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Feds to Probe Misuse of State Funds for Jerry Brown’s Delta Tunnels

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The Department of Interior’s Inspector General has opened an investigation into the possible illegal use of millions of dollars by the California Department of Water Resources (DWR) in preparing the Environmental Impact Statement (EIS) for Governor Jerry Brown’s controversial Delta Tunnels Plan.

The investigation resulted from a complaint the Public Employees for Environmental Responsibility (PEER) filed on the behalf of a Bureau of Reclamation employee on February 19, 2016.

The complaint, made public in a statement from PEER on Monday, April 11, details how a funding agreement with DWR is “illegally siphoning off funds that are supposed to benefit fish and wildlife to a project that will principally benefit irrigators” under the California Water Fix, the newest name for the Delta Tunnels Plan.

The California Water Fix proposes to divert water from the Sacramento River, through two massive tunnels under the Delta, to be exported to corporate agribusiness interests on the west side of the San Joaquin Valley, Southern California water agencies and oil companies conducting fracking and other extreme oil extraction methods.

“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. “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.”

The PEER complaint charges that:

* Those funds, over $60 million, are earmarked for fish habitat improvements under the authority of the Fish and Wildlife Coordination Act. However, they 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 complaint also notes, “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 responded to the complaint, stating:

“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.”

Nancy Vogel, spokesperson for the California Department of Water Resources, said, ”DWR will cooperate fully with the IG (Inspector General) and has no comment beyond that.”

Delta Tunnels opponents welcomed the DOI Inspector General’s investigation of the alleged misuse of funds by DWR.

“We long suspected that federal funds were being illegally diverted into support for the tunnels and finally we’ve got a formal investigation of the matter,” said Bill Jennings, Executive Director of the California Sportfishing Protection Alliance (CSPA), responding to news of the federal investigation. “The California Water Fix with its financing schemes, Enron accounting and the diversion of funds is a tottering house of cards swaying in the wind.”

The Delta Tunnels would not create one single drop of new water. Yet the project would hasten the extinction of Sacramento winter-run Chinook salmon, Central Valley steelhead, Delta and longfin smelt and green sturgeon, as well as imperiling the steelhead and salmon populations of the Trinity and Klamath rivers.

The announcement of the federal investigation of misuse of state funds takes place as the Delta Tunnels Plan is in total chaos. The State Water Resources Control Board announced on March 29 the suspension of upcoming deadlines for the California Water Fix water rights change petition in response to a request by the state and federal water agencies to extend dates and deadlines for the scheduled hearing, along with a number of other requests either to dismiss or delay the petition. (http://www.dailykos.com/story/2016/3/29/1507865/-Breaking-News-State-Water-Board-Suspends-Delta-Tunnels-Deadlines)

Read the PEER letter: http://www.peer.org/assets/docs/doi/4_11_16_PEER_request.pdf

See the Inspector General response: http://www.peer.org/assets/docs/doi/4_11_16_IG_ltr.pdf

Look at ongoing IG probe of diversion of Klamath drought relief moneys: http://www.peer.org/news/news-releases/federal-probe-into-klamath-irrigator-contracts-ordered.html

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Dan Bacher is an environmental journalist in Sacramento. He can be reached at: Dan Bacher danielbacher@fishsniffer.com.

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