Thanks, But No Thanks! Minnesota Tribes Reject $1.7 Million in Stimulus Funds

Government giveaway turns into government giveback

It’s enough to give government a good name, if not necessarily the federal stimulus program. After all, when’s the last time the recipients of a $1.7 million federal stimulus grant had second thoughts and sent the funding back to Washington? That’s what happened recently with a high-tech project in northern Minnesota in which a government giveaway turned into a rare government giveback. In fact, it’s one of only three out of 233 broadband stimulus awards valued at $3.94 billion to turn down the federal funding, according to the U.S. House of Representatives Committee on Energy and Commerce.

In July 2010, the Broadband Technology Opportunities Program (BTOP) selected a stimulus project proposal from the Leech Lake, Red Lake and White Earth Bands of Ojibwe to create seven new public computer centers and to renovate ten existing facilities in partnership with the Boys and Girls Clubs on their northern Minnesota reservations.

Yet when the tribes did the math for the $2.5 million Headwaters Tribal Community Center project, it just didn’t add up. The federal stimulus grant contributed $1,722,371 toward the broadband project, while the tribes and their Boys and Girls Club partners’ projected share of the project was to be $793,731—about a third of the total cost. According to Leech Lake Band officials, after closer scrutiny of the project, they concluded that the final price tag for the project would be significantly more than the amount submitted in the grant application.

"The grant was written poorly," said Leech Lake Accountant Nancy Stevens. "The project would have cost more than originally thought."

How much more? Hundreds of thousands of dollars that would ultimately be billed to the Leech Lake Band, according Stevens.

To be sure, it took awhile to reach the decision to return the grant money to the US Treasury. A representative from the White Earth Band of Ojibwe told the Freedom Foundation of Minnesota that they would have liked to pursue the program, but were unable to acquire another grant to cover the shortfall. Leech Lake Band officials also attempted to revise the program's allotments, but Stevens said they were rejected by the feds.

Ultimately, it was the Leech Lake Band’s decision to forgo the project due to a lack of funds to cover. "Leech Lake was the contact for the program. If the other tribes didn't agree to pay, the burden would have fallen on Leech Lake," Stevens said.

Federal officials did not respond to FFM’s attempts to discuss the stimulus project. The objective of the Headwaters Tribal Computer Centers was to encourage computer-based homework and learning, train more parents of children enrolled in Boys and Girls Clubs, and increase the technological capabilities of small businesses on the reservations through the Bemidji State University Small Business Development Center.

                          Tips or comments? Contact Tom Steward at 612-354-2192.

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