The $2 Billion Stimulus Disaster You’ve Never Heard About

December 3, 2012 at 10:00 am (CH2M Hill, Government Spending, Hanford, Recovery Act, Stimulus, Taxpayer Money)

In 2009, the celebration was on for an oddly-named company known as CH2M Hill. The engineering firm, performing the vast majority of the work at a cleanup project located on the Hanford Nuclear Site in eastern Washington, had just received word of a $1.96 billion reward in stimulus money for their services.  The company immediately set about conducting job fairs and hiring 1,300 employees.

Feel good story of the stimulus, right?  Wrong.  More like a prime example of how stimulus funding was nothing more than a short-term band-aid for a long-term economic wound.

In the past couple of years, CH2M Hill has repeatedly announced layoffs that have met and exceeded the number of hires created by the stimulus, have slashed the pensions of non-union workers, and are currently demanding wage and benefit cuts from their union employees.

In January of 2011, specifically citing the drying up of stimulus funds, the Hanford nuclear site braced for a loss of 1,600 jobs, with 1,350 starting in September for CH2M Hill.

This past August, the company announced another 400 layoffs were imminent, informing members of the Hanford Atomic Metal Trades Council (HAMTC) union of the news.

All told, the Hanford site started 2011 with 12,000 workers, but lost about 2,000 nine months later.  An article by the Tri-City Herald featured several interviews with people who had lost their jobs after stimulus funding had dissipated.  Most understood that their positions were only temporary – meaning, they recognized that once the stimulus money had been thrown at the project, their jobs would be eliminated.

Why didn’t the government?

Not only was it temporary, but in the end was proof positive that the stimulus could not counter the effects of an ailing economy.  CH2M Hill lost roughly a net of 700 positions – despite the hiring that came about after their hefty $2 billion reward.

Troubling waters for Hanford workers have yet to recede.

Just a few weeks ago, nearly 1,700 non-union workers at the Hanford site had their pensions cut, with benefits accrued being frozen for 2014, and the multiplier used to calculate pension benefits being reduced from 1.6 percent to 1.2 percent.

Union workers from the aforementioned HAMTC were spared such cuts – or were they?

At the end of November, labor negotiations between the HAMTC and CH2M Hill got testy, with the company proposing significant wage and benefit cuts for their workers.

Dave Molnaa, President of the HAMTC called the proposal “an insult to workers”, explaining that “the proposal will mean less money for workers and more money kept by the corporation”.

Why would a company that received nearly $2 billion in government funding need to eliminate jobs, eliminate pensions, reduce wages, and find ways to ‘keep more money’?

A Wall Street Journal report explains it best, perhaps.  In discussing the CH2M Hill/Hanford cleanup projects, Tennille Tracy writes:

“… projects that employ people quickly are often considered ‘low-hanging fruit’ and can fail to set the stage for long-term economic growth.”

A microcosm of the entire stimulus experiment itself.

For sure enough, when the low-hanging fruit began to go bad for companies like CH2M Hill, when the stimulus funding ran out for projects at the Hanford site, all of those jobs—and then some—were eliminated.

We keep hearing about companies that received millions in stimulus funding, but only created a certain amount of jobs at an exorbitant amount.  Yet CH2M Hill continues to fly under the radar, receiving billions in funding to actually lose hundreds of jobs.

Such waste.  $2 billion in taxpayer money provided for temporary hiring, temporary funding, and a temporary patch on the economy – and you’ve probably never heard about it.

Cross-posted at FreedomWorks

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$2 Billion Stimulus Company Continues to Hemorrhage Employees

August 8, 2012 at 9:00 am (CH2M Hill, Colorado, Crony Stimulation, Economy, Hanford, Infrastructure, Jobs, Layoffs, Plateau Remediation Company, Stimulus)

We’re looking now at a net loss of about 700 jobs.

CH2M Hill was granted roughly $2 billion in stimulus funds to clean up the Hanford nuclear waste site.  The company used that money to setup a job fair and hire nearly 1,300 new employees.  When the stimulus money ran out, so did the ability to employ those same workers – and then some.  An announcement in January of last year predicted 1,600 people would be unemployed by September.

At the beginning of April, CH2M Hill received more government funding, this time in the form of a $1.3 million grant to assist those who were laid off.

To make matters worse, the President of the company, John Lehew, had to address rumors of even more layoffs in April.  Those rumors transitioned to reality this past week…

The Hanford Atomic Metal Trades Council has been notified that 67 workers it represents will lose their jobs at Hanford as a result of a planned layoff by CH2M Hill Plateau Remediation Co.

In addition, 28 people responded to a request for volunteers for layoffs, bringing the total job cuts for workers represented by HAMTC to 95.

The layoffs have been expected. CH2M Hill announced in April that it would cut up to 400 union and nonunion positions in two phases. In the first phase, 58 employees were laid off in June.

That leaves up to about 340 layoffs possible in September, when the second phase of the job reduction will occur. The potential 340 layoffs include the 95 workers represented by HAMTC.

Nowhere is the reality of wasteful stimulus spending more readily apparent than in the case of a company like CH2M Hill.  Jobs created by environmental cleanup projects and infrastructure spending, while a good idea at heart, are nothing more than temporary fixes that will not remedy the economic crisis.

We keep hearing about these companies that received millions in stimulus funding, but only created a certain amount of jobs at an exorbitant amount.  Yet CH2M Hill continues to fly under the radar, receiving billions in funding to actually lose hundreds of jobs.

Why has CH2M escaped serious scrutiny? Perhaps it is the significant donations and lobbying efforts they have doled out, targeting key Democrats in charge of the stimulus. Perhaps it is the no-bid contracts, the influence they had in shaping the stimulus, or the revolving door of employees and White House administrative positions that have allowed them to continue their dominance in procuring government funding.

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Solyndra Exec (2009): "The Bank of Washington Continues to Help Us!"

August 2, 2012 at 3:58 pm (Bank of Washington, Bankrupt, CH2M Hill, Green Energy, Green Jobs, Matthew Chiller, President Obama, Solar, Solyndra, Stimulus, Waste)

The Republican National Committee today released an e-mail from Solyndra CEO Chris Gronet from 2009, labeling the Obama administration as “The Bank of Washington” and boasting of several ways in which the company could exploit federal programs and tax breaks in order to keep the soon-to-be-doomed company afloat.

The opening of the e-mail reads:

Hi Steve,

Attached FYI.

The Bank of Washington continues to help us!

The rest of the e-mail (seen below) suggests ways to gather money from federal and state governments, and sounds eerily similar to a presentation given by Washington lobbyist Matthew Chiller.  Chiller was employed by a company named CH2M Hill, and gave their employees a PowerPoint presentation on how to secure state and federal funding.  The presentation provided employees with advice on congressional earmarks, and gave pointers on how to “work the earmark politically.”

What is the significance of the Solyndra/CH2M Hill relationship?  My report last year outlined how CH2M Hill received nearly $10 million in stimulus funding to design Solyndra’s Fremont, California plant – a plant that exceeded $733 million just to build, and featured such amenities as Disney tune-whistling robots and elaborate spa showers for employees.  Here is an excerpt from that report:

Within the $535 million loan to Solyndra were a number of sub-awards to other vendors, 40 payments of which were greater than $25,000 each. The largest sub-award went to CH2M HILL, to the tune of $9.6 million for their construction engineering services. CH2M used the nearly $10 million sub-award to design Solyndra’s solar manufacturing plant in Fremont, California.

John Corsi, the company’s Vice President of Media and Public Relations explains, “CH2M HILL performed some design services and helped with a technical engineering report.”

When asked about the price tag, Corsi stated that, “Our rates were consistent with market rates for similar work.”

He added, “This work was secured through an open, competitive, and transparent procurement process,” a contradiction to the aforementioned Washington Post report which stated that consulting firms had essentially shaped and awarded themselves pieces of the stimulus.

With millions of dollars having been secured, CH2M clearly outdid themselves on the Solyndra project, building a facility the likes that had never been seen before in the heart of Silicon Valley.  The facility covers 300,000 square feet, ran a price tag of $733 million, and was equated by some to the Taj Mahal. Bloomberg News reported on some of the extravagant amenities—amenities which might surprise for a company using taxpayer funds to maintain operations.

“It wasn’t just any factory. When it was completed at an estimated cost of $733 million, including proceeds from a $535 million U.S. loan guarantee, it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms.”

All on your dime.

While the company deflected any specific questions about building design, Corsi did state that, “The client (Solyndra) made all decisions regarding the final design specs.”

He added, “Any vetting of the relative merits of the project are the responsibility of the government.”

Another company that assisted CH2M Hill in the design of the Solyndra facility also declined comment. Erik Sueberkrop, of Studios Architecture, was on the design team for the manufacturing and office facility in Fremont, California. He stated only, “As I am not at liberty to discuss, there is no comment at this time.” The Studios website meanwhile, has scrubbed detailed links to the facility’s architecture, interior, and planning links.

While the building remained a feat of engineering, neither company saw fit to take credit now that the Solyndra scandal has broken. Each declined comment when asked to provide images or blueprints of the facility, and ignored a request to provide expense reports for the use of their stimulus money on the Solyndra project.

It would appear that both Solyndra and CH2M Hill executives did indeed work the earmark politically, and the “Bank of Washington” was more than willing to oblige.

In the wake of several Energy Department scandals it is important to analyze how taxpayer funded projects have developed, and what mistakes were made along the way. It is not a time to rush infrastructure funding in the hopes that temporary jobs will be created in an election year; it is a time to analyze where the funding is going, who is responsible for spending it, and how they will be held accountable for their actions. It is not a time to blindly grant multi-million dollar loans to companies that administration officials know will fail; it is a time to scrutinize the potential use of every dollar so they are not wasted. It is not a time for crony capitalism, but rather a time for competent capitalism.

Perhaps the case of Solyndra will serve to remind our government of a commitment to be responsible and restrained with the American people’s money.

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More Obama Pet Projects Going Under

April 18, 2012 at 3:14 pm (CH2M Hill, First Solar, Fisker, Jeff Garland, Jobs, Layoffs, Stimulus)

We covered CH2M Hill earlier today, as they have announced more layoffs in the wake of $2 billion in stimulus funding for a specific environmental cleanup project.  While their layoffs are site specific and not widespread, a couple other companies aren’t so fortunate.

From Thurber’s Thoughts:

Following bad news over the weekend, another solar firm announces major restructuring moves, including layoffs, today.

First Solar (FSLR) was kicked off the Nasdaq-100 Monday and replaced by Texas Instruments.  First Solar is based in Tempe, AZ, but was founded in Toledo under the name of Solar Cells, Inc.  Their only U.S. manufacturing facility is in Perrysburg Township.

In October, they fired their CEO.  In December, they announced 100 layoffs and a delay at their Mesa plant.  

Today, they announced further changes, including closing operations and laying off 2,000 – roughly 30% of their workforce.

Also, Weasel Zippers has this…

More Layoffs At Obama-Funded Electric Carmaker Fisker Automotive, Delaware Plant Is “Absolutely Empty”…

I’m pretty sure we can kiss our $529 million goodbye.
Via AOL Auto Blog:

Last we heard, Fisker Automotive was still “committed” to building the recently revealed Atlantic sedan at the former General Motors plant in Delaware. A few years ago, Fisker announced that site would be the company’s new domestic production home (the Fisker Karma extended-range plug-in hybrid is made by Valmet in Finland). Still, Fisker did say that any definitive statement on the Atlantic’s production location would not come until the end of the summer.

So we were interested to read new reports from local media that show more signs that the Atlantic might not ever be built in Delaware. On Friday, Delaware Online reports, 12 more workers — including engineers and maintenance technicians — were laid off at the plant, leaving “only a small maintenance team” left there. One of those let go was Jeff Garland, who had been working on community affairs and business development efforts in Delaware. He said the plant is currently “absolutely empty.” This is because Fisker has taken out the old GM equipment but has not yet installed the machines it would need to build the Atlantic. As Garland told Delaware Online, “I think what happened was the budget numbers are so tight right now and they’re working so hard to preserve as much cash as they can that something had to give. We’re not making a car in Wilmington right now, so given that situation it was an obvious place to make a cut.

We must be heading for another one of those ‘Summer of Recovery’ things…

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Confirmed: Company That Received $2 Billion in Stimulus to Drop Another 400 Employees

April 18, 2012 at 1:08 pm (CH2M Hill, Hanford, Jobs, John Lehew, Layoffs, President Obama, Stimulus, Unemployment)

This now makes a net loss of about 700 jobs.

CH2M Hill was granted roughly $2 billion in stimulus funds to clean up the Hanford nuclear waste site.  The company used that money to setup a job fair and hire nearly 1,300 new employees.  When the stimulus money ran out, so did the ability to employ those same workers – and then some.  An announcement in January of last year predicted 1,600 people would be unemployed by September.

At the beginning of April, CH2M Hill received more government funding, this time in the form of a $1.3 million grant to assist those who were laid off.

To make matters worse, the President of the company, John Lehew, had to address rumors of even more layoffs last week.  Those rumors have become reality…

Via the Tri-City Herald:

The Department of Energy’s central Hanford contractor plans to cut up to 400 positions between now and late September, CH2M Hill Plateau Remediation Co. told workers Thursday afternoon.
The layoffs will come in two phases with the first reduction in late June and the second in late September, said CH2M Hill President John Lehew in a memo to employees. Now CH2M Hill and its main subcontractors employ 1,807 people.
Layoffs will include union and nonunion employees. They also will include workers who are employed directly by CH2M Hill and those employed by the 11 subcontractors who have been with CH2M Hill since it took over the central Hanford environmental cleanup contract.
Workers had been waiting for information since last week when Lehew addressed rumors of coming layoffs, saying he would tell workers more as more information became available.
The staff reductions are needed in part because some work with federal economic stimulus money that carried over into the current fiscal year that began Oct. 1 now is finished, Lehew told employees.

$2 billion to lose 700 jobs.  Now that’s truly leading us out of the dark and into the light.

Read more here: http://www.tri-cityherald.com/2012/04/13/1901901/ch2m-hill-plans-up-to-400-job.html#storylink=cpy

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Company That Received $2 Billion in Stimulus Addresses Rumor of Even More Layoffs

April 9, 2012 at 9:00 am (CH2M Hill, Department of Energy, Economy, Jobs, John Lehew, Stimulus, Washington State University)

John Lehew, the President of CH2M Hill, a company that received nearly $2 billion in stimulus funds and eventually had to lay off several hundred employees, had a very busy day on Friday.  After news spread that the company had been awarded a $1.3 million grant to assist those who had been laid off as a result of the stimulus, Lehew made the news twice.

First, when addressing a group of students at a Washington State University civil engineering program

…civil engineers are in high demand, and contractors at the Hanford site regularly hire them.
The program’s corporate sponsors — CH2M Hill Plateau Remediation Co., Washington River Protection Solutions, Bechtel National and Fluor Corp. — all work in the area and in connection to Hanford. Their officials spoke toward the value of having a well-trained work force available and familiar with the area at graduation.
“I’m looking forward to hiring a few of you folks,” said John Lehew, president of CH2M Hill.

Optimism didn’t necessarily rule the day however.  While he may be looking forward to hiring new graduates, the prospects for Lehew’s current staff grow ever more dreary.  Also on Friday, comes this…

CH2M Hill Plateau Remediation Co. addressed rumors of potential layoffs Thursday with a memo to employees from Chief Executive Officer John Lehew.
The Hanford contractor is in the early stages of evaluating staffing and has no specific information now, the memo stated.
The current work force is aligned with the budget available for the fiscal year, it stated.
But as the remaining economic stimulus spending work that carried over to this year is completed and other work is performed, the contractor is evaluating various staffing scenarios to meet the Department of Energy’s 2015 vision, the memo stated…

All of this for a company that received a massive $2 billion from the federal stimulus bill.  We reported on the situationa few months back at Accuracy in Media:

… a Wall Street Journal report worried about what stimulating the economy now meant for the long haul, pointing out that shoveling money at nuclear-waste projects was nothing more than a short-term Band-Aid on a long-term wound.

“… projects that employ people quickly are often considered ‘low-hanging fruit’ and can fail to set the stage for long-term economic growth.”

Sure enough, when the low-hanging fruit began to go bad, when the stimulus funding ran out for the company at the Hanford site, all of those jobs—and then some—were eliminated. Reports of staff reductions at CH2M began in January when KEPR-TV announced that 1,350 layoffs were coming in September due to the end of stimulus funding.  The company had to organize a job fair for those affected by these layoffs, as well as an additional 1,000 laid off men and women at the contractor’s Hanford site. Hanford started the year with 12,000 workers but lost 2,000 positions nine months later.

Regardless, it has to leave a bitter taste for those employees who have been laid off, or are currently fearing for their jobs, to watch the President of the company talk about hiring inexperienced graduates.  Perhaps Mr. Lehew is anticipating another crony stimulation?

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Company That Received $1.96 Billion in Stimulus, Gets $1.3 Million Grant For Employees Laid Off Because of Stimulus

April 4, 2012 at 7:27 pm (CH2M Hill, Department of Energy, Economy, Hanford, Hilda Solis, Jobs, Maria Cantwell, Patty Murray, Stimulus)

Sometimes the stories write themselves.  Here are the facts…

  • A Colorado-based consulting, engineering and construction firm, named CH2M Hill, was awarded nearly $2 billion from the stimulus to perform cleanup work at the Hanford nuclear site.
  • The company used those funds to hire roughly 1,300 employees.
  • They then inflated the hiring numbers by using a Department of Energy metric known as “lives touched”, which allowed them to boast that the stimulus helped somehow helped or ‘touched’ three-and-a-half times as many people as they had actually employed.
  • When the stimulus funds ran out, so did the ability to support the jobs created or lives touched.  Roughly 1,500 employees were laid off.

And now, via the Tri-City Herald:

The Department of Labor has awarded a $1.3 million National Emergency Grant to help laid-off Hanford workers find jobs.
The largest portion of the money will be used for retraining former Hanford workers who lost their jobs as federal economic stimulus spending at the nuclear reservation came to an end.
“This grant will serve as a safety net for workers and their families during these challenging economic times,” Sen. Patty Murray, D-Wash., said in a statement. Murray and Sen. Maria Cantwell, D-Wash., sent a letter to Hilda Solis, the secretary of labor, in February, requesting consideration of a state application for the grant.
The money will help an estimated 400 former Hanford workers seeking jobs, giving them intensive employment-related assistance, including training, to help them re-enter the work force in areas of the economy that are growing, according to the Department of Labor…

…  The grant is intended to provide money for workers laid off from DOE Hanford prime contractors CH2M Hill Plateau Remediation Co. and Mission Support Alliance and more than 10 subcontractors…

“Workers formerly employed at the Hanford site are facing the challenge of finding jobs comparable to the ones they lost,” Solis said in a statement. “This federal grant aims to help lessen the negative impact of these layoffs.” 

So to summarize, CH2M Hill receives $2 billion in stimulus funds, loses a net of roughly 200 jobs, pretends they helped out over three times as many people, and then has to get a government grant to help those who were laid off find jobs.

Government efficiency… the ultimate oxymoron.

Incidentally, I encourage you to read the entire report to find out exactly why Patty Murray and Maria Cantwell have a vested interest in this company’s success.  Find it here…

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Company That Received Billions From Stimulus Also Receives Annual State Tax Break of $2 Million

February 13, 2012 at 11:53 pm (ARRA, CH2M Hill, Cleanup, Department of Energy, DOE, Economy, Jobs, Layoffs, Nuclear, Richland, Stimulus, Washington)

In November, Accuracy in Media released my report regarding a company known as CH2M Hill, an engineering firm that claimed nearly $2 billion in stimulus awards.  Most of their work concentrated on one division – the CH2M HILL Plateau Remediation Company (CHPRC) – which operated one of the world’s largest environmental cleanup projects—the Central Plateau on the Hanford Nuclear Site in Richland, Washington.

New information shows that despite their claims, the Energy Department says the company actually received $1.38 billion from the stimulus, but had an additional $3.1 billion in annual budget appropriations.  Furthermore, they are receiving $2 million in state tax breaks annually, yet still laid off thousands of workers.

The Blaze reported:

new investigative report released by Accuracy in Media Wednesday, reveals that CH2M HILL, a Colorado-based consulting, engineering and construction firm, received nearly $2 Billion in stimulus funding despite a history of kickbacks, poor conduct and contaminating their own workers. While they are not in danger of suffering the same bankruptcy plight as Solyndra, CH2M has laid-off thousands of workers since receiving taxpayer stimulus. And like Solyndra, CH2M has donated thousands in campaigns finances to Democrats.

In response to an FOI request for information, the Department of Energy reported that “CHPRC competed for and was awarded a $4.515 B contract on June 19, 2008, to complete select cleanup work at the Hanford Site.”  That award form can be seen here:

Contracts CPRC Contract Conformed Contract RL14788-Section A(function() { var scribd = document.createElement(“script”); scribd.type = “text/javascript”; scribd.async = true; scribd.src = “http://www.scribd.com/javascripts/embed_code/inject.js”; var s = document.getElementsByTagName(“script”)[0]; s.parentNode.insertBefore(scribd, s); })();

In a letter dated January 30th, 2012, the DOE explains that “…the $4.5 billion amount is for the total original contract value. The $1.38 billion is the amount of American Recovery and Investment Act (ARRA) funds applied to the contract.  The difference between $4.5 billion and $1.38 billion is funded by normal annual budget appropriations (non-ARRA).

So why the discrepancy between the company’s report of $1.9 billion in stimulus funding and the DOE’s claim of $1.38 billion? More importantly, why is a company operating a nuclear cleanup site to the tune of $4.5 billion taking advantage of a $2 million state tax break for research and development?

From a Seattle Times editorial:

HUNDREDS of Washington companies engaged in research and development in technology-related fields pay a reduced business-and-occupation tax. This break was designed to create a healthy R&D climate in our state and spur companies to maturity.
…the Department of Revenue says three companies — Microsoft, Pacific Northwest National Laboratory, which is operated by Battelle, and CH2M Hill — get up to a $2 million tax break every year. These companies do impressive work in the Northwest. But these firms do not really need state assistance.

By comparison, titans such as Google and Yahoo! received less than $300,000 in business-and-occupation tax forgiveness annually.

What R&D is a nuclear cleanup firm performing exactly?

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Democrat Lawmaker Says 20,000 Jobs is Not That Many

January 26, 2012 at 11:05 am (CH2M Hill, Dan Coats, Energy, Green Jobs, Jan Schakowsky, Keystone Pipeline, Keystone XL, Solyndra, Unemployment)

Just curious, if you or someone you know is struggling to find work, how does a statement like this make you feel?  It certainly provides a significant look into the mind of a Democrat who is perfectly fine with killing 20,000 jobs in the name of some perceived and unrealistic environmental threat.

From the Hill:

Chicago Democratic Rep. Jan Schakowsky (Ill.) drew fire from Sen. Dan Coats (R-Ind.) on Wednesday when she dismissed the proposed Keystone XL oil pipeline, suggesting the 20,000 jobs it could create were relatively insignificant in the scheme of the greater economy.

“Twenty thousand jobs is really not that many jobs, and investing in green technologies will produce that and more,” she said on Chicago’s WLS Radio Don Wade and Roma Show on Wednesday morning. “But I’ll tell you what, you know it seems to me that the Republicans would rather have an issue than a pipeline.”

“Tell that to the 20,000 people that woke up this morning and didn’t have a job to go to,” said Coats. “ ‘Well, these don’t really matter’ — I mean, this not only is jobs, this is less dependence on Middle East oil.”

Investing in the green jobs boondoggle will create that and more?  Not sure the unemployed at Solyndra or CH2M Hill would agree. 
Green energy investment has been such an overwhelming success that the unemployment rate has increased since Obama’s stimulus plan took hold, and there are now 2,000,000 fewer jobs in the U.S. today.

Is that a lot of jobs?

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