The National Science Foundation appears to have allowed a nonprofit environmental group to misuse taxpayer cash to pay for alcohol, employees' Amazon.com purchases, French hotels, an office Christmas party and other prohibited costs, according to two GOP senators.
Republican Sens. Chuck Grassley of Iowa and Rand Paul of Kentucky are scrutinizing the spending of the National Ecological Observatory Network, or NEON. The lawmakers sent letters to NSF and NEON alleging that NEON receives a "management fee" each year from NSF and appears to use that fee for "unallowable costs" that nonprofits are prohibited from paying for with government cash.
Those costs included a $25,000 Christmas party, $11,000 for "premium coffee services" for NEON employees, $3,000 for board of directors dinners that included alcohol, and $3,000 for T-shirts and other clothing for NEON employees in fiscal 2013, according to the letters, sent Sept. 3.
NEON, a Boulder, Colo.-based nonprofit, collects and analyzes data from sites across the United States to assess the impacts of climate change, land-use change and invasive species on natural resources and biodiversity. According to its website, the group is "solely funded by the National Science Foundation."
Other examples of prohibited spending using government funds appear to include spending to support lobbying activities, employees' Amazon.com purchases, stays in French hotels and purchases from "Harvest Wine and Spirits," the senators wrote.
Grassley and Paul said they were alerted to the allegations of improper spending by a whistleblower who provided them with a draft audit of NEON performed by the Defense Contract Audit Agency. The audit showed that from fiscal 2009 until fiscal 2013, NEON received more than $888,000 in government funds for the "management fees" that were used for unallowable costs, they said.
The concern raised by the draft audit is "considerable," the senators wrote, "but it is amplified by the possibility this is a widespread practice within the NSF and possibly the federal government." They requested correspondence between NEON and NSF about the so-called management fees and paying for unallowable costs, and a detailed account of all the unallowable costs incurred by NEON.
The lawmakers' concerns were first reported by The Washington Post.
NSF spokeswoman Maria Zacharias said today in an email that the senators' letter "represents a pending matter, and it is not appropriate for us to comment on it." She added, "Being a good steward of taxpayer funds is a priority for NSF, and we make awards to the most qualified entities in achieving our mission of supporting fundamental research."
NEON has spent tens of thousands of dollars annually on lobbying in recent years, according to data kept by the Center for Responsive Politics. The group has spent at least $35,000 so far this year lobbying the NSF, the House and the Senate; NEON spent $80,000 per year on lobbying in 2012 and 2013, the data show.
James Collins, chairman of the board of NEON Inc., said in a statement today that the NEON Project and its managing corporate entity, NEON Inc., have "spent all funding in strict compliance with our understanding of the guidelines provided." He said the group "will be responsive to the request for information from Senators Grassley and Paul and we are in the process of compiling the records they have requested."