A close look at stimulus funds reveals sleight of hand
By Joseph Gallagher
When SEBCO, the Longwood-based housing organization got a check from the federal government for $359,838, its president Peter Cantillo was pleased but not surprised.
But when he learned that the funds were supposedly part of the Obama Adminstration’s stimulus package, Cantillo was taken aback.
He does not understand why federal assistance SEBCO has been receiving for 20 years would now be re-categorized as funding from the American Recovery and Reinvestment Act, the $787 billion federal program intended to kick-start the economy, create jobs and shield Americans from the worst blows of the recession.
The money was for the Section 8 program that subsidizes rents for low-income people who live in the Parkview Apartment building in Tremont.
Calling the funds stimulus money “seems disingenuous,” Cantillo said in a telephone interview. “Why would they classify existing Section 8 rental assistance payments as new money? In theory, if there was no stimulus money they would have to pay for this anyway. These are senior citizens living in these buildings and you’ve got to continue to subsidize their rents.”
An examination of federal records posted on the government website recovery.gov shows that millions of dollars of Recovery Act funding that has been reported as being used to stimulate the Bronx is not actually new money, and other funding attributed to the Bronx is not being used in the borough at all.
Adam Glantz, a spokesman for the federal Department of Housing and Urban Development, said the purpose of the check to SEBCO was to eliminate gaps in funding that have traditionally been a problem for these buildings in years past.
“We’ve made money available–recovery money–to give owners who participate in the Section 8 program a full year of funding, without interruption,” he said.
But Wilhelm Ronda, director of planning in the Bronx Borough President’s Office, remains uncertain as to why the Section 8 funds are being classified as Recovery Act money.
“I have the same question; whether or not it’s just substituting previously funded funds with this new source of funding,” Ronda said, though he added he was “thrilled” that the funds were arriving.
In addition to housing funds, education money has also been rebranded as stimulus money. For example, in May, 2008 Manhattan College in Riverdale received $906,000 for Pell Grants–need-based grants for low-income undergraduate students–through the Department of Education.
Like Section 8 funding, Pell Grant money is renewed year after year. But in May, 2009 when the college received approximately $740,000 for Pell Grants, the money was classified as Recovery Act funding.
A representative from the student financial service center at the college said that the funding was automatic, and not a result of a request from the college.
Funds for other projects ascribed to the Bronx aren’t being spent in the borough at all.
Urban Health Plan Inc., a South Bronx-based health care provider was awarded $1.3 million in Recovery Act funding. Although the money is reported as aid for the Bronx, it is actually being spent in Queens.
According to an Urban Health Plan press release, “the stimulus package funding will be used to create primary and specialty care for 4,000 residents of . . . Queens at UHP’s new health center Plaza del Sol.”
(Urban Health Plan also received a $1.36 million grant in June for renovations in the Bronx, and, at a White House ceremony on Dec. 9, President Obama announced that Urban Health Plan would get another $12 million to build an addition to its main building on Southern Boulevard.)
Then there’s the money that cannot be traced at all. Some $212 million has been dispersed through the Department of Education, according to the government website that tracks the funding. It is uncertain where and how that money is being used. An attempt to contact the Department of Education was not successful.
A version of this story appeared in the December 2009/January 2010 issue of The Hunts Point Express.