When U.S. Sen. Joni Ernst, R-Iowa, criticized former House Speaker Nancy Pelosi in 2021 for an expensive San Francisco-area subway extension, the California Democrat’s favorite rail project was already more than $1 billion over budget.
Angry, the senator from the nation’s leading pork-producing state presented her monthly “Make ‘em Squeal” award to the U.S. Department of Transportation for allowing taxpayers to be deceived by this excessively costly project, as reported by Fox News reported at that time.
“The excavation for this subway is essentially an endless drain on taxpayer money,” Ernst stated in a press release. Back then, the Bay Area rail project, which was originally expected to cost $4.7 billion, had grown to $6.9 billion.
The current price tag now appears modest. The expense of Pelosi’s special agreement has escalated by almost three times.
“I don’t want to ever be sugarcoating things for our” VTA Board of Directors, Tom Maguire, Valley Transportation Authority’s megaproject officer, told the Mercury News. “I think there’s a chance the number is over 12.2 billion dollars, but I don’t know how much higher.”
As Ernst points out, the estimate for the six-mile project now amounts to over $2 billion per mile. Your tax dollars at work.
Such cost increases may be far from over. This debacle was originally planned to be completed by 2026; now its planners are considering a completion date of 2037, possibly at the earliest. So much for “shovel-ready.” Despite a federal report projecting that daily ridership in 2040 will be about 20,000 passengers fewer than optimistic estimates by the local transportation authority, according to the San Jose Spotlight.
The Federal Transit Administration — also known as the American taxpayer — is covering about half of the cost of the transportation project.
‘Breach in Transparency’
The significant cost overruns linked to Pelosi’s San Francisco endeavor are just the start of some serious accountability issues in government.
A scathing report in January by the Santa Clara Valley Transportation Authority’s auditor general notes that its team has documented what some have characterized as a “breach in transparency.” In some instances, the report notes, communications have been “misleading and/or dismissive of concerns that were related to the project.”
But President Joe Biden and his absent Transportation Secretary Pete Buttigieg have reaffirmed their support for the Bay Area project.
“The FTA has treated this program as one of their top transit projects in the country,” Palo Alto Councilmember Pat Burt, a VTA board member, told the Times-Herald. “They’ve repeatedly found it to be an important and worthwhile investment. And they’re committed to it. However, we still have uncertainties.”
Uncertainties indeed. The inflated subway expansion is just one of many examples of opaque projects funded by the federal government.
The situation is even worse considering the $4.7 trillion in federal funds distributed in response to the Covid scare through the CARES Act, the American Rescue Plan Act, and other legislation. Much of that money has been poorly managed and inadequately tracked by the Biden administration.
An audit at the end of last year, the Government Accountability Office found 49 federal agencies that did not report data to USAspending.gov, the official website that tracks federal spending.
The GAO report states that while many agencies that did not report may not be required to do so, the Department of the Treasury and the Office of Management and Budget (OMB) do not have clear responsibility for determining which agencies must report. Additionally, some agencies that did report to USAspending.gov had discrepancies in the COVID-19 obligation amounts compared to their budget and annual financial reports.
Ernst wrote the provision that modified the Federal Funding Accountability and Transparency Act of 2006 to ensure the reporting of “other transaction agreements” (OTAs) for federally funded projects to USAspending.gov. However, the Biden administration has failed to comply with the law.
The worst offenders include the Pentagon, which is unable to pass an audit, and the Small Business Administration. Ernst stated that the agencies are not adhering to two other accountability laws she authored— the COST Act and the Billion Dollar Boondoggle Act, which mandates the DOT to annually disclose all taxpayer-funded projects that are $1 billion over budget or five years or more behind schedule. The Transportation Department is a year-and-a-half behind schedule in releasing the billion-dollar boondoggle list.
As Ernst points out, the transparency act necessitates all “federal financial assistance and expenditures” to be promptly posted and available at USAspending.gov. However, the U.S. Department of Treasury, which manages the searchable public website, argues that it is not required to report “other transaction agreements” (OTAs). This is not consistent with the law. The GAO report discovered that over $40 billion in OTAs were not listed on the site, and this amount is increasing significantly.
The Iowa senator is bestowing her March 2024 Squeal Award on the Treasury Department as she introduces the Stop Secret Spending Act. This act would compel full disclosure of OTAs on the public website and “inform the public of any other secret Washington spending schemes.”
“We all know there is wasteful spending everywhere you look in Washington, but Biden wants to keep you in the dark, because we can’t stop what we can’t see,” Ernst said in a press release. “Thanks to USAspending, for example, I learned EcoHealth—the shady organization that shipped more than one million taxpayer dollars to the Wuhan Institute for dangerous experiments on bat coronaviruses—just received more dollars from the Department of Defense to conduct research on “high-risk pathogens.”
On this Sunshine Week, dedicated to shining a light on the critical need for transparency in government, Pelosi’s pet transportation boondoggle, and the other failures by the federal government to account for taxpayer dollars underscore transparency activists’ concerns that the federal government is anything but an open government. Adam Andrzejewski, Founder and CEO of Open the Books, said Ernst’s bill would help give Americans “the full accounting they are owed.”
