Archive for the ‘Economic Recovery’ Category

Report: U.S. Must Do More to Prevent Loss of Clean Energy Manufacturing Jobs

March 4, 2010

The United States must commit to developing a domestic manufacturing sector capable of meeting heightened demand for the parts, systems and components of the growing clean energy economy, a strategy that is key to ensuring that federal clean energy investments create quality, high-paying jobs in the United States. This would avoid indirectly subsidizing the growth of those activities in low-wage countries such as China that are emerging as key competitors in the race to lead the global clean energy economy. This is the conclusion of Winning the Race: How America Can Lead the Global Clean Energy Economy, a report released today by the Apollo Alliance and Good Jobs First at a Washington, D.C. conference.

“The United States is currently importing about 70 percent of its renewable energy systems and components,” said Phil Angelides, chairman of the Apollo Alliance. “If that trend continues, we stand to lose out on estimated 100,000 clean energy manufacturing jobs by 2015, and nearly 250,000 by 2030. This country needs a comprehensive clean-energy economic development strategy so we can ensure that jobs being created in the clean-energy sector stay in America.”

“The U.S. needs a comprehensive strategy, including safeguards to ensure that increased demand for renewable energy systems doesn’t simply create manufacturing jobs in low-wage havens,” said Good Jobs First Executive Director Greg LeRoy. “In the same way Ohio wouldn’t knowingly subsidize job growth in Iowa, Uncle Sam needs to watch the store and ensure a good return on American investments in clean energy.”

Winning the Race illustrates this risk by analyzing the recipients of the Recovery Act’s Advanced Energy Manufacturing Tax Credit (also known as 48C credits), which President Obama recently proposed expanding funding for by $5 billion due to the program’s success. The report finds that, of the 90 companies that received 48C credits for wind and solar manufacturing projects in the United States, 23 have also been investing in similar production in countries such as China, India, Mexico and Malaysia. The 23 companies, which include both U.S.-based and foreign firms, received a total of $458 million in 48C credits for their U.S. projects.

“A portion of this offshore investment is meant to serve foreign markets,” said Good Jobs First Research Director Philip Mattera, who analyzed the 48C recipient list for the report. “But these examples demonstrate that the U.S. share of the global clean energy economy – particularly in manufacturing – is far from guaranteed.  48C projects have helped stimulate the clean energy manufacturing sector, but some recipients are putting their primary emphasis on low-wage production for the entire global market.”

To address this risk, Winning the Race recommends a comprehensive strategy to create jobs in the clean energy economy through the entire supply chain. The first step is to ensure an expanded and consistent market for clean energy by passing comprehensive clean energy and climate legislation, and then to expand domestic clean energy manufacturing by:

  • Increasing the Advanced Manufacturing Tax Credit by $5 billion, as the president proposed in his FY2011 budget, but adding “clawback” provisions that would enable the federal government to recoup the tax credits if 48C jobs end up being sent offshore.
  • Enacting the “Investments for Manufacturing Progress and Clean Technologies (IMPACT) Act,” which would support small and mid-sized manufacturers by providing capital for investments in energy efficiency and for retooling and expanding into the clean energy supply chain.
  • Investing in the creation of a well-trained workforce that meets the needs of U.S. clean energy manufacturers and would make onshore investment more attractive.

The full report is available for download at www.apolloalliance.org and at www.goodjobsfirst.org.

Sucked Into the Offshoring Whirlpool

February 26, 2010

Critics of the $787 billion Recovery Act complain it is not doing enough to revive the economy, but they rarely ask why the companies that are receiving stimulus contracts and grants are not hiring more people. Now one of those recipients is facing a growing controversy over its employment practices in a case that helps explain why jobs remain in short supply.

Appliance maker Whirlpool is under fire from organized labor for its decision to shut down a 1,100-worker refrigerator plant in Evansville, Indiana and shift nearly all the work to a company factory in Mexico. The announcement was actually made last August, but it did not get national attention until recently, when union activists realized that Whirlpool had been given a $19.3 million grant by the U.S. Department of Energy to develop “smart appliances.” The funding was part of the Recovery Act’s $4.5 billion pot of money to encourage the development of the smart transmission grid.

The grant was not directed to the Evansville plant, but unions are nonetheless indignant that a company engaged in exporting jobs to a foreign low-wage location is receiving federal aid. The company made things worse for itself by warning workers not to participate in a planned protest demonstration featuring AFL-CIO President Richard Trumka. The union at the plant, IUE-CWA Local 808, has filed an unfair labor practice charge over the warning.

This situation shows the difficulty of using stimulus funds or other incentives to generate employment at a time when so many large corporations no longer have an interest in producing things in the United States.

Consider Whirlpool. For decades its production activities were almost entirely located in the USA. In the 1980s that began to change as the company started to focus more on overseas markets. It bought large shares in the Canadian company Inglis, Mexico’s Vitromatic and then the European appliance business of the Dutch company Philips. In 1990 Forbes wrote that Whirlpool was “going global—with a vengeance.”

If Whirlpool’s foreign expansion was meant only to meet demand in foreign markets, that would be one thing. But the company began a process of reducing its manufacturing in the United States and other developed countries while increasing it in foreign low-wage havens. One of its favorite havens was Mexico. In the late 1980s the company closed numerous U.S. plants and shifted production to Mexican maquiladora plants. In 1996 the plant in Evansville lost about 265 jobs when some refrigerator production was moved to Mexico. In 2003 Whirlpool shifted some production from its facility in Fort Smith, Arkansas to a new plant south of the border.

The latter move came a decade after a bitter dispute between the company and the workers in Fort Smith represented by the Allied Industrial Workers union. In 1989 Whirlpool unilaterally imposed concessions on members of AIW’s Local 370, prompting the union to launch a national boycott of the company. In 1991 the head of the local confronted Whirlpool executives and directors at the company’s annual meeting, calling on them to abandon their “narrow-minded, shortsighted, union-busting behavior.” The dispute was not settled until 1993.

In 2006 the Evansville and Fort Smith plants lost a total of about 1,200 jobs to Mexico.  Or, in the antiseptic terms of Whirlpool’s press release: “The company also is adjusting its workforce levels at several of its North American manufacturing facilities to optimize production levels and take advantage of its expanded manufacturing footprint.”

In other words, the current shutdown plan in Evansville is just the latest in a series of “adjustments” by which Whirlpool is ridding itself of decently paid U.S. workers and replacing them with much cheaper labor abroad. The 1,100 losing their jobs are the remnant of a Whirlpool workforce in Evansville that back in the early 1970s totaled nearly 10,000 (photo). Companywide, 26 of Whirlpool’s 37 production facilities are now located outside the United States.

It did not seem to occur to Whirlpool that there was anything unseemly about accepting federal stimulus funds at a time when it was closing a domestic plant. In fact, something similar happened seven years ago. In 2003, during a period when the downsizing of the Evansville plant was already under way, the company accepted a $1.3 million grant from the U.S. Department of Energy – via the Indiana Department of Commerce – to help develop a new manufacturing process for energy-efficient refrigerators produced in Evansville (source: Associated Press, February 8, 2003 via Nexis).

Until the federal government is prepared to do something serious about offshoring, it should at least refrain from giving financial assistance to firms that engage in the practice, even if the aid is going to a different part of the company—and even if it is for a laudable purpose such as promoting energy efficiency. The federal government now has a (non-public) contractor misconduct database to help it avoid giving procurement awards to bad actors. Perhaps there should also be a list of job-exporting companies which would be ineligible for federal aid until they reaffirm their commitment to domestic production.

Reposted from the Dirt Diggers Digest.

ARRA as a Corporate Rescue Plan

February 19, 2010

A war of words is raging over the impact of the Obama Administration’s $787 billion stimulus program, which is now one-year old. Conservative members of Congress are mounting a relentless assault on what they see as an abject failure, even as many of them unabashedly promote and at least implicitly take credit for individual American Recovery and Reinvestment Act (ARRA) projects in their home districts.

Meanwhile, the office of Vice President Joe Biden has issued a report insisting that ARRA has created or saved 2 million jobs and has brought many states back from the brink of fiscal disaster. The stimulus effort, Biden insists, “is going well.”

The debate boils down to an age-old disagreement between those opposed to allegedly wasteful social spending and those who believe government has to reinforce the social safety net during a time of economic distress.

Both sides are ignoring the fact that ARRA, to a significant degree, is a rescue plan not just for unemployed workers and struggling state governments, but also for parts of corporate America. This goes far beyond the roughly $50 billion in business tax breaks that Republicans last year insisted be part of the plan.

The Recovery Act represents a big step in the direction of what was once called industrial policy. Billions of ARRA dollars are being used by the federal government to encourage the development of new industries in areas such as renewable energy and health information technology that are seen as the foundation of future economic growth. Billions more are being spent on traditional procurement contracts to boost private-sector activity.

Here are some examples of larger injections of ARRA funds going directly to the corporate sector:

ADVANCED ENERGY MANUFACTURING TAX CREDITS

Hemlock Semiconductor, a joint venture of Dow Corning (itself a joint venture of Dow Chemical and Corning Inc.) and two Japanese companies: $141 million for the production in Michigan of polycrystalline silicon used in solar panels.

Wacker Polysilicon North America LLC, a subsidiary of the German chemical company Wacker Chemie: $128 million for a plant in Tennessee that will produce polysilicon for solar cells.

United Technologies Corporation, the big military contractor: $110 million for new equipment at its Pratt & Whitney plants to help produce more energy-efficient jet engines.

Alstom, the big French power and transportation equipment firm: $63 million for a Tennessee facility that will produce the world’s largest steam turbines for nuclear power plants.

GRANTS FOR DEVELOPMENT OF ADVANCED BATTERIES FOR ELECTRIC VEHICLES

Johnson Controls: $299 million for work on nickel-cobalt-metal battery cells

A123 Systems Inc.: $249 million for work on nano-iron phosphate cathode powder and electrode coatings.

General Motors: $105 million for production of high-volume battery packs for the GM Volt.

“CLEAN” COAL POWER INITIATIVE

American Electric Power Company: $334 million for the development of a chilled ammonia process to capture CO2 at a power plant in West Virginia.

Southern Company Services: $295 million for the retrofitting of a CO2 capture installation at a coal-fired power plant in Alabama.

BROADBAND EXPANSION

ION HoldCo LLC, a partnership led by Sovernet Communications: a $39 million grant to expand fiber-optic broadband in rural areas of upstate New York.

Biddeford Internet Corp. (dba GWI): a $25 million grant to extend a fiber-optic network to rural and disadvantaged parts of Maine.

ENERGY LOAN GUARANTEES

Solyndra Inc.: a $535 million loan guarantee to support the construction of a commercial-scale manufacturing facility for cylindrical solar photovoltaic panels.

PROCUREMENT CONTRACTS

Lockheed Martin: $165 million to work on the crew vehicle for NASA’s Project Orion.

Clark Construction Group: $152 million to design and build a new headquarters for the U.S. Coast Guard in Washington, DC.

General Motors: $104 million to supply light trucks, station wagons and alternative fuel vehicles to the General Services Administration.

GlaxoSmithKline: $62 million from the Department of Health and Human Services to do research on the H1N1 flu vaccine.

To this list can be added the thousands of contracts that states have awarded to private companies to carry out ARRA-funded activities such as highway repair, school construction and environmental remediation.

It is surprising that there has been so little debate on the relative merits of all these projects and programs – as well as on the wisdom of providing direct subsidies to profit-making entities. Are these grants, contracts, tax credits and loan guarantees a smart investment in the future or nothing more than business boondoggles?

With a significant portion of the Recovery Act going to aid corporations, we also have a right to ask why they are not creating more jobs with the taxpayer funds they have received. It would also be helpful to know – though the limitations of ARRA data collection make this difficult – how good are the jobs that have been created (in terms of wages and benefits) and whether those jobs are being equitably distributed among different portions of the population.

If we are ever going to reach any meaningful conclusions about the whole stimulus endeavor, we’ve got to go beyond tired debates about Big Government versus the Free Market. Like the bailout of the banks and the auto companies, ARRA is changing the relationship between the public and private sectors. Now we need to know whether the new arrangement is working and who is reaping the benefits.

Reposted from the Dirt Diggers Digest

Did A Handful of States Mistakenly Depress the National ARRA Job Total?

February 3, 2010

It was expected that the job numbers in the latest round of Recovery Act recipient reporting that just came out would diverge from those of the previous quarter. That’s because the Office of Management and Budget changed the job-counting procedure that contract and grant recipients were supposed to follow.

What’s puzzling, however, is that the job totals for different states are veering in different directions. My colleagues Thomas Cafcas and Leigh McIlvaine and I looked at the numbers and found that some states have reported substantial increases in ARRA-funded employment while others have posted significant declines. Idaho and Alabama nearly doubled their job tally; New Hampshire, Washington and Illinois were down more than 50 percent. Texas and Alabama added nearly 9,000 jobs each to their number; California dropped by nearly 40,000.

Here are the biggest changes in absolute numbers, with percentage changes displayed as well:

Decreases
California: down 39,170 (-36%)
Washington: down 20,104 (-58%)
Illinois: down 13,074 (-53%)
Arizona: down 5,472 (-45%)

Increases
Alabama:  up 8,987 (+184%)
Texas: up 8,888 (+45%)
Ohio: 7,610 (+45%)
Kentucky: 6,475 (+154%)

To try to make sense of these contradictory trends, we examined the grants and contracts in each of the states that contributed the most to the job totals.

In all eight states above, the change is almost entirely attributable to downward or upward movement in the job numbers associated with one type of grant: the State Fiscal Stabilization Fund (SFSF). The $54 billion SFSF — one of the largest components of the Recovery Act — is designed to shore up state budgets by providing additional federal funds, primarily for education but also for other kinds of public services.

In California, the employment impact of the SFSF was said to have dropped from 71,619 jobs in the previous reporting period to 38,924 in the last quarter of 2009. The difference of 32,695 represents more than 80 percent of the overall decline in the state’s job numbers.

In Washington the SFSF drop was 20,498, which is more than the total state job decline (there were increases in other categories). In Illinois and Arizona the SFSF declines were also larger than the state total.

At the same time, higher SFSF job numbers account for nearly all of the increases in the state ARRA job totals in Alabama, Ohio and Kentucky. In Texas the SFSF job number went up by more than 12,000 but it was offset somewhat by declines in other categories.

So what is one to make of these disparate SFSF impacts?

In the case of California, a majority of the SFSF drop comes from the non-education portion of the fund. It appears that the state used a $1 billion grant to pay the salaries of correctional officers but after that money ran out it turned to other non-ARRA sources to pay the officers. The 18,229 correctional jobs that were previously listed as being saved by ARRA were then zeroed out.

California also reported that the education portion of the SFSF accounted for about 14,000 fewer jobs in the October-December quarter than during the previous reporting period. There were also declines in ARRA-funded education jobs amounting to about 20,500 in Washington, 8,700 in Illinois, and 5,500 in Arizona.

At the same time, there were increases of about 12,300 education jobs in Texas, 4,400 in Kentucky, 4,150 in Alabama, and 3,900 in Ohio.

The increases appear to reflect the fact that the states involved had not yet put the federal money to work in the previous quarter (or had only just begun), so there were few or no jobs to report. That makes sense, but why should some states be reporting substantial declines in ARRA-funded education jobs?

Those states are out of line with the rest of the country. If we exclude the four states with the big declines, the rest of the country saw an increase of 33,819 jobs associated with SFSF education funds.

In the case of California, the reason may have been that the data in the first reporting period were overestimated and were adjusted downward for the last quarter. The need for a revision was widely discussed in recent months and was alluded to in a press release issued by the state’s Recovery Task Force on Saturday.

We have seen no public indication that a deliberate downward revision was responsible for the other big job drops in Washington, Illinois and Arizona. Officials in those states should clarify the reasons for the declines, so we can be sure they do not stem from a misunderstanding of the new job-counting procedures.

If there are not good reasons for those decreases, then the national ARRA job numbers are actually a bit higher than the 599,000 prominently featured on Recovery.gov.

Reposted from the STAR Coalition website.

The Case of the Missing Jobs Revisited

February 1, 2010

Over the weekend the Recovery Accountability and Transparency Board posted the new ARRA recipient data for the fourth quarter of 2009. The first thing I checked was whether there was a repeat of the phenomenon I wrote about with the first round of data: projects that are well under way or even completed reporting zero jobs generated.

I found that the mystery of the missing jobs is still with us. The spreadsheets on Recovery.gov include 4,396 federal contracts and 23,719 grants with a zero in the jobs column. Some of these, however, are not yet under way or are not very far along.

If we exclude those projects whose status is designated as “not yet started” or “less than 50% completed,” we are left with 1,713 contracts and 3,316 grants, or a total of 5,029.

I then looked at the column showing how much each project has actually received in ARRA funds. Some of those 5,029 report not having received any money as yet. If we remove those 180 contracts and 426 grants, there are 4,423 remaining.

In other words, more than 4,000 ARRA projects have received funds and managed to complete a substantial amount of work but are claiming not to have generated any jobs in the process.

Keep in mind that this time around, recipients were supposed to report jobs in a different way. Rather than guessing which positions were created or retained as a result of Recovery Act funding, they were supposed to simply add up all the hours worked on ARRA-funded projects and divide the total by their definition of a full-time week.

In many cases the message seems not to have gotten through. Many recipients continue to refer to jobs created and retained in the jobs narrative column. And in many cases the narrative is inconsistent with a listing of zero jobs.

One contractor refers in the narrative to “5 full-time correctional officer positions.” Another: “Project create work for 1 month for 4 existing positions.” And yet another: “This job retained 180 jobs – it takes approx. 70 man hours to complete the piece of equipment.”

It seems evident that many contract and grant recipients still think they are supposed to be reporting jobs created and retained, and many of those are still under the misapprehension that retained jobs don’t count.

There are even cases in which recipients note the total number of hours worked-one states: “A total of 1577 hours was worked in this last quarter as a result of Recovery Act funded projects”-but still put zero in the jobs column.

Recovery.gov displays the total number of “recovery funded jobs reported by recipients” in the fourth quarter as 599,108. One can only guess how much higher the number would be if all recipients calculated their job numbers in the proper way.

Reposted from the STAR Coalition blog

Report: States Are Making More Effective Use of Web to Inform Taxpayers About Economic Stimulus Spending

January 26, 2010

Some states are making dramatic improvements in websites designed to disseminate information about their share of the $787 billion American Recovery and Reinvestment Act (ARRA), but others are still failing to make effective use of online technology to educate taxpayers about the impact of economic stimulus spending.

This is the finding of Show Us the Stimulus (Again), a report released today by Good Jobs First, a non-profit research center based in Washington, DC. It updates a similar study published by Good Jobs First last July.

The full text of the report as well as state-specific appendices can be found on the Good Jobs First website at www.goodjobsfirst.org/stimulusweb.cfm.

“Some states are making great strides in fulfilling President Obama’s promise that the Recovery Act would be carried out with an unprecedented level of transparency and accountability,” said Good Jobs First executive director Greg LeRoy. “Led by Maryland, which again receives the highest score, these states’ ARRA websites do a good job in helping taxpayers understand and evaluate the role of the Recovery Act in job creation and state fiscal relief.”

The Good Jobs First study examines the quality and quantity of disclosure by official state websites on the many different ways more than $200 billion in ARRA funding is flowing through state governments to communities, organizations and individuals. It looks at the availability of information on spending programs as well as specific grants and contracts, with emphasis on data relating to jobs and the geographic distribution of spending within states. Using seven main criteria, each state is graded on a scale of 0 to 100.

“We are impressed by ‘Cinderella’ states such as Kentucky and Illinois, which were ranked at the bottom in our previous assessment but broke into the top tier in the new ranking,” said Philip Mattera, research director of Good Jobs First and principal author of both reports. “Numerous others have also improved their sites and are effectively incorporating the data states are helping to collect for the federal government’s Recovery.gov website. The state sites and Recovery.gov both have vital roles to play in helping the public evaluate the Recovery Act’s performance.”

The states with the highest scores in the new report are: Maryland (87), Kentucky (85), Connecticut (80), Colorado (72), Minnesota (72), Wisconsin (72), California (69), Illinois (69), Oregon (67), Massachusetts (65), Georgia (64), West Virginia (64), New Mexico (62), New York (62), Pennsylvania (62), Montana (61) and Arkansas (60).

At the other end, there are 11 states with scores below 20, reflecting the absence of adequate data on ARRA programs or specific projects. Starting from the bottom, they are: North Dakota (5), District of Columbia (6), Missouri (10), Alaska (13), Vermont (13), Louisiana (16), Mississippi (17), Idaho (18), Oklahoma (18), Texas (18) and South Carolina (19).

Although changes in methodology make exact comparisons impossible, the following states experienced major changes in ranking from GJF’s previous survey: Kentucky, which soared from 47th place to 2nd (an increase of 45 places); Illinois, which jumped from 50th to 7th (43 places); Minnesota, which climbed from 34th to 4th (30 places); and Utah, which rose from 50th to 24th (26 places).

Here are highlights of specific findings:

  • Most states do a good job of providing information on the composition of their ARRA spending, both in broad program categories (energy, housing, transportation, etc.) and in narrower ones. Only the District of Columbia provides no program allocation information at all.
  • Geographic breakdowns (by county or other division) are less common than summaries of spending by program category. Twenty-seven states provide geographic information, often with interactive maps.
  • Only three states—Kentucky, Maryland and Wisconsin—juxtapose the geographic distribution of spending with patterns of economic distress or need within the state.
  • Besides overall spending amounts, state residents may be interested to know where individual ARRA projects such as the repaving of a road or repair of a school building are taking place. More than half the states (28) now have some kind of project mapping feature on their ARRA site.
  • Via maps or otherwise, 41 states provide one or more of the following types of detail on projects funded through ARRA grants and contracts: description, dollar amount, recipient name, status, and the text of the contract or grant award. Four states—Connecticut, Kentucky, Massachusetts and New Hampshire—have all five elements.
  • Despite the ready availability of jobs data at Recovery.gov, 10 states still have none on their websites: Hawaii, Kansas, Louisiana, Mississippi, Missouri, New York, North Carolina, North Dakota, South Carolina and the District of Columbia. By contrast, 16 states have jobs data on individual projects as well as totals by program area and for the state as a whole.
  • No state provides comprehensive data on wage or benefit levels in ARRA jobs or on the demographics of the workers in those jobs.
  • Only five states—Connecticut, Kentucky, Massachusetts, Mississippi and New Hampshire—provide the full texts of at least some ARRA contract awards.
  • No state reports the share of ARRA contracts going to minority, women-owned or other disadvantaged business enterprises, though Pennsylvania is expected to begin doing so soon.

Based on our findings, Good Jobs First offers the following recommendations:

  • Put a summary of key information about ARRA spending at the top of the home page of the site. A graphic showing the main spending flows goes a long way in helping the average user begin to see what the Recovery Act is all about. There should be clear links to pages with details about the various specific programs.
  • Provide a map or table showing how overall ARRA spending and the amounts in key categories are being distributed among counties (or other geographic division) around the state.
  • Also show how the spending is distributed across the state in comparison to patterns of economic distress such as local unemployment and foreclosure rates.
  • Along with information on spending streams, provide details on individual projects—such as a particular transit improvement or weatherization effort—funded by an ARRA grant or contract. These details should include a description of the project, the dollar amount, the name of the recipient entity, the status of the project, and the number of jobs generated by the project, along with the text of the contract or grant award.
  • Where possible, display the location of the projects on maps. Interactive displays that allow one to drill down for details are better than static maps.

“At a time of intense public concern about the effectiveness of government spending designed to mitigate the economic crisis, states should be maximizing their use of online tools,” Mattera said.

Good Jobs First co-chairs the Coalition for An Accountable Recovery (http://www.coalitionforanaccountablerecovery.org), which works at the federal level. It also coordinates States for a Transparent and Accountable Recovery, or STAR Coalition (http://www.accountablerecovery.org), which works with state-level organizations.

Report Deciphers Bond Provisions of the Recovery Act, Focusing on Accountability Issues

January 20, 2010

Perhaps the most obscure aspect of the $787 billion American Recovery and Reinvestment Act is how it seeks to expand bond programs for public infrastructure and private economic development projects.  A report released today by Good Jobs New York explains how the Recovery Act’s new and expanded bond programs are facilitating economic recovery and where opportunities exist for public input. The report is available at www.goodjobsny.org.

The impacts of Recovery Act bonds are potentially enormous with billions of dollars in new lending authorized nationwide. Yet, there is little public discussion about how they work or if the projects they finance will create good jobs, concludes the study, Bonds and the Recovery Act: A Guide to Municipal Bonds Enabled Under the 2009 American Recovery and Reinvestment Act and Their Potential Impacts on New York Communities.

“We hope this report will become a useful organizing and educational tool for many groups of New Yorkers,” said Bettina Damiani, Project Director of Good Jobs New York. “The report documents what the goals of specific bond programs are and if there are leverage points to make sure projects are accountable and create good jobs.”

The report reviews new and modified bond programs (private activity and governmental) through the lens of community needs and increased transparency and accountability: Are there public hearings? Are there prevailing wage requirements? Is priority given to low-income communities? What projects have already received such financing?

“Thanks to the Recovery Act, there are new and expanded municipal bond programs,” said Allison Lirish Dean, GJNY’s Research Analyst and lead author of the report. “But the process for issuing these bonds hasn’t changed despite the Recovery Act’s emphasis on transparency and accountability.”

The report includes commentary on approximately $74 million in approvals for Recovery Zone Facility Bond projects in New York City such as a parking facility at St. Barnabas Hospital in the Bronx, and a retail center known as “City Point” in Brooklyn.  Both projects were controversial because of the small number or low quality of jobs expected to be created. Also, the City Point project was widely opposed by Brooklyn residents and small business owners because in 2007 the City displaced numerous small, mostly locally owned stores for the development.

Bonds and the Recovery Act, while primarily a resource guide, does include policy recommendations:

  • Where possible, the Bloomberg Administration should include jobs created by Recovery Bond projects in the New York City Stimulus Tracker.
  • Any amendments to the private activity bond programs associated with the Recovery Act should increase the requirements for public input and include mechanisms that would guarantee low-income New Yorkers directly benefit from projects. Current language in the Recovery Act and additional guidelines put in place by the City last summer are too weak to guarantee that projects benefit New Yorkers who most need jobs or that they create good permanent jobs.

Bonds and the Recovery Act is online at: www.goodjobsny.org.

The Dog Ate My ARRA Reporting

December 16, 2009

The Recovery Accountability and Transparency Board has just published a list of more than 4,000 prime recipients of ARRA contracts and grants that failed to comply with the first round of reporting requirements, including data on job creation and retention.

If nothing else, the document shows the difficulty of trying to get thousands of companies, non-profit organizations and state/local government agencies to follow instructions and meet a single deadline. Since the list also includes the apparent reason for each case of non-compliance, it also provides an impressive collection of excuses for screwing up.

Here’s a selection of the self-justifications offered by these recipients of federal largesse:


The rules were to blame

A company called EnGenius said its failure to report was “due to late breaking guidance” (even though the final rules were published well before the filing deadline).

Cherry Central Cooperative and other Agriculture Department recipients complained “there was confusion about the reporting requirements vs. the exemptions that are provided for reporting salary information for top executives.” (The salary requirement applied only to very large federal contractors.)


The reporting system was flawed

All American Brothers Co. LLC: “Claimed they did not receive all the correct coding information to allow for input into stimulus template & drop down menu does not contain necessary information needed for report.” (Somehow thousands of others managed to make it work.)


The Internet was broken

CBS Surveying and Mapping and others said they did submit the data but it somehow did not get recorded by FederalReporting.gov.  (Didn’t they notice their data was missing from Recovery.gov?)

D.E.L. Disaster Recovery Enterprise LLC: “The FederalReporting.gov website was down and the recipient could not report and could not get help.” (Sounds like they need their own disaster recovery help.)

Advanced Integration Group Inc.: “Website down at time of reporting.” (And they never bothered to try again?)


I forgot to finish

Speaking of the Ruffed Grouse Society, USDA said: “Draft report submitted. Recipient was not aware they had not finalized the report.“ (The organization, whose website says it is “dedicated to hunting and conservation of young forest species,” was apparently too eager to get back to the woods.)

Interactive Elements Inc.: “Contractor inadvertently did not hit ‘submit’ to finalize its draft report in the federal reporting system.” (Yes, that interactive stuff is complicated.)


I forgot to start

Green Building Construction & Electric, Inc.: “Contractor said he simply forgot to do the report, even though contracting called and reminded him. “


Reporting requirement? What reporting requirement?

Eureka Development, LLC: “Were not aware of the ARRA reporting requirements.” (This was their non-eureka moment.)


I heard that the assignment was cancelled

Chester Bross Construction Company: “Misinformed that no reporting was required – will report 1/10. “ (I swear that’s what I heard.)


I was confused

Dell Federal Systems: “Lack of understanding of the reporting requirement and associated guidance.”

State Military Department of Indiana: “Recipient lacked understanding of Recovery Act reporting requirements.”


I was on vacation

Siku Construction, LLC: “The responsible administrator was on vacation and did not receive the e-mails and phone messages left by the awarding office.”


I was really sick

City of Pauls Valley: “Reporter Contracted H1N1, no backup.”


I’m Canadian

Nanometrics Inc.: “Contractor tried to submit report, but system won’t recognize Canadian institutions. “


There was this big wave…

American Samoa Criminal Justice Planning Agency: “Grantee was given waiver due to tsunami.”


Reporting—I Don’t Need to Do Any Stinking Reporting!

Eyak Technology Limited Liability Company: “Recipient has chosen not to report.” (This from a firm that got an award from the Department of Homeland Security.)


You caught me

Johnson Controls Inc. and numerous other contractors for the Department of Veterans Affairs: “No valid reason discerned.” (Busted.)

Thanks to Tommy Cafcas for research help.

(reposted from the STAR Coalition website)

NYC Approves Recovery Zone Bonds for Project that Won’t Aid Recovery

December 16, 2009

The New York City Capital Resource Corporation (CRC) is blurring job numbers on stimulus bond projects again. On December 15, 2009 the CRC’s board voted to issue $19.8 million in tax-free Recovery Zone bonds on behalf of Arthur Management Corp. to finance the construction of a parking facility in the Bronx. The facility will serve St. Barnabas Hospital, which created Arthur Management in order to be eligible for the financing.

CRC staff insisted the new facility will create six permanent jobs. What they didn’t mention was that 28 jobs will be displaced when the old facility is torn down because the new one will rely heavily on automation, allegedly saving the hospital $500,000 a year. Good Jobs New York staff and organizers from the Committee of Interns and Residents (CIR) who testified against the deal questioned the logic of using stimulus bonds intended to “contribute economically to the neighborhoods in which projects are located,” as the city’s own criteria state, for a project that could result in a net loss of 22 jobs.

Even the argument that saving a hospital some money aids recovery doesn’t hold up in light of the millions in bonuses St. Barnabas, despite being in financial straits, recently gave to its top executives. The hospital has also spent hundreds of thousands of dollars–and plans to spend more–attempting to overturn a 1999 National Labor Relations Board decision that cleared the way for resident physicians to legally unionize. In the meantime, the NLRB was obligated to impound secret ballots generated when staff voted earlier this year on whether to unionize, an indication that St. Barnabas’s relationships with unions and its employees is less than the standard New Yorkers should expect from companies seeking public subsidies.

Misbehaving Contractors are Recovery Act Winners

November 13, 2009

ARRA logoThe federal government has awarded about $17 billion in direct contracts under the various provisions of the American Recovery and Reinvestment Act (ARRA). Given the Administration’s commitment to accountability, one hopes that the contractors were chosen with the utmost care and that any companies with serious blemishes on their record were excluded.

If the timing had been a bit different, such a review could have been accomplished much more easily. The General Services Administration is in the process of implementing legislation passed by Congress last year that mandates the creation of a database on the integrity and performance record of federal contractors and grantees. In September GSA published a notice in the Federal Register about its plans for what is being called the Federal Awardee Performance and Integrity Information System, or FAPIIS. The comment period on the plan ended earlier this month. Perhaps the system will be operational before ARRA reaches the end of its two-year life.

Unfortunately, the public will never know the details of how FAPIIS is used to vet contractors for ARRA or any other program. The reason is that Congress caved in to pressure from the contractor community and prohibited public disclosure of the database, which will be available only to federal agencies for internal use.

Fortunately, the public still has access to the Federal Contractor Misconduct Database (FCMD), which was created and is maintained by the non-profit Project On Government Oversight (POGO). It served as the inspiration for FAPIIS, though POGO and other watchdog groups pushed for a public version of the federal database. The FCMD, which covers the 100 largest federal contractors, documents more than 700 cases of misconduct since 1995 that resulted in more than $26 billion in fines and penalties. It covers a wider range of misconduct than will FAPIIS.

Apparently, most federal agencies did not pay close attention to the FCMD in awarding their ARRA contracts. An examination of the national Recovery Act contractor spreadsheet shows that many of those companies appear in POGO’s database as having been involved in cases of misconduct. They account for more than $6 billion in Recovery Act contract awards.

There are 12 contractors with more than one instance of misconduct and ARRA contracts of at least $150 million.* Here they are (listed by volume of ARRA contracts):

  • CH2M ($1.8 billion in ARRA contracts; 6 instances of misconduct with penalties of $2.8 million)
  • URS ($737 million in contracts; 4 instances and $2.4 million in penalties)
  • Northrop Grumman ($596 million in contracts; 29 instances and $821 million in penalties)
  • Battelle Memorial Institute ($522 million in contracts; 7 instances and $1.3 million in penalties)
  • Honeywell International ($472 million in contracts; 31 instances and $641 million in penalties)
  • Fluor ($469 million in contracts; 23 instances and $198 million in penalties)
  • SAIC ($312 million in contracts; 10 instances and $14 million in penalties)
  • Bechtel ($270 million in contracts; 15 instances and $359 million in penalties)
  • University of California ($270 million in contracts; 25 instances and $67 million in penalties)
  • Lockheed Martin ($180 million in contracts; 50 instances and $577 million in penalties)
  • University of Chicago ($163 million in contracts; 4 instances and $22 million in penalties)
  • Jacobs Engineering ($161 million in contracts; 2 instances and $37 million in penalties)

When the nation’s largest contractors have track records such as these, it is not surprising that Congress chose to keep its misconduct database a secret.

* In the case of joint ventures, the amount of the contract award is divided equally among the companies or institutions involved.

Reposted from the Dirt Diggers Digest.