Cloudy With a Chance of Fraud: Federal Weatherization's Back

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Real Clear Investigations

Alarm bells are sounding at the Department of Energy as the Biden administration has moved to triple the budget for the Weatherization Assistance Program, which provides low-income applicants with free home and apartment renovations, such as insulation, duct-sealing, new heating systems, and kitchen appliances. The last time the program was lavished with such a surge in funds, through President Obama’s 2009 stimulus bill, audits and investigations uncovered a pattern of fraud, embezzlement, shoddy work, inflated expenses for parts and materials, sketchy billing, kickbacks, and gimcrack construction.

In a private meeting in February, the department’s inspector general, Teri L. Donaldson, warned Secretary of Energy Jennifer Granholm that the enormous new budget for the program – slated to grow to $1 billion a year from $315 million  – threatens to overwhelm the department’s ability to protect taxpayers’ money. In April, the inspector general made that warning public with a memo to Secretary Granholm cataloging the risks to the money being entrusted to the Department of Energy. Donaldson identified a history of problems with the program, noting that “few administrative remedies such as suspensions and debarments were made for the multitude of problems that occurred and were identified.”

 

Despite those problems, the program’s labyrinthine structure remains. Congress apportions weatherization funds to the Department of Energy. The department, then, distributes grants to the states; the states, in turn, disburse the monies to “community action agencies” [CAAs], organizations that administer, at the local level, various programs to aid the poor, including Head Start, “Community Services Block Grants,” and “SNAP Education & Training.”

The model used for the weatherization program illustrates how many federal anti-poverty programs operate. There are over a thousand community action agencies managing the local implementation of federal anti-poverty programs, and for many the weatherization program is their flagship. If there are problems with the management of weatherization, there are likely to be similar problems, if not worse, with the programs that are less visible.