Millions In Federal Tax Dollars Misused By State Water Tunnel Project

SAN FRANCISCO (AP) — The U.S. Department of Interior improperly contributed tens of millions of dollars in taxpayer money to help politically powerful California water districts plan for a massive project to ship the state’s water from north to south, a new federal audit said Friday.

Federal officials gave $84 million to help finance the water districts’ planning, backed by Democratic Gov. Jerry Brown, to build two giant water tunnels to re-engineer the state’s water system, according to the audit by the inspector general’s office of the U.S. Interior Department obtained by The Associated Press.

By California law and by an agreement by the water districts, California water districts and not federal taxpayers are supposed to bear the costs of the $16 billion project, the audit said.

The proposed tunnels are part of Brown’s decadeslong push for a project that would more readily carry water from green Northern California south, mainly for use by cities and farms in central and Southern California. Voters rejected an early version of the proposal in a statewide vote in the 1980s.

California water districts are making final decisions on whether to go ahead with the controversial project.

The inspector general says federal authorities did not fully disclose to Congress or others that it was covering much of the cost of the project’s planning.

The actions by the Bureau of Reclamation, which is part of the Interior Department, mean that federal taxpayers paid a third of the cost of the project’s planning up to 2016, the audit said.

Central Valley water districts that were supposed to pay 50 percent of the tunnels’ planning costs contributed only 18 percent, the audit found.

California officials, meanwhile, have consistently said no taxpayer money was being spent on the project.

Asked if auditors wanted contractors to repay the money, Interior spokeswoman Nancy DiPaolo said, “We certainly hope so.” That decision was up to California, she said.

Thomas Birmingham, general manager of the sprawling Central Valley rural water district Westlands, which received one of the largest shares from the government, said he knew of nothing about the arrangement that was “inconsistent with either state or federal law.”

“The state was aware of it,” Birmingham said of the federal payments. “No one indicated this was somehow a violation of the letter or spirit of the agreement” guiding the costs of the project.

Birmingham said water districts would be responsible for reimbursing the federal money if the project went forward and benefited those districts.

Spokespeople for the Bureau of Reclamation, Brown’s office and the state Department of Water Resources either had no immediate comment Friday or did not respond to requests for comment.

The audit’s findings were “appalling,” said Doug Obegi of the Natural Resources Defense Council environmental group, which has opposed the project on the grounds that it would speed up the extinction of several endangered native species.

“The public is paying for what a private party is supposed to pay for,” Obegi said. “That is taking the public’s money, and that’s not OK.”

A former lobbyist for Westlands, David Bernhardt, has been a top official in the Interior Department under the George W. Bush administration and again under Trump. Critics long have said Westlands has benefited from its ties to the federal agency, which the water district and Interior deny.

“I wish I were surprised to learn that the Westlands Water District colluded with the Interior Department to hide millions of dollars in unauthorized payments from Congress, but this is typical of the longstanding and incestuous relationship between the largest irrigation district in the country and its federal patrons,” said U.S. Rep. Jared Huffman, a California Democrat.

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