It is probably safe to say that when President Obama signed the American Recovery and Reinvestment Act - aka the stimulus bill -- he never imagined the money would go toward buying Chinese-made solar panels for federal office buildings. But according to a recently unearthed letter from the General Services Administration's inspector general, that is exactly what happened during a renovation of the Senator Paul Simon Federal Building in Carbondale, Ill.
About $200,000 was spent in 2010 -- in violation of the stimulus bill's own rules -- to install Chinese solar panels on its roof, the Washington Times reported this week. The building wasn't some obscure outpost. Assistant Majority Leader Dick Durbin, Democrats' number two man in the Senate, has an office there, as does Rep. Jerry Costello, D-Ill., the IRS, the DEA and the Social Security Administration.
It wasn't the contractor's fault either. The IG report notes he specifically asked the GSA if it was OK to use the Chinese panels. The GSA contracting officer told him the panels satisfied "all applicable contract clauses including the ARRA Buy American Act Requirement." This was, the IG notes, incorrect.
Incidentally, the letter was addressed to two GSA officials. One has since been fired for his role in a lavish event the agency threw in Las Vegas in 2010 that cost taxpayers $823,000. The other official went on medical leave this summer, shortly before he was due to testify in a separate overspending probe.
This incident is instructive for a number of reasons. It is a neat window into why federal stimulus programs often don't work even when a project is "shovel-ready." The money isn't necessarily spent in ways that directly promote domestic job creation.
It shows that "buy American" laws don't help much either -- even federal officials whose job it is to monitor this cannot tell when it applies and when it doesn't. The apparent confusion over these panels was that their Chinese manufacturers used some American parts in the process.
Finally, it shows the absurdity of the administration's own efforts to protect domestic solar manufacturers from Chinese competition by slapping import duties on the solar panels. Not only has China retaliated by opening anti-dumping and anti-subsidy probes against the U.S., but the administration's action also ignores the fact that most of the domestic solar industry isn't in manufacturing. The majority is in installation or raw materials. So for most U.S. solar companies, China's low-cost panels have been a boon, finally making it almost cost-effective for regular people to use solar power. This is why installation rates rose exponentially in recent years. That is presumably how Chinese panels came to be on the Simon Federal Building in the first place: They were cheaper.
It makes sense for government procurers to get the best possible deal for taxpayers. Instead of clinging to the ideological fiction that federal spending is a job-creating engine, the U.S. should cut out the regulations and buy directly from China or other countries when they have a comparative advantage. If you're going to spend taxpayer money, at least spend it wisely.