Congressmen opposed stimulus, yet pleaded for funds

Thomas Burr and Matt Canham of The Salt Lake Tribune report that while Sen. Bob Bennett vocally opposed the stimulus bill, he simultaneously asked Energy Secretary Steven Chu "to pay special attention to several Utah projects as he doled out billions in stimulus money."  All four of Utah's Republican Congressmen voted against the stimulus, yet sought funding for projects within their state.

Brad Heath of USA Today reports that "nearly $10 billion in stimulus aid to repair the nation's tattered highways has largely bypassed dozens of metropolitan areas where roads are in the worst shape."  Stimulus funds are intended to be spent quickly and repairs to many of the worst roads would take too much time and cost too much.

An investigation by the New England Center for Investigative Reporting at Boston University (NECIR-BU) shows that regulators in Massachusetts have been slow to discipline problem mortgage brokers and lenders compared to other New England states.  "Between January 1, 2007 and June 1, 2009, The Massachusetts Division of Banks took its most stringent actions against less than 3 per cent of the mortgage brokers/lenders it was supposed to regulate."  Massachusetts has the second highest rate of foreclosures in New England.

Many homeowners have struggled to obtain loan modifications through Litton Loan Servicing, according to a report by Mc Nelly Torres for ConsumerAffairs.com. Dozens of complaints against Litton have been filed with ConsumerAffairs.com. Months-long delays on promised modifications have left many customers vulnerable to or victims of foreclosure. Litton settled a class action suit last spring "alleging that the company failed to credit borrowers' mortgage payments in a timely fashion, then turned around and charged late fees for the purportedly tardy payments. In some cases, consumers' accounts were put into default."

Carolina Journal's Sarah Okeson reports that North Carolina Treasurer Janet Cowell is hoping to recover a potential $3.3 billion loss in the state's pension portfolio by investing in junk bonds and commodities. "A new law, signed by Gov. Beverly Perdue in June, lets the state treasurer put up to 5 percent of the pension’s assets into junk bonds and another 5 percent into inflation-resistant assets including commodities, timberland and securities tied to the Consumer Price Index."

Hazardous lending practices approved by the directors of Cape Fear Bank appear to have contributed to the bank's failure, according to a report by Stella M. Hopkins of The Charlotte (N.C.) Observer. John Davie Waggett, a successful pharmacist, tried his hand at real estate development securing over $18 million in loans. The largest lender was Cape Fear, and Waggett served on its board of directors. "The Observer's examination of board meeting minutes, obtained under the Freedom of Information Act, indicates the directors often approved loans exceeding regulatory guidelines. For example, banks are generally not supposed to lend 100 percent of a property's value. That may have happened in at least one of Waggett's Cape Fear loans."

"Tens of thousands of unsafe or decaying bridges carrying 100 million drivers a day must wait for repairs because states are spending stimulus money on spans that are already in good shape or on easier projects like repaving roads, an Associated Press analysis shows." An interactive map gives details state-by-state on bridge projects funded by stimulus money.

A report by Michelle Breidenbach of The Post-Standard (Syracuse, N.Y.) shows that in many cases stimulus funds funneled through the National Institutes of Health are going towards previously unfunded proposals with no regard for job creation or economic impact. In one example, a formerly wait-listed grant for $500,000 was awarded to Cornell University for the purchase of new equipment manufactured outside the U.S. While stimulus road projects require the use of American-made steel, no such stipulation exists for equipment acquired with research grants. "It's likely in the scientific world that a lot of equipment is not made in the United States," said Sally Rockey, acting deputy director for extramural research at the NIH.

An investigation by the Wisconsin Center for Investigative Journalism and University of Wisconsin-Madison journalism students found gaps in one of the state’s biggest proposed stimulus projects: a half-a-billion-dollar high-speed passenger rail line between Madison and Milwaukee. They found that in some cases, the trains wouldn’t match current commuting and travel routes. And officials are calling the rail line “high-speed” even though the train likely would average about 70 miles per hour the first few years. Even if Wisconsin wins federal funding for the project, state taxpayers will pay millions each year to operate the new 85-mile passenger rail line.

The Sarasota (Fla.) Herald-Tribune reviewed 19 million Florida real estate transactions to determine the impact of housing fraud on the collapse of the housing market. "The year-long investigation found that more than 50,000 Florida properties were flipped under suspicious circumstances from 2000 through 2008. Those flips artificially drove up housing prices and tax bills and contributed to the crush of foreclosures that has gutted the real estate market." In Sarasota and Manatee counties, nearly half a billion dollars in defaults are linked to professional property flippers.