A U.S. government watchdog is probing whether Texas misspent federal coronavirus aid, after Texas Republican Gov. Greg Abbott and top state officials shifted roughly $1 billion in relief funds to help defray the costs of their crackdown on the U.S.-Mexico border.
The inquiry comes as Texas engaged in budgetary maneuvers to facilitate its campaign to arrest more migrants, known as Operation Lone Star. Essentially, state leaders rerouted public health and safety funds to their border operations, while relying on federal pandemic funds to replace some of the money, according to a Washington Post analysis of spending records.
On Tuesday, the inspector general for the Treasury Department said officials had opened a "review" into the way Texas has handled its federal allocation broadly. The aid was supposed to help local governments pay their front-line workers, purchase protective equipment and offset other public health costs.
Richard K. Delmar, the deputy inspector general, cited in a statement his office's mandate "for monitoring and oversight of the distribution" of the stimulus spending, which Texas received under a federal initiative known as the Coronavirus Relief Fund. He added that his agency - in cases of "unauthorized uses" - can also "direct recoupment of the money."
"In exercise of that responsibility," Delmar said, "we are currently conducting a review of Texas's uses of CRF monies."
Renae Eze, a spokeswoman for Abbott, defended how Texas had deployed its funds under the Cares Act.
"Here in Texas, we have worked with the legislature to allocate federal funds in a manner that adheres to federal guidance," she said in a statement Tuesday. "Rather than attacking Texas for responding to their border disaster that they have created and escalated in the last year, President Biden and Democrats in Congress need to stop playing politics and do their jobs to secure our border."
The new federal scrutiny highlights the steep task facing Washington as it struggles to keep close watch over the roughly $6 trillion in stimulus funds Congress has approved since the start of the pandemic. That includes about $500 billion in direct fiscal aid to cities, counties and states, a tranche of funds across two programs that carries few restrictions on how, exactly, it can be put to use.
In some cases, the flexibility has opened the door for states to pursue a host of seemingly wasteful pet projects, including refurbishing prisons and constructing new golf courses. One state, Arizona, even used the money to discourage schools from requiring students to wear masks, prompting the Treasury Department to threaten to claw back the aid.
The spending has taken on added significance as the Biden administration sounds new alarms about the need for billions of dollars in additional coronavirus aid. Congress has struggled for months to adopt even half as much as the White House initially requested, leaving some to fear that federal inaction - and poor spending decisions in the states - will leave the country unprepared if the pandemic worsens again.
"Without timely COVID funding, more Americans will die needlessly," Biden warned in a statement Monday as Congress returned to work. The president requested lawmakers adopt the money "in the next few days," separately from another spending package meant to deliver aid to Ukraine, which Congress aims to adopt this week.
The Texas controversy concerns federal dollars already in the state's possession. None of the aid it received under the Cares Act directly appears to have been used on Abbott's campaign to find, detain and deport migrants. But the governor's top advisers did appear to harness support from Washington to help rearrange their budget, funding their immigration program without cutting even deeper into their own cash reserves.
In January, for example, Texas leaders transferred roughly $480 million from key local agencies to funds that help the state administer Operation Lone Star, according to records reviewed by The Washington Post. The "swaps," as state officials termed it, did not affect those agencies because they had been backfilled with Cares Act money.
In April, Texas then transferred another $495 million from state public safety and health agencies, largely "to support the deployment of the National Guard," as Abbott described it in a letter at the time. Budget experts who advise the Texas legislature later confirmed Abbott's office had additional funds "available to it through the Cares Act" that it "gave to the agencies for public safety and public health employee salaries."
The budget moves troubled Democratic lawmakers who represent Texas in Congress. On Monday, a group of nine, led by Reps. Joaquin Castro and Veronica Escobar, asked the Treasury Department to "review" the matter to determine if Abbott "is diverting pandemic relief funds to provide the additional support for Operation Lone Star."
"Texas has struggled immensely during the pandemic, and these funds are critical to help our state recover from the devastation of the past two years," the Democratic lawmakers wrote. "Governor Abbott must not be allowed to use federal coronavirus relief funds to further his political theater at the expense of Texas families."
The lawmakers added that their concerns also extend to the way Texas has committed roughly $16 billion awarded as part of the American Rescue Plan approved last year - aid they fear might also be "misappropriated to support the failed Operation Lone Star program."
"It is negligent and irresponsible for Governor Abbot to direct additional funding to Operation Lone Star, especially if the funding in question was intended to help Texans rebuild from the pandemic," the Democrats said.
Joining Castro and Escobar in signing the letter were fellow Texas Reps. Lloyd Doggett, Colin Allred, Sheila Jackson Lee, Al Green, Marc Veasey, Sylvia Garcia and Lizzie Fletcher.
Eze, the spokeswoman for Abbott, on Tuesday faulted Democrats in response for pursuing "reckless open border policies."
"If President Biden and Democrats spent half as much energy fighting to secure our nation's borders as they do fighting leaders like Governor Abbott who are trying to stem the historic flow of illegal immigrants, human trafficking, cartel profiteering, and enough fentanyl to kill every American, we might be able to end the humanitarian crisis of their own making," she said in a statement.