Taxpayers Paid At Least $9 Million for Signs Promoting Obama's Economic Stimulus

September 17, 2010 - 7:44 AM
Republicans question the estimates as being too low

stimulus sign

Stimulus sign

(CNSNews.com) – At a minimum, taxpayers have spent $9.1 million as of July 2010 on signs advertising the Obama administration’s American Recovery and Reinvestment Act, also known as the stimulus law, according to federal officials reporting estimates to the Recovery Accountability and Transparency Board.

But the cost is probably much higher since the six government agencies that spent stimulus dollars relied largely on sampling to get an estimate of how much money was spent on posting signs near Recovery Act projects.

Most of the signs read, “Putting America to Work,” and they include the ARRA emblem along with the Recovery.gov Web address. While the Obama administration contends the signs provide transparency, Republicans believe the signs amount to taxpayer-subsidized propaganda.

Each of the six agencies stressed that only a small portion of the total stimulus money was spent on signs. The Environmental Protection Agency failed to provide an estimate on how much it has spent on signs identifying the stimulus projects.

As CNSNews.com previously reported, the White House Office of Management and Budget issued a directive in March 2009 for agencies to post signs. Some federal agencies initially required the posting of signs, but most have since backed away from requiring them to “strongly encouraging” their use.

The bulk of spending on Recovery Act signs came from the Department of Transportation, which says it spent $8.1 million on signs out of $38.6 billion in stimulus money. (See earlier story on DOT sign guidance)

“Of the $38,600,000,000, the Department of Transportation finds that no more than $8,154,000 in federal Recovery Act funding, and $433,000 in state or local funds, have been spent in the posting of Recovery Act signs, logos or emblems,” Joel Szabat, deputy assistant secretary for transportation policy with the DOT, wrote to Earl Devaney, chairman of the Recovery Accountability and Transparency (RAT) Board.  “Barely 2 cents are spent on signs for every $100 being spent on Recovery Act transportation project nationwide.”

Devaney asked the Departments of Transportation, Defense, Commerce, Housing and Urban Development, EPA and General Services Administration about the cost of the signs at the request of Rep. Darrell Issa (R-Calif.), the ranking member of the House Oversight and Government Reform Committee.

But Issa says he was disappointed with the lack of specificity in the information he was given, and he has asked for more accurate numbers.

“The agencies failed to provide you with an accurate total assessment of the cost for stimulus signs,” Issa wrote in a letter to Devaney on Wednesday.

“We are dismayed that federal agencies which spend hundreds of billions of dollars in taxpayer money are unable or unwilling to provide you with the information you requested,” Issa wrote. “The president promised the American people that he would hold stimulus recipients accountable for ‘every dollar’ of spending; a promise he cannot keep if his own departments cannot tell the RAT Board or Congress how much taxpayer money is being wasted on self-congratulatory signs or other wasteful spending plaguing stimulus projects.”

Issa said in an interview that he believes the cost of the signs is being low-balled.

“They could know. They choose not to know,” Issa told CNSNews.com Wednesday.  I don’t think there’s any question that the facts are there. They can be tabulated, but they choose not to go look for it.” While the Obama administration may believe a “non-answer” is better, the American people are “further infuriated” by the millions of dollars being spent on signs, Issa said.

In his Sept. 9 letter to Issa, Devaney write: “[O]ne statistic relevant to your inquiry of which you should be aware is that when Recovery.gov hotline users were asked how they knew Recovery Act money was at stake, approximately 40 percent of those with actionable complaints referred to the Recovery Act signage.”

But Issa said the question at hand goes beyond government waste – it’s about how tax dollars are being used: “What this is about is whether your taxpayer dollars should be used to promote propaganda,” Issa told CNSNews.com. “In our case, we have federal laws that clearly prohibit propaganda, and that’s clearly what this is.”

RAT Board spokesman Earl Pounds declined to comment on the matter beyond what the board already has reported to Issa.

The EPA said that as of July 2010, it did not have information on the total cost of posting signs at stimulus-funded projects.

“Recipients are not required to report this information,” EPA Assistant Administrator Craig E. Hooks wrote Devaney. “Therefore, we cannot provide an assessment of the total cost of posting signs, logos, or emblems,” Hooks said.

The EPA said in mid-July, its inspector-general contacted a limited number of stimulus-fund recipients (9 out of 4,687) and asked them about the signs they had purchased. “The cost and type of signs varies greatly. We did not verify the cost information provided to us,” Hooks wrote.

As CNSNews.com reported earlier, the total cost of signs for nine EPA recovery-funded projects was $6,243.

Issa addressed the lack of EPA information in his letter to Devaney on Wednesday, noting, “EPA refused to provide any information directly, and instead relied on an ad hoc study conducted by its Inspector General, which surveyed just nine of one group of 4,687 EPA-managed stimulus projects, and then certified that this flawed estimate represented EPA’s total cost assessment.”  Issa noted that sample sizes of at least 20 randomly selected “data points” are typically required to produce a meaningful estimate.

HUD, which previously suggested that recipients of stimulus funding post signs with the words “Barack Obama, President,” also used a sampling method to come up with a cost estimate. But the department was able to get a more thorough estimate than the EPA was. (See earlier story on HUD sign guidance)

HUD Deputy Secretary Ronald C. Sims e-mailed a response to the RAT Board, estimating that $314,181 out of $10 billion in stimulus funds for HUD was spent on signage.

“The average cost per sign was $100. No project signage costs in the sample exceeded $1,000 per sign. Most signs in the sample cost significantly less than $1,000, with many produced at essentially zero cost (e.g. paper copies),” Sims wrote. “The combined amount that all sampled recipients indicated that they spent on signs was $19,250, or 0.00315% of the total amount of their HUD Recovery Act grants combined.”

“Hypothetically, if all HUD Recovery Act grantees in HUD’s seven capital-intensive programs had spent the same percentage as in the sample (0.00315), the total amount spent nationwide on signage would have been $314,181 (out of almost $10 Billion in HUD ARRA capital-intensive funds),” Sims wrote.

The General Services Administration also used a sample to evaluate the cost of stimulus-funded signage for the agency’s Public Building Service.

“Based on a sample of 105 Recovery project valued at over $2.88 billion, [Public Building Service] spent approximately $120,600 for signage on these Recovery projects, or 0.0042 percent of the combined project values,” said Stephen Leeds, counselor to the GSA administrator. “These projects represent a subset of GSA’s overall $5.5 billion Recovery effort, and include new construction, full and partial modernizations, and limited-scope projects. “A significant number of other Recovery projects have yet to install signage,” he added.

Issa also found problems with the GSA assessment.

“GSA provided an estimate of its spending on signs based only on a subset of its total stimulus projects, which does not constitute an accurate assessment of total costs,” Issa wrote Devaney.

The Defense Department spent the least on signs publicizing stimulus-funded projects, based on information it provided to the RAT Board.

“Based on the available signage cost data, I conclude that ARRA logo adds approximately $100 per sign. I estimate the cost of the ARRA logo signs to DOD’s military construction projects to be approximately $11,000,” wrote Mike McCord, principle deputy to the principle accountable officer for comptroller’s office of the Defense Department. “I understand signs were used in some of our renovation/repair project, and ARRA logos were affixed to those signs.”

The Commerce Department of Commerce stressed that it spent a “minimal” amount on signs announcing stimulus-funded projects. (See earlier story on Commerce sign guidance)

“The results of our inquiries revealed that of the 65 Recovery Act construction grants or contracts used, the total cost from the posting of signs, logos, and/or emblems was minimal – approximately $76,952 out of a total award of $266,231,283 or 0.03%. Individual sign costs range from $25 to $1,950, depending on the type,” wrote Scott Quehl, chief financial officer and assistant secretary for administration at the Commerce Department.

While waiting to hear back from the federal agencies, Republicans on the Oversight and Government Reform Committee went directly to the states in an effort to the determine the cost of stimulus project signage.

So far, they have found that Ohio spent $1 million on ARRA signs and Illinois has spent $640,000, Rep. Aaron Schock (R-Ill.) previously told CNSNews.com.

ABC News reported in July that a stimulus funded project at Washington, D.C.’s Dulles Airport has a 10-foot-by-11-foot ARRA sign that cost $10,000. ABC also reported that Pennsylvania spent $157,000 on ARRA signs.

New York opted not to post signs after estimating a large ARRA sign would cost between $6,000 and $8,300, while Georgia announced it would stop posting the signs because the average sign was costing $1,200, according to a report by the Republican staff of the House Oversight and Government Reform Committee.