Who’s Watching Our Trillion Dollars?

by Diane Dimond on April 13, 2009

It Attracks Criminals

It Attracts Criminals

Get ready for a new crime wave to sweep the nation. It may take a while for us to notice, but it will come. It’ll be sparked by the billions and billions of economic stimulus dollars being doled out by the federal government.

As an understated FBI director Robert Mueller put it during an appearance before Congress recently, the infusion of cash will “lead to an inevitable increase in economic crime and public corruption cases.”

Mr. Willie Sutton

Mr. Willie Sutton

Just as serial bank robber Willie Sutton said when asked why he robbed so many banks, “Because that’s where the money is.” It’s the same thing today. Any sudden windfall of money is like an aphrodisiac to the dishonest. It happened after Uncle Sam pumped a mountain of money into the South after Hurricanes Katrina and Rita…

We taxpayers were taken to the cleaners by fellow citizens and public officials who saw a gravy train. They hoodwinked the system with unsavory business practices; they submitted false victim’s claims and used government issued emergency debit cards for everything from Hawaiian vacations, NFL football tickets, adult erotica, even the services of a divorce lawyer!

Are you ready to digest some numbers?

GAO Calculates the Damage

GAO Calculates the Damage

The General Accounting Office now pegs the amount lost to the unscrupulous in the hurricane zone at as much as 1.4 billion dollars. The FBI’s Katrina Fraud Task Force has brought charges against 907 defendants in 43 districts across the country. Some are private citizens, others are public officials, accused of lining their pockets at the expense of the voters.

Now, take those numbers and do the math on the potential for criminality with the more than a trillion dollars that’s begun to pour into our economy. The possibilities for the criminally minded are mind boggling. A tsunami-like wave of embezzlement, fraud and outright theft is sure to be the result.

So, who’s watching to make sure the money – our taxpayer’s dollars – go where they are supposed to? At this writing only one state, California, has appointed a watchdog. Her name is Laura Chick, the

CA's Watchdog

Watchdog Chick

controller of Los Angeles, a woman who’s made a career of exposing waste and incompetence where ever she finds it. As California’s new Inspector General Chick will watch the flow of the $50 billion dollars her state is expected to get from the federal stimulus program to make sure the anticipated jobs are created.

Ok. That makes me feel better – for California!  What about the other 49 states?! Think about it. Do you fully trust your state’s public servants to do the right thing with the massive influx of funds that’s coming your way?

More numbers: In the last two years U.S. courts have convicted 1,800 federal, state and local government officials on fraud and corruption related charges. Included were judges, state senators, county sheriffs, police officers, public school superintendents and, oh yeah, Illinois Governor Rod Blagojevich. Currently, the FBI has 2,430 other public officials under active investigation. In addition, pretty soon the FBI’s work on all that suspected mortgage and financial fraud is expected to come to fruition and more cases will be filed against more suspected cheaters. Whew!

FBI's Mueller

FBI's Mueller

FBI Director Mueller told the Senate Judiciary Committee, “While the FBI is surging to mortgage fraud investigations, our expectation is that economic crimes will continue to skyrocket (due to) … the unprecedented level of financial resources committed by the federal government to combat the economic downturn…”

But wait a minute. Does America even have enough FBI agents left over to watch out for the well-being of our trillion dollars? Sadly, the answer is no. It is likely that left unchecked lots more corruption will take place and years down the road the FBI will have another whole spate of cases.

Perhaps I’m being too negative. Maybe the dire economic straits we find ourselves in will galvanize and unify our population – even the criminals. Maybe the unscrupulous will behave themselves for the sake of our country and the trillion dollars will go to exactly where it was intended, to create jobs and stimulate the economy back into balance.

What do you think the odds are of that happening?  The only way we can even come close is for every state to hire its own Laura Chick and for everyone who has control over the stimulus funds to realize we’re all in this mess together. It’s only our unity of purpose that will see us through to a better day.

I think we all need to demand peak performance here. And, it’s time for the President of the United States, along with every Governor, to announce that anyone caught diverting stimulus money will be enthusiastically pursued and prosecuted to the full extent of the law. And when they deliver that warning they should mean it like their political life depends on it. HOME

{ 14 comments… read them below or add one }

Frank Praytor April 13, 2009 at 1:44 pm

Compared to what going on in my mind, your observations are downright optimistic.


DianeDimond April 13, 2009 at 2:45 pm

Albuquerque Journal reader Ted B. writes:

"One of your best columns. Only one problem, the implication that if corruption can be prevented, the stimulus money (created out of thin air) would "create jobs, and stimulate the economy back into balance". In fact, it will create a relatively few jobs, all of which will be temporary; the increase in the money supply will result in massive inflation, which is a massive flat tax imposed without legislation; and the economy will be worse off due to the inevitable market distortions and mal-investments.


DianeDimond April 13, 2009 at 2:47 pm

Albuquerque Journal reader Lewis C. writes:

" I read your column Trust Stimulus to Stimulate Crime this morning in the Albuquerque Journal. It was like a The King has No Cloths story. Where has everyone been? What is the administrations’ thinking? You are right on the money in what is going to happen. In New Mexico our Governor is under investigation, a former mayor waiting to be sentenced, two former State Treasurers in prison, the former Senate Majority Leader and University President in prison, a former Secretary of State under investigation and on and on. The dispersal of millions of dollars of renewable energy funds has been turned over to the New Mexico Secretary of Energy, Minerals and Natural Resources a minor cabinet secretary with zero experience in disbursing funds. There is no question that there will be a stimulus. Any smart young person would be well advised to become an FBI agent, assistant US Attorney or criminal defense attorney. These will be the new growth industries. And to think that people will be surprised! "


DianeDimond April 13, 2009 at 2:48 pm

Albuquerque Journal Reader Diana K. writes:

"Dear Diane, My husband and I have enjoyed reading your columns. But today (4/11/09) was especially rewarding because I have been saying, to anyone who would listen, that untold billions of rescue funds will be flying out the windows. The money will be tapped into by the opportunistic thugs out there, mostly people connected with the government in some way, to pay for their lifestyles and anything else they deem worthy of being paid for by someone else (Lamborghinis, Ferraris, etc.) The statistics from Katrina were astounding. Couldn't we learn from those?

I know you will keep up the good work and continue fighting for common sense and accountability in government.

I want to forward your column from today to all my friends and family across the country.'


Jeff Liddell April 13, 2009 at 3:33 pm

The problem with "trickle down" economics, is that it never gets to the people it is suppose to trickle down to, it stops at the top, always has and always will as long as lobbyists and political action groups are allowed to operate and contribute large amounts of money to the coffers of elected (or want to be elected) politicians. The business of politics needs to be cleaned up. Congress should not have the right to vote themselves or have automatic raises, the average American cannot do it and they work for us, we should be the ones to give or deny them raises. I will admit to voting for Obama because I was sincerely scared of another 4 years of the Republican ideals and McCain had a history of supporting Bush's policy with his votes and his rhetoric. Time will tell if I made the right decision. I think it is obvious that our two party system is outdated and basically all it does it give the dice to another shooter at the crap table. The way our government works remains the same regardless of which party is throwing those dice. The government is so accustomed to the majority of Americans turning their heads or burying them in the sand about political issues and thanks to some good media coverage of these tax bailout expenditures, we are being kept informed, you did not see anyone from the Obama camp come forward with the executive bonuses information until it was reported in the news, and their first response was for everyone involved to deny responsibility, typical politics, the other guy did it. So Diane, you bring up a good point about watching over this money, but the problem is that the party in power is appointing the people to do the watching. An independent auditor without political ties to either party should be watching the spending, but where do you find one?


DianeDimond April 13, 2009 at 3:44 pm

Jeff: Good post … And you may be interested to know that the ONE state which has appointed a watchdog (California) went the bi-partisan route. Republican Governor Schwarzenegger appointed DEMOCRAT Laura Chick. That would be a great trend to spread, eh? ~ DD


Lyn April 13, 2009 at 10:30 pm

Hey Diane
Great post. It makes my blood boil – as most people's I would imagine – that so much money is wasted…given to these idiots who decide to pay themselves enormous bonuses – AIG for one. The car companies are still strapped for cash after their bailouts – how are they ever going to pay the Government back? As I understood it, it was all a loan wasn;t it – fat chance that we will ever see that money again. Most companies should get rid of half their managers and CEO's – massive savings right there. I have little faith in the "jobs will be created"scenario promised by Obama. Oh..and all these corrupt politicians who charge everything to their expense accounts…it's diabolical..it happens in the UK too..same thing. The world is going broke…as for our Roth IRA;s and 401K's losing money..well that's just sickening. We work for years..only to see it all being flushed down the pan. I don;t think the financial future is looking good..just because the stock market did well over the last couple of weeks, many people are thinking we are out of the you know what. I have little faith in everything right now.


Barry Nolan April 13, 2009 at 10:46 pm

Ted B. is fact free. The stimulus plan has already begun to create jobs – repairing our neglected infrastructure, providing states with the money to hire teachers, policemen, and firefighters and provide funds for overextended state unemployment programs. It is not necessary or desirable to create permanent jobs – the vast majority of economists and historians agree that getting money in circulation quickly is key – increasing the "velocity of money". There have been plenty of times in the past when this was not done – and it led to deflation, contraction, misery and social unrest. A smart person would want to avoid that. Deflation becomes very difficult to get in front of and stop once it gets going – that has been a much bigger threat than inflation. Next month – the Great Bush Recession becomes the longest recession since the Great Depression. So don't take your financial advice from the GOP. They got it all dead wrong.


Jeff Liddell April 14, 2009 at 5:16 am

That is a sage idea, but under our current two party system and the favor for favor way our government operates, I really believe that the term bi-partisan is no longer applicable. I think it was Thomas Jefferson that condemned the formation of a two party system as not being responsible to the true majority of the people, as it would respond only to the smaller percentage of people with money and power, it appears he was right. Keep up the great columns Diane.


Laura Slocumb Oldham April 14, 2009 at 11:49 am

Hi Diane:
Your column "Whose Watching Our Trillion Dollars" addresses a real problem, but in part, misses the boat! Exactly what qualifications does Ms. Chick have to be the taxpayers' watchdog? Saying she has "exposed waste" is not enough. Last I heard, LA County was in dire financial straits just like the rest of CA … the biggest fiscal mess in the nation… so, her apparently ineffective work there is hardly a recommendation! Characterizing this as a bi-partisan appointment is stretching it…despite his mantle, the Terminator has hardly governed along Republican lines…. just look at all the legislation he has championed that will cripple industry after industry …daunting auto emission standards, retro-fit enviro requirements for gas stations (end of the neighborhood stn), the logging industry decimated (because the US cannot compete w/imports), etc., etc.


Laura Slocumb Oldham April 14, 2009 at 11:53 am

CONTINUED The "stimulus" is clearly a waste of money we do not have… so let's create another gov't job, that we can pay for, with even money we do not have! This is the type of insanity such uncontrolled government spending creates. While I do not disagree with your premise, that the distribution of these funds needs to be guarded … a few essential rules should result in a most of the funds being returned to the federal gov't rather than spent… like no funding of "permanent" projects or jobs that the state and local gov't s will be forced to support after the "stimulus" $ disappear. CONTINUED next post


Laura SlocumbOldham April 14, 2009 at 11:54 am

CONTINUED Any and all "watchdogs" should be appointed, on a temporary basis only, from the private sector, preferably from out-of -state (clean, owe no favors to locals)… and only from companies that have a proven record of financial wisdom… (perhaps even some retired CEO's, CFO's)… in other words, non-politicians, impartial businessmen or businesswomen, unconnected to the projects and areas where the $ will be spent, with a proven record of financial knowledge and repsonsibilty … maybe even with a bonus (yes, Americans like incentive) for monies not spent and those spent wisely – to actually create temporary or permanent jobs ultimately NOT requiring government support. CONTINUED next post
By the way, I already pay taxes in CA, NM and FL … I certainly wish those $, along with all the $ of my fellow taxpayers, had gone into financially responsible hands… so that these states would be in a position to refuse the "stimulus" monies that will only create more government to support. Sad.


Laura SlocumbOldham April 14, 2009 at 12:17 pm

PS Bipartisan would be appointing a Republican or Independent or Libertarian to safeguard spending the Democrat's spending package.


jeff liddell April 17, 2009 at 2:51 pm

Those of us longer in years and shorter on time may not feel the full effects of the rampant spending being done, is it necessary to bail out industries that have not been truly responsive to the needs of working class middle Americans, I cannot answer that question, again only time will tell. I know my son and grandchildren will feel whatever repercussions may come from all of this. Technology is a wonderful thing, right? I have a cell phone only because it is cheaper than a land line, but the cell phone stays on my computer desk, when I am out and about, I do not wish to be bothered and I don't want to make phone calls. Direct TV now tells me I can program my television service from my cell phone, that is a really important thing to have, right? In terms of our basic communication needs, message recorders, pagers and all those pay phones that were around was enough. I have witnessed several near automobile accidents in the past few years involving people talking on their cell phones while driving. Paying to type someone a message from a telephone seems a bit ironic to me. Automakers, years and years of technology and design, mostly irrelevant to the basic need of transportation, and passing all of those costs to us and yet they still managed to "drive" themselves into near bankruptcy and want us to bail them out. As the cost of renting an apartment or home increased, especially over the past decade, those paying rent were trying to change rent payments into mortgage payments without having a down payment on that dream home. Mortgage companies saw the opportunities and to assist people in making that change began to inflate appraisals to help them succeed, I know this to be true, it was done for me three years ago, fortunately, to date, I am not one of those having trouble making the mortgage payment and I participated knowing what they were doing because I wanted out of that apartment. These mortgage companies knew this was a bad business practice and continued knowing that at some point it would all cave in, and now they want us to bail them out. My question is that with the bailout money, did the persons that went into foreclosure get their homes back, or did the mortgage companies get to keep the bailout money and then resale the foreclosed homes, if that is the case, they should not need so much bailout money should they? With the exception of medical technology, today's advances are not designed to make your life better, just easier, merely advertising ornaments to hook you into their basic services. Bailing out these nationwide industries may be a necessity, again, I not an expert, it just seems to me that we do not need a government that supports greedy business practices from the top down to gain favor from prospective campaign contributors, but rather from bottom to top and protect all citizens at the same time. Businesses or people with a good service at a fair price deserve to make a profit, they do not have the right to rape the American public while making that profit, and should not be protected from punishment when they do.


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