It amounts to little more than petty cash in the federal billfold: about $40 million a year in grants and loans to help elderly poor people refurbish their rundown homes.
In the billion-dollar-a-day business of official Washington, several thousand individual grants of up to $5,000 apiece for new plumbing, floorboards, windows and the like hardly seem to merit a second glance.
And that may be more of a problem than anyone realizes, according to preliminary results of a Senate investigation launched at the instigation of Pete V. Domenici (R-N.M.), ranking minority member of the Senate Special Committee on Aging.
Agency, congressional and even criminal investigators tend to look at the big bucks, not the loose change, the investigation suggests. But the evidence accumulated so far also suggests there is good money to be made off small grantsmanship, with little risk.
"People look at the million-dollar loans, not the $5,000 ones," said David Rust, a minority staff member of the committee. "These programs may be so small and so scattered that no one really rides herd on them."
As a fiscal conservative from a small state, Domenici is partial to modest-scale programs without rigid national standards and big bureaucracies. But the probe thus far has led him to believe there has to be more bird-dogging of small programs -- possibly including a "real [congressional] oversight effort aimed at the small programs of the big agencies."
Domenici himself was unaware of any difficulties with the program, set up under the Farmers Home Administration as a result of 1974 Housing Act amendments, until he held some routine hearings on problems of the aging in rural northern New Mexico last April.
Amid other complaints, several elderly people told of shoddy, incomplete work paid for with their housing fixup money and related grants for weatherization and rehabilitation -- a patchwork of several programs involving federal, state and local officials.
Staff members questioned them further, turning up allegations of fraud, nepotism, political favoritism, coverups, buck-passing and bureaucratic laxity in a whole network of relatively small-scale programs that have been built up over the years to improve the lives of elderly poor people.
The New Mexicans told of receiving multiple small grants -- Department of Energy weatherization money, Farmers House Administration fixup funds, federal housing block grants, state housing assistants, thousands of dollars in all -- that sometimes left their homes in worse condition than before. Fixtures were installed so poorly they didn't work, collapsing floors were covered with cheap linoleum, walls and ceilings were left unfinished.
One thing led to another, and now Domenici, with the cooperation of Committee Chairman Lawton Chiles (D-Fla.), has launched a full-fledged probe with a specially hired investigator.
A hearing is planned for October in northern New Mexico, and Domenici is considering hearings in Washington to look into higher-level accountability for what Domenici describes as "at best . . . a very loose situation."
The FBI, bumping independently into similar complaints in New Mexico, also is investigating according to Domenici aides.
In a late-June report to the committee, its investigator, Martin LaVor, found that Farmers Home Administration and local community action agencies' guidelines for awarding and evaluating grants were "so loose they appear to be designed for misuse." He also found poor quality and incomplete work by home improvement contractors, along with what he called evidence of nepotism in awarding contracts.
In the tentative draft of a new report, LaVor added programs administered by the state housing authority and the U.S. Department of Housing and Urban Development to the list and said there was duplication of effort, poor coordination and even the use of money from one agency to cover up the failures of another. The possibility of actual fraud also exists, he said.
Moreover he added, the opportunities for abuse are so great that the problem probably is not confined to New Mexico.
Auditing, where done, is good, he said, but the findings turn mushy as they rise to the top within an agency, thereby reducing the prospects for internal reforms. Also, he quoted an auditor for the Department of Agriculture, which includes the Farmers Home Administration, as saying the department tends to pass over small programs in its auditing in favor of the bigger ones.
In the case of the New Mexico programs, LaVor said internal audits, triggered in part by local newspaper stories, turned up many of the same questionable practices that he found, but nothing was done about it.
Referring all questions to the agency's New Mexico office, a Farmers Home Administration official in Washington said, "We may have been remiss in deferring too much to state employes that were assigned to us."
LaVor and Rust recently pointed to two cases as illustrative of practices that have turned up in at least three northern New Mexico counties, populated heavily by poor, Hispanic and elderly people.
In one case, a man received a Department of Energy weatherization grant, a Farmers Home loan for his roof and a separate Farmers Home loan for his bathroom, followed by a state housing grant for the same bathroom. "He's gotten thousands of dollars and his house is still a shambles," said Rust. Among other things, the man, a doubleamputee, can't get into the bathroom in his wheelchair, said Rust.
In the other case, a woman received a weatherization grant, a $5,000 Farmers Home grant and a $3,500 state housing grant. She has since been tagged three times by state safety inspectors for faulty electrical work and her monthly electricity bill has risen from $12.60 in 1977 to $88.27 this year, according to LaVor.Now, he said, the state is planning to give her an emergency $3,100 to finish the work properly.
"It's the old thing, a dollar here, a dollar there," said LaVor. "There are so many pots to dip into that you can make real money." He noted that one New Mexico contractor got $51,000 from the Farmers Home Administration alone.
For others, the grantsmanship seems to be a family affair. In one town, said Rust, five of seven projects were done for family members of the contractor and the local contracting officer, who were cousins.In the case of family members, work is often good, he said.
As for the others, Rust said, "they had every right to assume their quality of life would be improved, but it wasn't."
"At the bottom of it all," he said, "the government may be so used to getting ripped off by profound schemes that it doesn't even bother with the routine, small ones."