Another Inspector General Report Slams Illegal Irrigator Subsidies

by Dan Bacher

Has the U.S. Bureau of Reclamation become a rogue agency within the Department of Interior? It’s beginning to look like that, based on recent Inspector General reports documenting the loss of millions of taxpayer dollars through Reclamation mismanagement in the Klamath Basin and Sacramento-San Joaquin River Delta.

On the heels of an Inspector General audit finding that Reclamation has “wasted” $32.2 million in illegal payments to Klamath Basin irrigators, a new federal report reveals that the U.S. Bureau of Reclamation has cost taxpayers millions of dollars by failing to collect moneys owed by Klamath Basin irrigators for nearly a decade. 

The audits have spurred calls by Public Employees for Environmental Responsibility (PEER) and other groups to hold individual Reclamation officials accountable and to reform the embattled agency.

The latest audit by the Office of Inspector General (IG) for the Department of Interior, dated September 27, 2016 but released this month, concludes that Reclamation never collected “repayment of millions of dollars of costs incurred to design, construct, and operate and maintain new head gates and fish screens” within the vast Klamath Project.   

These gates and screens are intended to keep federally protected fish “in the river and out of the Klamath project irrigation canals,” according to the IG report. 

The report from Michael P. Colombo, Western Regional Manager for Audits, Inspections and Evaluations, made the following recommendations to David Murillo, MId-Pacific Regional Director, Bureau of Reclamation:

We recommend that USBR: 

1. Identify USBR’s total costs to design and construct the A-Canal head gates and fish screens; 

2. Identify USBR’s total cost to operate and maintain the A-Canal head gates and fish screens from 2003 to 2011;  

3. Promptly notify the Klamath Irrigation District of its obligation to repay the cost to design, construct, and operate and maintain the A-Canal head gates and fish screens and the total amount that must be repaid, as determined by USBR in Recommendations 1 and 2; and  

4. Negotiate and establish a repayment contract with the Klamath Irrigation District to secure timely repayment of USBR’s cost to design, construct, and operate and maintain the A-Canal head gates and fish screens, as determined by USBR in Recommendations 1 and 2. 

Colombo asked Murillo to provide a written response to this report within 30 days

In another audit report dated October 11, 2016, the IG found that Reclamation improperly diverted $32 million in federal funds intended for drought contingency planning and helping endangered coho salmon and sucker populations to a Klamath irrigator’s group over several years without the  legal authority to do so.

“We found that USBR did not have the legal authority to enter into the cooperative agreement, resulting in $32.2 million in wasted funds spent by KWAPA (Klamath Water and Power Agency )under the agreement,” wrote Mary L. Kendall, Deputy Inspector General for the Office of Inspector General, in the audit report dated October 11, 2016. 

The report found that the program had done little to help endangered coho salmon, Lost River suckers and shortnose suckers, as it was intended to do. 

The Klamath Water and Power Agency was a water and power authority in Klamath Falls, Oregon that received water from federal water projects in northern California and southern Oregon. KWAPA was forced to close its doors on March 31, 2006 due to “disorganization” and complaints filed by PEER.

You can read my piece on that report here:

Reclamation has yet to respond to the IG audit on head gates and fish screens,  but it disputes the IG report on the $32 million wasted on irrigator subsidies and refuses to change its practices or recoup moneys illegally spent, PEER noted.

“Reclamation maintains that the reimbursement program has been an important tool in dealing with water issues in an over-allocated basin,” the Bureau claimed in a written statement.  

Interior appears to be in disarray as these scandals unfold. This intra-agency dispute regarding the misspent $32 million has been referred to Interior’s Assistant Secretary for Policy, Management and Budget for resolution. “But that post has been vacant since 2014,” PEER points out.

Meanwhile, Kristen Sarri, the Principal Deputy Assistant Secretary, left Interior on October 24 for her new position as President and CEO with the  National Marine Sanctuary Foundation. Interior Secretary Sally Jewell has delegated her authority to respond to a related probe by the U.S. Office of Special Counsel to the Commissioner of Reclamation, according to PEER.

“It looks like the Interior Secretary is letting the inmates run the asylum,” stated PEER Senior Counsel Paula Dinerstein. “If the current Secretary will not impose adult supervision, we will urge that her successor commit to implementing obviously overdue reforms of the Bureau of Reclamation as a condition of confirmation.”

Dinerstein’s organization is representing Reclamation employees who are blowing the whistle on what she says are “illegal and environmentally tone-deaf actions by the agency.”

Dinerstein said “other shoes are also expected to drop” on Reclamation. These include a pending IG audit of how Reclamation is allowing the California Department of Water Resources (DWR) to illegally siphon off funds that are supposed to benefit fish and wildlife to prepare the Environmental Impact Statement (EIS) for Governor Jerry Brown's controversial Delta Tunnels plan, a project that will principally benefit corporate agribusiness interests.

Whistleblower complaints funneled through PEER also prompted this pending investigation. 

That PEER complaint charges that:

• Those funds, over $60 million, are earmarked for fish habitat improvements under the authority of the Fish and Wildlife Coordination Act. However, they are instead being expended on work that “will harm critical habitat for at least five endangered and threatened fish species. Out of millions spent not a dime went to habitat improvements;”

• The state double-billed for work it supposedly already did with an earlier $50 million grant;

• And the state collected all of the federal funds when the agreement was executed, in violation of a 50/50 matching requirement.

The Delta Tunnels project, now called the California WaterFix by state and federal officials, is deeply connected to the Klamath River watershed. The two 35-mile long tunnels under the Delta would hasten the extinction of Central Valley steelhead, Sacramento River winter-run Chinook salmon, Delta and longfin smelt, green sturgeon and other fish species.

The project would also imperil the salmon and steelhead populations on the Trinity and Klamath rivers, a fishery that for thousands of years has played an integral part in the culture, religion and food supply of the Yurok, Karuk and Hoopa Valley Tribes.

You can read my piece on the “Tunnelgate” scandal here:

 “The unmistakable pattern in all these investigations is that Reclamation is ripping off fish and wildlife assistance to further reward already heavily subsidized irrigators, often for activities to the detriment of fish and wildlife,” concluded Dinerstein. “Both taxpayers and the environment are utterly ill-served by current Reclamation policies and leaders. Fundamental change in Reclamation is imperative.”   

To fully understand the Delta Tunnels plan, you also need to recognize the deep connection between the privately funded Marine Life Protection Act (MLPA) Initiative to create so-called “marine protected areas” in California and the California WaterFix, formerly called the Bay Delta Conservation Plan (BDCP). In spite of some superficial differences, the two processes are united by their leadership, funding, greenwashing goals, racism and denial of tribal rights, junk science and numerous conflicts of interest.

To read my report, Deep Regulatory Capture Exposed: The Links Between Delta Tunnels Plan & MLPA Initiative, go to:;

Download the latest audit report

Look at audit report on Reclamation illegal irrigator subsidies

See related Special Counsel probe

Note ongoing audit on Reclamation’s improper Delta Tunnel payments 

View departure of last remaining senior Interior Policy, Management and Budget official