Energy

EXCLUSIVE: Gov’t Utility Steeped In Potential Fraud Plans On Hiding Docs From Congress, Source Says

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Michael Bastasch Energy Editor
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A government-run utility in the southwestern U.S. may try to withhold documents from a congressional committee investigating financial mismanagement, according to an inside source.

A source familiar with the Western Area Power Administration’s (WAPA) information technology system has indicated the agency intends to withhold documents and data from the House Committee on Oversight and Government Reform.

“The agency asked me to withhold data,” the source told The Daily Caller News Foundation. “They’re trying to withhold anything.”

House lawmakers from both parties sent a letter to WAPA President Mark Gabriel Tuesday asking for records related to “financial and facility management” at the agency. The lawmakers’ letter comes after reports that lax oversight at WAPA led to millions of dollars in potentially fraudulent spending and letting grid security slide.

“They’re going to claim attorney-client privilege on the documents,” the source said, adding there’s basically “no such thing” when it comes to the types of records being requested about budgets and grid security.

A WAPA spokeswoman referred TheDCNF to the Energy Department for questions about complying with Congress’ demands. A Department of Energy (DOE) spokeswoman said the agency “has received the letter and we are reviewing it.”

WAPA is already subject to a criminal probe by the DOE inspector general. The little-known government utility has attracted the ire of lawmakers who says it’s steeped in potential “waste, fraud and abuse.”

WAPA is a power marketing agency within the DOE that’s responsible for transmitting electricity across 15 states. WAPA operates 17,000 miles of transmission lines that carry power from 56 government-owned hydroelectric dams and a coal plant in the Navajo Nation.

WAPA came under fire from federal regulators earlier this year for not doing enough to protect its transmission lines and substations from physical attacks. Keith Cloud, WAPA’s head of security, told The Wall Street Journal in July he’d only gotten $300,000 to pay for security upgrades at substations.

That was only the tip of the iceberg.

TheDCNF obtained internal WAPA audits detailing more than $6.8 million in potentially fraudulent purchases with government credit cards.

WAPA’s Desert Southwest Region alone had more than $220,000 spent on upgrades to General Services Administration vehicles without permission, including “lift kits, off road shocks, custom wheels and tires, custom bumpers, fog lights, winches, new radios, GPS units, and tool boxes.”

“They were just charging stuff back to customers,” a source told TheDCNF.

“The receipts would say things like ‘linemen tools.’ Nobody was looking at it and nobody cared,” the source said. “Gun cases, scopes. These guys had no business buying any of that stuff.”

“They were buying stuff and filling up the back end of Ford expeditions with items,” a second source who witnessed WAPA employees flaunting their purchases told TheDCNF. “Instead of having a cooler in their truck, they had these $800 refrigerators.”

‘Unobligated Funds’

House committee members also asked Gabriel for documents related to WAPA’s “unobligated fund balance” that’s valued at more than $750 million.

WAPA is holding these funds in limbo by not obligating them to projects, there are concerns this money should be turned over to the Department of Treasury, according to the inside source.

Leaked internal documents show WAPA’s unobligated balance was $755 million at the end of fiscal year 2015. An email from WAPA CFO Linda Kimberling told other executives there “may be some optics issues with GAO (or possibly others) we have to address” in keeping the massive unobligated balance.

A separate document drafted around 2008 is an internal WAPA memo discussing keeping unobligated balances, instead of relying mostly on federal appropriations. That document explicitly stated WAPA “should not disclose this new practice to DOE” and the White House Office of Management and Budget.

When it came to disclosing the practice to Congress, the WAPA memo just says, “???.”

“WAPA is amassing funds at a rate faster than they can spend them,” the source told TheDCNF.

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