U.S. Rep. Steve LaTourette (R-OH) is renewing his call that Gov. Ted Strickland form an independent, bipartisan oversight board to monitor federal stimulus spending after a TV report that state officials used stimulus money for the "Cash for Appliances" rebate program to hire a Texas company that outsourced call center duties/jobs to Central America.
LaTourette and several other House Republicans, including Leader John Boehner (R-OH), wrote Strickland in March, 2009 and November, 2009, urging the creation of the stimulus oversight board.
Strickland told them 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 that outsourced the work to another country.
"This just reinforces the need to have better oversight over the stimulus funds," LaTourette said.
According to LaTourette, there was a televised report by WCMH-TV, the NBC affiliate in Columbus, where an Ohio 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 WCMH report 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, according to LaTourette.
"It's no wonder only 6 percent 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, LaTourette says WCMH's Patrick Preston interviewed Nadeane Howard, Director of the Ohio Department of Development's Energy Resource Division.
Howard 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."
Howard 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 Preston.
The company did not comply with the request 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.
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