Republicans in the U.S. House of Representatives have asked the inspector general to investigate West Virginia's use of $24 million in federal stimulus funds to purchase oversized Internet routers.
U.S. Reps. Greg Walden of Oregon and John Shimkus of Illinois want Department of Commerce Inspector General Greg Zinser to scrutinize West Virginia's stimulus spending on the equipment.
"We have requested Inspector General Zinser investigate whether taxpayer funds were spent properly and efficiently," said Debbee Keller, press secretary for the U.S. House Committee on Energy and Commerce.
The state is installing the high-end routers in rural schools, libraries and small health clinics, even though the pricey devices were designed to serve research universities, major medical centers and large corporations. More than 1,000 routers were purchased at $22,600 each.
Walden and Shimkus say federal officials have a duty to investigate "waste, fraud and abuse," according to a recent letter sent to the inspector general. Their request follows a May 16 hearing on Capitol Hill during which federal lawmakers grilled the Obama administration's telecommunications chief about West Virginia's router purchase.
"In the hearing, we learned that expensive and very large capacity routers were being put into rural libraries and other facilities with smaller needs," said Shimkus, chairman of the U.S. House Subcommittee on Environment and the Economy. "Chairman Walden and I just want to find out what process was used and how decisions were made with regard to spending this federal money."
The House committee chairmen also have asked West Virginia homeland security chief Jimmy Gianato to answer numerous questions and turn over documents about the state's use of the stimulus funds. Gianato leads the state's three-member stimulus "grant implementation team."
Walden, who chairs the House Subcommittee on Communications and Technology, and Shimkus want Gianato to explain how he determined the routers "were actually needed," according to a June 4 letter. The congressmen also want specific information about the routers' "standard use" and whether the state considered purchasing two types of routers - one size for smaller facilities, and another kind for larger sites. The House Republican leaders gave Gianato until Monday to answer.
Gianato did not respond to a request for comment Wednesday.
In 2010, West Virginia received a $126.3 million federal stimulus grant to bring high-speed fiber-optic cable to 1,064 "community anchor institutions" - schools, libraries, county courthouses, 911 centers, health-care clinics and state agencies. State officials used $24 million from the grant to purchase Internet routers.
The Gazette has reported that the Cisco 3945 series routers were built to serve a minimum of 500 users and up to tens of thousands of users. But the state has installed the "enterprise-class" devices in some public facilities with only a few Internet connections. Seventy percent of the routers wound up in schools and libraries.
"Proponents of the stimulus promised to create 'shovel-ready' jobs, but in the years since, we've seen the [Obama] administration's rush to dole out taxpayer dollars has resulted in allegations of wasteful spending, which the committee is examining," Keller said Wednesday. "[The Charleston Gazette's] reports indicate this may have happened."
In a letter sent to the inspector general last week, Walden and Shimkus asked Zinser to examine West Virginia's grant application to see if it includes "material misrepresentations."
The Republican congressmen also want Zinser's office to review the National Telecommunications and Information Administration's evaluation of West Virginia's stimulus grant application, "including any steps NTIA took to verify the claims in the application."
"We understand that West Virginia may have hired its own independent auditor to review the project," Walden and Shimkus wrote in a June 4 letter. "Nevertheless, when federal taxpayer dollars are at stake, it is important that federal officials scrutinize federally funded projects to guard against waste, fraud and abuse."
Earlier this year, West Virginia Commerce Secretary Keith Burdette's office tapped ICF International, a Vienna, Va.-based consulting firm, to examine the state's use of the $126.3 million stimulus grant.
The Gazette has reported that Burdette has past financial ties to ICF's lead consultant, Keith Montgomery, under the West Virginia contract. In 2005 and 2006, Burdette worked as a lobbyist for iTown Communications, a company headed by Montgomery.
Last month, the Gazette also reported that more than 300 routers remain boxed up in storage. The routers came with a five-year service warranty, so the state already has lost two years of free maintenance on the devices.
State officials are working to find sites to install the routers. The devices funnel data, such as email and websites, from one computer network to another.
Gianato and President Obama's top adviser on telecommunications issues have defended the router purchase.
In a May 30 letter to Walden, U.S. Assistant Commerce Secretary Lawrence Strickling wrote that West Virginia's decision to purchase the same size router for 1,064 public facilities, regardless of size, was the "most economical." Strickling noted that the state's former chief technology officer, Kyle Schafer, signed off on the $24 million purchase.
Strickling also clarified a previous statement he made about router costs.
At the May 16 hearing in Washington, Strickling testified that the routers cost $12,000, not $22,600 as the Gazette has reported.
Strickling now acknowledges that his $12,000 figure didn't include "add-ons" - additional equipment that came with the devices, along with a service warranty. The extra features added $10,600 to the cost of each router.
Reach Eric Eyre at firstname.lastname@example.org or 304-348-4869.
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