By Matt Kelley, USA TODAY
WASHINGTON — Federal prosecutors are investigating a dozen cases of possible fraud involving the $787 billion economic stimulus package, a USA TODAY review of government records shows.
There are an additional 88 active investigations of potential misuse of that money, according to reports filed by internal watchdogs at 29 federal agencies managing stimulus funds and the congressional Government Accountability Office. Separately, GAO criminal investigators are reviewing nine cases, acting GAO head Gene Dodaro has said.
The agency reports, which are required under the stimulus law to be filed monthly by the inspectors general, do not provide details on the investigations. However, Recovery Accountability and Transparency Board Chairman Earl Devaney said the allegations involve contract and grant fraud and include filing false statements and attempts by ineligible firms to get funding.
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"This is a pretty tempting pot of money for people to go after," Devaney said of stimulus funds.
No criminal charges have been filed. Devaney said most of the inquiries are just getting started, since the law was signed in February.
Seven of the 12 cases referred to prosecutors came from the Transportation Department, which has spent $5.5 billion in stimulus funds so far on projects such as paving roads and runways.
The recovery board, on which 12 of the 29 inspectors general serve, helps coordinate oversight. Devaney said the board's work has included creating a computer center where investigators search for improprieties such as contractors' undisclosed bankruptcies or arrests.
Obama has touted the recovery board and other accountability measures in the stimulus. "If we see money being misspent, we're going to put a stop to it, and we will call it out, and we will publicize it," Obama said in March.
That promise to fight fraud presents "a tricky situation" for the White House because Obama's opponents are likely to use fraud cases to criticize the law, said Michael Smallberg of the Project on Government Oversight, a non-partisan watchdog group. "The stimulus is a crazy political issue," he said.
It's too early to tell how successful the anti-fraud effort will be, says Brian Riedl of the Heritage Foundation, a conservative think tank. "Unfortunately, oversight of federal spending usually occurs well after the fact and well beyond the point where anything can be done about it," Riedl said.
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