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related to Recovery Act spending and allows for the reporting of potential fraud, waste, and abuse.

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Recovery Advisory Panel Hears from State Officials

Governor Martin O'Malley of Maryland. (Photo courtesy of Governor O'Malley's press office)

Maryland Gov. Martin O’Malley, speaking before the Recovery Independent Advisory Panel, said that “transparency, openness, and accountability’’ gives citizens greater opportunity to witness the workings of their government.

The four-member panel, which advises the Recovery Board on issues of waste, fraud
and abuse, held its second public meeting on January 25 in Annapolis. In welcoming remarks, O’Malley applauded the work of the Recovery Board and said his state was using
its own Recovery website to promote transparency and guard against wasteful spending and mismanagement.

O’Malley said the Recovery Act, which includes $787 billion for contracts, grants,  loans,  entitlements and tax benefits, “has been a lifeline during the national recession—even ,’’ he said, “in a state such as Maryland where we’ve weathered the economic storm better than most.’’

According to O’Malley, the Recovery Act funded 15,330 jobs in Maryland during the quarter ending December 31. Additionally, he said, “we’ve been able to use Recovery resources to protect critically important priorities like public education and public health.’’

The Recovery Independent Advisory Panel meeting. (Photo courtesy of Governor O'Malley's press office)

Chris Sale, the advisory panel’s chair, agreed that transparency and accountability were “essential to catching the bad guys.’’ She said the panel, which previously met in Cambridge, MA, was holding a hearing in Annapolis because its members believed it was invaluable “to get a sense of what is happening on the ground.’’

O’Malley was one of several speakers to address the panel, including Arizona’s leading Recovery official, the federal Inspector General who oversees the Internal Revenue Service, and the founder of a prominent watchdog organization based in Washington, DC.

Jim Apperson, the Director of the Governor’s Office of Economic Recovery in Arizona, said the economic recession had devastated state governments. “When the downturn hit,’’ he said, slapping his fist into his hand for emphasis, “it really hurt.’’

He said Arizona was forced to cut $2 billion from its budget in three years. Among its solutions: selling state buildings, including the state capitol, and leasing them back. “That is how desperate states are,’’ he declared.  He said that the Recovery program set aside $6.5 billion for recipients in Arizona.

In response to a question, he said Arizona had received only five allegations of fraud, waste and abuse, none significant.  “We put the fear of God in people who received this money,’’ Apperson said. “…I think that got people’s attention. I told my people, ‘I am not going to be wearing an orange jump suit in the next few years.’’’

On the issue of fraud, waste and abuse in the Recovery program, J. Russell George, the Treasury Inspector General for Tax Administration and a member of the Recovery Board, provided the panel with a detailed outline of the work his office has done.

In reporting on the First-Time Homebuyer Tax Credit program, George said that his office documented “a significant amount of fraudulent and erroneous payments.’’ One audit, he said, found that more than 19,000 taxpayers claimed $139 million in credits for homes they had not yet purchased. In another report, he added, his staff discovered that $9 million went to some 1,300 prisoners who reported purchasing homes while incarcerated.

In an audit of taxpayer returns and funds, he said, his office also discovered that nearly $111 million in Recovery Act-related benefits were paid to more than 125,000 people  because of errors made by taxpayers and the IRS.

In discussing transparency and accountability issues, Gary D. Bass, the founder and executive director of OMB Watch, praised the Recovery Board for its development of and its oversight program, calling the efforts “remarkable achievements.’’ He also said that the detailed reporting by recipients of Recovery Act funds was “a game changer’’—the first time that “recipient reports were filed in an electronic and timely fashion’’ on a government website., he said, “could be the model’’ for how all government agencies report on spending.


But he said the Recovery Board needed to do more to achieve full transparency and accountability. “You still do not have enough information about the ultimate recipient,’’ Bass said, referring to the data posted on “You need deeper reporting.’’ He also said that the quality of data submitted by recipients needs better oversight by federal agencies.

Referring to jobs funded under the Recovery Act, he said that the public is still not getting enough information. “We don’t know who got what type of jobs, the pay level, the benefits,’’ Bass said. “There is not enough information to make policy judgments,’’ which he described as “a huge weakness’’ in the reporting process.

He also said that the public deserved more information on entitlement payments and tax benefits.  The Recovery Board, he said, posts data only on recipients of $275 billion in contracts, grants and loans, or about a third of the spending.  “There is nothing much on entitlements and tax benefits,’’ he said. “We all know about it. Why don’t we try and do something about it.’’



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