Inspector General to Audit California Water Resources Handling of Federal Aid

Washington, DC — How the State of California spent millions of dollars of federal aid meant for improving fish habitat on preparing the Environmental Impact Statement for its controversial Delta Tunnel Project is under new legal scrutiny, according to documents posted today by Public Employees for Environmental Responsibility (PEER). Representing a U.S. Bureau of Reclamation employee, PEER filed a complaint detailing how a funding agreement with the California Water Resources Department is illegally siphoning off funds that are supposed to benefit fish and wildlife to a project that will principally benefit irrigators.

The Delta Tunnel is a massive engineering project to trans-ship vast quantities of freshwater from the reaches of the Sacramento River, its sloughs and Delta to the south. In support of this project, the state has received more than $60 million in grants authorized under the federal Fish and Wildlife Coordination Act. The PEER complaint filed on February 19, 2016 charges that –

• Those funds are earmarked for fish habitat improvements but are instead being expended on work that will harm critical habitat for at least five endangered and threatened fish species. Out of millions spent not a dime went to habitat improvements;
• The state double-billed for work it supposedly already did with an earlier $50 million grant; and
• The state collected all of the federal funds when the agreement was executed, in violation of a 50/50 matching requirement. The Bureau of Reclamation also ignored its own rule barring all the federal money from being expended before receiving the non-federal share. Nor has Water Resources indicated when and from what source it will supply its overdue match.

In a letter dated April 8, 2016, Mary Kendall, Deputy Inspector General for the U.S. Department of Interior wrote PEER saying:

“We have carefully reviewed the information you provided to us and gathered additional information about the agreement. Based on this information we have decided to conduct a review into the issues raised in your letter and we expect to commence our work on this matter this month.”

“California is improperly diverting federal grants to a giant slush fund for the California Water Fix,” stated PEER Senior Counsel Paula Dinerstein, who drafted the complaint, using a nickname applied to the Delta Tunnel. “In this case, the Bureau of Reclamation is abetting the State of California in breaking laws designed to ensure that federal investments to benefit wildlife are not used to their detriment.”

Currently, the Interior Inspector General is already auditing misuse of Reclamation grants also intended to benefit fish but actually benefitting irrigators, stemming from another PEER whistleblower complaint made in 2015. Deputy Inspector General Kendall indicates that she does not expect that earlier audit to be delayed, as it is slated to be submitted to Interior Secretary Sally Jewell for her approval.

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Read the PEER letter

See the Inspector General response

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