August 22, 1996

August 22, 1996 | Commentary on Federal Budget

ED082296c: Wasting Your Money

With all the talk in Washington about slashing budgets, cutting deficits and axing federal programs, you'd think it would be hard (or at least harder) to come up with stories about government waste, fraud and abuse. After all, these are the first things Congress and the White House would do something about ... right?

Wrong. Despite Congress' best efforts to trim the pork, big government is alive and well.

Consider:

  • Auditors for the U.S. Dept. of Housing and Urban Development (HUD) recently discovered that the Baltimore Public Housing Authority had purchased eight new Chevy Blazers as take-home cars for its top managers; hired a security firm that employed 29 convicted felons; and sold more than $25 million-worth of contracts for building repairs to contractors, some of whom were friends or relatives of Authority employees, without allowing competitive bidding. In spite of these irregularities, HUD recently awarded the housing authority $115 million more to construct 338 new apartment units.
  • According to the General Accounting Office, the official auditing arm of Congress, the U.S. Export-Import Bank gave large bonuses to 200 of its 448 employees -- even though only 10 were eligible. Of five federal agencies reviewed for such "bonus abuse," the Ex-Im Bank had the smallest work force -- but accounted for one-quarter of all bonuses government-wide!
  • The brothers Alfonso Jr. (Alfie) and Jose (Pepe) Fanjul, citizens of Spain, are two of America's richest sugar barons. Their fortune is estimated at $500 million. Because they are considered "domestic growers," the Fanjul brothers also are "entitled" to a government-enforced import-protection subsidy that adds about eight cents per pound to the cost of the sugar we buy. How much of our money are the Fanjul brothers pulling in from this subsidy each year? A cool $65 million.
  • Financial mismanagement in the District of Columbia is legendary. In 1994, for example, Lloyd Arrington Jr., president of the city-funded Economic Development Finance Corporation (EDFC), collected a $17,000 bonus on top of his $70,000 salary, another $1,650 for parking and $600 for rented formal wear, dinners and entertainment. By the time his now nine-year old EDFC -- created to loan money to promising businesses 3/4 was audited in 1994, it had made only 17 loans, or less than two per year.
  • HUD (again) funded and sponsored a "training session" for 260 public housing tenants and HUD employees in 1995 -- at the San Juan, Puerto Rico, Casino Hotel and Sands Beach Resort! "We promise you a vacation that will be unforgettable!! Casinos for Dads. Beaches, Swimming, Snorkeling, Dancing & Touring etc. ... for youths. Exotic Shopping, Beauty Salon for complete pampering for Moms. Appetizing, Savory, Delicious foods for the Family Meals," read the invitation. Cost to taxpayers for a "training session" later found by the HUD Inspector General to lack "programmatic substance" (in other words, it was a boondoggle)? $325,000.

There's more -- much more. Like the new $373 million air-traffic-control system -- installed at 16 airports and destined for 47 -- that has suffered frequent shutdowns and failures. It has failed nearly once a week at Washington's National Airport. Or the Public Health Service physician who complained recently to The Washington Post that he is being paid $117,000 per year, plus a $15,000 bonus, to do absolutely no work at all. He made the front page. Or the $280,000 taxpayer-funded study now getting underway in Seattle to determine if a chemical widely used in sexual lubricants makes sex safer for homosexuals. Yes, you read that correctly.

Maybe now you can understand why Congress was willing to go to the mat with the administration -- to the point of allowing the government to shut down temporarily -- over federal spending.

These horror stories are just a few of the boondoggles that have been uncovered. Just think what remains hidden from view.

Note:Edwin J. Feulner, Ph.D.  is president of The Heritage Foundation, a Washington-based public policy research institute.

About the Author

Edwin J. Feulner, Ph.D. Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
Founder's Office

Related Issues: Federal Budget