For Immediate Release
October 21, 2011
Grassley Presses for Accountability in Justice Department Grant Programs, Notes Special Interests That Oppose Reform
WASHINGTON – In an effort to ensure greater accountability in the Justice Department’s distribution of money to grant recipients, Sen. Chuck Grassley offered an amendment to the appropriations bill being debated in the United States Senate that would include an 11-point accountability plan for federal grants administered by the Department of Justice. The amendment offered Thursday was defeated by a vote of 46 to 54 on mostly party lines. Grassley said he will continue to pursue the measure, despite the special interests that worked hard to defeat his amendment and protect their continued stream of federal funds.
“We have non-partisan audits showing that taxpayer money is being abused and wasted in federal grant programs.” Grassley said. “We need transparency, accountability, and performance from both the Justice Department and individual grantees who are trusted with federal dollars. It’s a shame we’re wasting taxpayer dollars like this when we can immediately do something to begin to remedy the problem.
“And it’s a shame that something this basic fell on partisan lines when this shouldn’t be a partisan issue, but it just goes to show that reforms to Washington’s spending addiction will be hard to come by, given the continued power special interests have. It also reinforces the need for the Deficit Committee to come up with big and bold ideas. The outcome also tells me I need to continue to educate my fellow members about the problems that come from granting money without enough accountability and to consider whether it’s fair to grant taxpayer money to non-profit groups as long as they have their own money parked offshore to avoid federal taxes.”
Grassley said the Boys and Girls Clubs of America, the national umbrella group for hundreds of clubs around the country, continued receiving tax dollars while using off-shore tax shelters, paying generous executive compensation and lobbyists’ fees, and simultaneously closing clubs due to an alleged lack of funds. “I support the mission of the Boys and Girls Clubs. The local clubs help thousands of children every year,” Grassley said. “However, given our current fiscal crisis, I can’t support federal taxpayer dollars being awarded as grants to those who hold millions of dollars in rainy day funds off-shore. My amendment doesn’t prohibit charities from investing offshore. It just says they can’t get federal grants if they invest offshore to avoid taxes on their investment income. When organizations have funding and resources available to them, it’s not clear why they shouldn’t be dipping into those rainy day funds before seeking federal money.”
A nearly identical version of the accountability package was included as part of the Trafficking Victims Protection Act Reauthorization Act voted out of the Judiciary Committee on a bipartisan basis just last week. Select pieces were previously approved as part of the Second Chance Act reauthorization this past July.
Grassley also submitted last week a similar plan, along with several other ideas, to the Deficit Reduction Committee. Grassley’s letter can be found here.
Grassley’s 11-point accountability plan:
o required the OIG to audit 10 percent of grantees,
o required mandatory exclusion for those with negative audit findings unremedied after 6 months, with priority placed to those with no past negative audit findings,
o required reimbursement for funds awarded erroneously to grant recipients that should have been excluded,
o required a mandatory 25 percent match with no less than 60 percent of the 25 percent constituting cash,
o prohibited non-profits that hold money off-shore for purposes of avoiding unrelated business income tax from receiving federal grants,
o capped administrative expenses at 8 percent, limited conference expenditures, prohibited grantees’ lobbying, and
o required the Office of Justice Programs Assistant Attorney General to certify to Congress annual compliance with these provisions.
Grassley said an audit of the Government Accountability Office of nine Trafficking Victims Protection Act grants over the last five years found fraud in all nine grants, including more than $1.4 million in questioned costs on a $1.7 million grant.
Violence Against Women Act grants were also susceptible to fraud; 21 of 22 randomly selected grants over 10 years revealed significant fraud and abuse, including one audit where 93 percent of grant funds were questioned by the Inspector General.
So far in 2011, the Inspector General has audited 21 grant recipients with grant funding totaling $54 million and has questioned the use of more than 26 percent of these grant dollars. If the random audits the Inspector General has conducted were extrapolated to all 3,467 grants DOJ has awarded in 2011, totaling more than $2 billion, that would mean more than $500 million of grants administered could have questionable costs. “That’s just an extrapolation but it reinforces the need for a higher percentage of grants to be audited, as my amendment would require,” Grassley said.