost Taxpayers $20 Billion In Two Years
February 06, 2024
Topline: The federal Office of Refugee Resettlement spent $20 billion over the last two years on “refugee and entrant assistance” for those entering the country legally or illegally, according to a report from OpenTheBooks.com.
Services included legal assistance, medical screening, housing assistance, cultural orientation, work authorization, public benefits application, school enrollment, mental health services, cash support and Medicaid access. The spending represents an increase of billions of dollars over previous years and includes potential conflicts of interest with the agency’s director.
Key facts: The office, a program of the Administration of Children and Families, part of the U.S. Department of Health and Human Services, drastically increased its discretionary grant spending over the last two years, contributing to the $20 billion price tag. The agency awarded only $500 million in grants from 2013-2021 but spent over $1 billion on grants in the past two years alone.
Grants were also sent out through programs like the Individual Development Accounts, which helps immigrants build their credit scores, start a business or save for large purchases like a house.
Parent agency Administration of Children and Families received $2.9 billion to support Afghani entrants just in 2022, while Ukrainian refugees needed $2.7 billion in support over the last two years.
OpenTheBooks also found potential conflicts of interest within Office of Refugee Resettlement spending.
Robin Dunn Marcos took over as program director in September 2022 following eight years of work with the non-profit International Rescue Committee.
That organization received just $22 million from the Office of Refugee Resettlement in 2021. But after Dunn Marcos became director, her former employer received $235 million in grants in 2023.
A government spokesperson said Dunn Marcos is currently recused from all matters involving the International Rescue Committee, but the recusal will end in September of this year.
Background: The financial burden resulted in part from a record 2.5 million migrant encounters at the U.S.-Mexico border last year.
During the past two years, roughly 260,000 unaccompanied children also arrived in the U.S. and 85,000 of those children are “lost” in the system. Support for unaccompanied children cost taxpayers $13 billion from 2012 to 2022, OpenTheBooks previously reported.
Summary: The Office of Refugee Resettlement represents just one small piece of U.S. spending on legal and illegal immigration. However, new arrivals in the country show no signs of slowing down, and neither does the burden on taxpayers.
Over $1 Billion in Weapons Missing In Ukraine
February 07, 2024
Topline: The Department of Defense has failed to properly track $1 billion worth of weapons provided to Ukraine, according to an internal audit released on Jan. 10 by the DOD Inspector General.
Key facts: The DOD is supposed to use special “enhanced end-use monitoring” techniques” to “safeguard” key weapons such as smaller, high-tech weaponry provided to Ukraine, which are likely targets for theft.
The audit says these monitoring procedures are not properly being followed in Ukraine, due to staffing shortages, poor internal logistics and more.
The audit found that $1 billion of the $1.7 billion — or 59% — in enhanced end-use monitoring designated weapons provided to Ukraine as of June 2023 are “delinquent,” meaning they can’t be accounted for in inventory reports.
Maybe the weapons are being used properly; maybe they have been stolen by Russian forces. No one can be completely sure.
The 59% delinquency rate is an improvement over the 86% of weapons that were unaccounted for in December 2022.
The weapons include night-vision devices, anti-tank missiles, attack drones and small-diameter bombs.
The report also found that inventory databases were not regularly updated and that the Ukrainian Armed Forces failed to properly report missing weapons.
Officials have stressed that the weapons may in fact be completely fine. Just because the DOD failed to keep track of the weaponry does not necessarily mean it was stolen.
The Army, Air Force and more agreed that procedures would be fully updated by September 2024.
Background: The Biden administration has sent over $75 billion to Ukraine since February 2022, including $44 billion in military aid.
Some Republican leaders are already trying to block Biden’s request for additional funds for Ukraine. The missing weapons could strengthen their arguments.
This is not the first time weapons have gone missing during Biden’s administration. In Afghanistan in 2021, the Taliban seized seven U.S. helicopters, each worth as much as $21 million. The DOD also lost track of $174 million of drones provided to Afghanistan.
Biden officials then removed official reports on Afghanistan weaponry spending from government websites.
The DOD has a long history of inadequately tracking its finances, having failed its last six annual audits.
Supporting Quote: “There remains no credible evidence of illicit diversion of U.S.-provided advanced conventional weapons from Ukraine,” Brig. Gen. Patrick Ryder, a Pentagon spokesman, said. “We do see some instances of Russia continuing to spread disinformation to the contrary, but the fact is, we observe the Ukrainians employing these capabilities on the battlefield.”
Summary: While there is no direct evidence that weapons in Ukraine have actually been misused, the $1 billion inventory error calls into question the White House’s constant assurances that any aid would be carefully tracked.
Throwback Thursday: Texas School Buys a Water Slide to Teach Kids Reading
February 08, 2024
Throwback Thursday!
Topline: In 2008, a school district in Cleburne, Texas used $367,000 in federal funds — about $536,000 in today’s money — to buy an inflatable alligator, an “under-the-sea water slide” and more.
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 late 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 2008included 65 examples of outrageous spending worth more than $1.3 billion, including the $367,000 wasted funds from Cleburne schools.
Key facts: Auditors first became suspicious when Cleburne officials could not provide lesson plans that explained how the alligator and water slide “supported reading instruction,” as their budget claimed.
Frivolous purchases also included a $908 steakhouse dinner, a $5,000 trip to Mexico and a $14,000 trip to Colorado, according to a news report from the time. Auditors also found checks of up to $10,000 that were paid to vendors without any corresponding invoice or receipt. The $367,000 in wasted money represented 44% of Cleburne schools’ federal funding from 2008.
Background: Spending at Cleburne has only increased since 2008. The school district’s payroll has risen from $41 million to $54 million during the period 2017-2022, according to spending records analyzed by OpenTheBooks. The district also paid over $22 million to outside vendors in 2022.
Critical quote: Harold Gentry — a member of Access Cleburne, the watchdog group that initiated the 2008 audit — had some fiery words for the school district.
“Central office administrators have put in jeopardy the future of our children’s education by their irresponsible misuse of federal funds and have attempted to deceive the public at every turn,” Gentry said. “The superintendent was responsible, but not entirely responsible. Any central office administrator who is clearly involved needs to be terminated and board members who are also responsible for approving this misuse need to resign.”
Summary: No, inflatable alligators don’t help kids learn to read. Apparently it cost $367,000 for Cleburne to learn that the hard way.
$23 Million Worth Of Computers Lost/Stolen From Chicago Schools
February 09, 2024
Topline: Tens of thousands of laptops and iPads were lost or stolen from Chicago Public Schools in the 2021-22 school year, amounting to $23 million in missing property.
Key facts: The Inspector General of Chicago Public Schools’ annual report found that 77,505 devices were missing from schools’ inventory, including 27% of all devices lent out to students.
Three dozen schools reported that every single device lent out to students was missing. In three schools, 50% of all devices in the building were reported as lost or stolen.
Half of the schools in Chicago lost at least 10% of their devices, a percentage the Inspector General called a “serious problem.”
The $23 million price tag on the missing devices is a conservative estimate, according to the report.
The Inspector General found instances where families failed to return laptops, and the schools simply marked the items as lost rather than try to recover them.
In another case, two siblings lost 10 devices without consequence.
CPS spent $2.6 million on software to track lost devices, but the report claims the software was not used properly.
The report noted that just because a device is currently lost doesn’t mean it will never be recovered.
Background: The missing laptops only exacerbate a larger financial crisis in Chicago schools. The district is projected to have a $391 million deficit this year as federal COVID-19 relief funds dry out, with school leaders arguing that they are not receiving enough money from the state to properly serve their students.
Chicago’s 638 public schools have an $8.5 billion budget for the current school year, about $2.5 billion more than the district had in 2019. Enrollment numbers have also decreased over the past five years.
Student performance is also dropping. In 2022, there were 50 schools where every fourth-grade student failed to demonstrate proficiency in either math or reading.
Supporting quote: “In a district of our size, some device loss is expected, but we remain concerned about the loss of any public asset,” a CPS spokesperson said.
“Our CPS team will work to streamline our system for tracking resources, including devices, while enforcing compliance with board policy. In a district where more than 72% of students are from economically disadvantaged families, it is crucial that we are sensitive to our families as we conduct any device recovery efforts.”
Summary: Chicago schools can’t account for 77,505 devices lost by students and staff during the pandemic, and $2.6 million software to track lost devices wasn’t used properly. Chicago schools clearly isn’t a good steward of public money, and should be help accountable.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.