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IG Report Confirms: Recovery Act 'Propaganda' Signs Were Required (PJM Exclusive)

The final reports from the inspectors general on the stimulus road signs have been turned into Congressman Darrell Issa’s (R-CA) office.

In late June, Issa requested an accounting from the various federal agencies involved in the stimulus on the bill's requirements for signage. The signs, which tell passersby a project is being paid for by stimulus funds, have cost taxpayers as much as $10,000 in some cases. Issa and Rep. Aaron Schock (R-Ill.) have publicly stated that the signs violate anti-propaganda laws which date to the 1950s.

Issa called the signs politically motivated and wasteful, despite relaxed requirements from various agencies, including the Department of Transportation:

Despite eliminating requirements to post signs, Department of Transportation agencies are still improperly focused on pushing projects to display signs crediting President Obama and the so-called "stimulus" for earmarked funding handouts. The administration’s obsession with using taxpayer money to get political credit for projects adds unnecessary expenses and bureaucracy to a spending package that’s failing to spur promised job creation in the private sector.

Earlier this month, PJM reported that the inspector general investigating the Department of Housing and Urban Development's requirements on the stimulus signage found they did not require the signs, but stated they were “highly recommended.”

PJM has now obtained the reports from the inspectors general investigating both the Department of Commerce and the Department of Transportation. The Department of Commerce did require the use of the signs, according to the IG report:

Recovery Act Standard Terms and Conditions Section B.2, page 3, requires all Recovery Act funded projects to display the Recovery Act sign throughout the construction phase. The agency awarding funds will provide additional instructions regarding specifications.

The Economic Development Administration, which is part of Commerce, did not require the signage specifically, but did require all recipients of federal funds to “construct and maintain a sign indicating federal involvement in the construction project.”

IG Todd J. Zinser noted in his report:

The Commerce requirement for signage did not begin with the Recovery Act. The Department's Grants Manual instructs agencies that fund construction projects to require recipients to erect a sign at the project site indicating that the federal government is participating in the project. Only when the major purpose of the award is construction is there a requirement for a sign. Therefore, not all Commerce Recovery Act projects included a requirement to post a sign. For example, Census did not use any of its funds on construction projects so it issued no guidance to its recipients regarding signs. There are some exceptions to the signage requirements, such as alteration of facilities (e.g., upgrading electrical systems) and projects in their early stages (before environmental assessments are completed or prior to the arrival of building materials and equipment). In such cases, a signage requirement is not applicable. Finally, our review found no instances in which a bureau had relaxed the Commerce's Recovery Act signage policy requirements or the implementation of those requirements.

The Department of Transportation relaxed its signage requirements in August of 2009 to “highly recommended” from “required.” However, the wording of the guidance seems to make clear that those wanting federal funds had better be willing to post signs, according to the IG report:

Maritime Administration (MARAD) guidance cites the President's wish to have all projects funded by ARRA to bear a recovery emblem: “The President of the United States has said that he wants all projects funded by the American Recovery and Reinvestment Act (ARRA) to bear a recovery emblem to make it easier for all Americans to see which projects are being funded by the ARRA.” However, there is no requirement for signage in MARAD grant agreements.

Similarly, other agencies within DOT do not require, but do highly recommend the signage.

The Federal Transit Administration also required the signage. FTA's initial web posting of its ARRA signage policy on April 7, 2009, stated that funding recipients were required to post ARRA signs. Specifically, the posting stated that the grant agreement for each FTA ARRA grant include a special condition that "the recipient agrees to identify projects supported by FTA by attaching the appropriate emblems as the Federal Government may require." DOT officials told us that FTA updated its policy on August 14, 2009, to encourage, rather than require, recipients to post signs.

The Federal Railroad Administration originally required High-Speed Intercity Passenger Rail grant agreements to include language requiring the signs:

The grantee shall post a sign at all fixed project locations at the most publicly accessible location and a plaque in all purchased or rehabilitated rail cars announcing that the project or equipment was funded by the U.S. Department of Transportation, Federal Railroad Administration with funds provided through the American Recovery and Reinvestment Act.

According to the release from Issa, the requirements for FRA grantees were only relaxed in July.

The FRA's decision to eliminate requirements for posting stimulus signs took effect on July 15, 2010, and follows questions and criticism by Republican members of Congress, including Rep. Issa and Rep. Schock, about the improper use of stimulus funds for politically motivated signage.