Cash for Appliances? Or Cash for Incompetence
Thursday, July 22, 2010
Cash for Appliances? Or Cash for Incompetence?
U.S. Rep. Steven C. LaTourette (R-OH) is renewing his call
that Gov. Strickland form an independent, bipartisan oversight
board to monitor federal stimulus spending after media reports that
the state used stimulus money for its cash for appliances rebate
program to hire a Texas company that outsourced call center jobs to
Central America.
LaTourette and several other House Republicans wrote to
Gov. Strickland in March 2009 and November of 2009 urging the
creation of the stimulus oversight board. The Governor told
the lawmakers an oversight board wasn't necessary and that he
favored a Deputy Inspector General.
LaTourette said he can't believe stimulus funds intended
to spur hiring in Ohio were used to hire a Texas company.
"This just reinforces the need to have better oversight
over the stimulus funds," LaTourette said.
In a televised by the NBC affiliate in Columbus, a state
official defended the hiring of Texas-based Parago, Inc., since it
had experience with rebate programs, but acknowledged she didn't
know the Texas company would outsource the work. The station
said the state signed a contract worth about $500,000 with Parago
to run Ohio's appliance rebate plan because it had experience with
rebate programs.
"It's no wonder only 6% of Americans believe that the
Stimulus Bill created any jobs. To be fair, it does look like
Governor Strickland used the funds to create some jobs - in Central
America," LaTourette said. "To suggest an Ohio company
couldn't be trusted to run the appliance rebate program is
insulting, and paying a Texas company nearly half a million dollars
to use a call center in Central America is astounding. This
is not Cash for Appliances, it's Cash for Incompetence."
During the report, reporter Patrick Preston interviewed
Nadeane Howard, Director of the Ohio Department of Development's
(ODOD) Energy Resource Division. She was asked why a Texas
company was running the $10 million Ohio appliance rebate program
instead of an Ohio company.
"Ohio has one of the largest energy star rebate programs
in the country," Howard says in the report. "We could not trust it
to someone who had not done this kind of work before."
She further said ODOD stands behind its decision to hire
the Texas firm even though it did not hire Americans to answer
phones at the call center. Howard was asked specifically if
she knew the company would outsource the call center duties to
another country.
"We did not know that initially. The moment we found
out, the director of this agency issued a request to Parago to
please on-shore their call center," Howard told the reporter.
The company did not comply with the request, however, and
LaTourette said he was dumbfounded by the explanation the state
provided to the television reporter.
"They don't have an on-shore call center that they can
utilize, so with the program winding down, it still resides
offshore," Howard said.
LaTourette said the Columbus Dispatch reported in March
2009 that "a divided Ohio Controlling Board" approved the contract
with Parago to administer the $10.5 million appliance rebate
program for Ohio. The vote was 4-3. Nine companies
submitted proposals to run the program, including two from
Ohio. The report said Parago would be "paid $357,300 to cover
administrative costs, and was selected based on strengths including
experience with appliance-based rebates, according to the request
submitted to the board."
The Dispatch reported in May 2009 about delays in issuing
appliance rebates and noted that Parago had 795 consumer complaints
filed with the Better Business Bureau in the last three years, but
the company has an A+ rating from BBB. The report said appliance
rebate programs in Texas, Minnesota and Iowa were experiencing
problems getting through to phone banks and delays in
rebates. LaTourette said he doesn't know if those states used
Parago as well.
The NBC4 report can be found at
http://www2.nbc4i.com/news/2010/jul/27/3/ohio-rebate-program-created-jobs-texas-central-ame-ar-167492/.