U.S. Special Counsel Blasts Klamath Irrigator Slush Fund

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U.S. Special Counsel Blasts Klamath Irrigator Slush Fund

Findings of Illegality and Waste Fail to Spark Bureau of Reclamation Reform

Washington, DC — The U.S. Bureau of Reclamation misappropriated millions to improperly subsidize irrigators to the detriment of the environment, according to findings of the U.S. Office of Special Counsel (OSC) transmitted to President Trump this month. The action validates charges leveled by Reclamation whistleblowers represented by Public Employees for Environmental Responsibility (PEER).

The two Reclamation whistleblowers, Todd Pederson and Keith Schultz, documented that their agency illegally gave $32 million to irrigators in the Klamath Project, the main water works serving Northern California and southern Oregon. Last fall, an audit by the Interior Department’s Office of Inspector General (IG) confirmed that these payments were a “waste of funds” lacking any legal authority and whose benefits flowed “primarily to irrigator contractors rather than fish and wildlife.”

Nonetheless, Reclamation disputed the whistleblowers and the IG audit findings. Capping a more than two-year review, OSC rejected every one of Reclamation’s rationalizations. In an August 8th letter to President Trump, Acting Special Counsel Adam Miles concluded that Reclamation’s position does “not appear reasonable” because in multiple reports filed over the past ten months Reclamation was unable to:

  • Cite any legal basis for its hefty financial give-away;
  • Explain how paying irrigators “constituted additional benefits for fish and wildlife”; and
  • Offer any reforms in “its legal review and approval processes” to prevent a recurrence.

“At the Bureau of Reclamation, misappropriating millions of taxpayer dollars is a no-harm-no-foul offense,” stated PEER Senior Counsel Paula Dinerstein, pointing out that these actions were criminal violations of the Anti-Deficiency Act. “So far as we know, no official will be even be reprimanded, let alone prosecuted.”

Reclamation’s illegal payments began in 2008 and continued for seven years through a series of 17 augmentations that were designed to keep funds flowing until 2023. Due to the OSC review and IG audits, payments ceased in 2015. Yet, Reclamation still claims that it did nothing wrong.

Last month, PEER wrote to the Senate Committee on Energy and Natural Resources, which is considering the nomination of Brenda Burman to serve as the next Commissioner of Reclamation, pressing the body to secure a commitment from the nominee to take corrective action. In a rebuttal to Reclamation’s report to OSC, PEER and its clients laid out a specific set of needed reforms.

“Besides being illegal, Reclamation was supporting approaches to water scarcity in the Klamath Basin that were not only unsustainable but ultimately counterproductive,” Dinerstein added. “Unless some form of responsible oversight makes an appearance, we fear that no lessons will be learned from this fiasco.”


Read the Special Counsel letter

Look at the whistleblowers’ rebuttal and reform recommendations

See PEER request to Senate Committee on Energy & Natural Resources

Look at recent IG audits confirming Reclamation abuses

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