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Stimulus Funds Went to Nonexistent Zip Code Areas [Updated 7X]

By   /   January 3, 2010  /   News  /   64 Comments

[As other state-based journalists uncover similar problems we will continue to update this report. Those updates appear at the end of the story.]

First it was phantom Congressional districts. Now it’s phantom zip codes.

Last month, we reported on federal stimulus money credited with creating jobs in nonexistent New Mexico Congressional districts. Further examination of the most recent report on the recipients and uses of New Mexico’s share of the $787 billion stimulus shows jobs created and money going to zip codes that do not exist.

New Mexico Watchdog broke what became a national news story, and fodder for Jon Stewart and Steve Colbert. The website launched by the Obama Administration to track the destinations of billions of dollars of stimulus funds under the American Recovery and Reinvestment Act showed billions going to nonexistent Congressional districts. The website, recovery.gov, reported $26.5 million going to ten New Mexico Congressional districts that do not exist. Those millions were credited with creating 61.5 jobs. Spadework by our Watchdog counterparts in other states showed a total of $6.4 billion reported as being allocated to 440 nonexistent, or “phantom,” Congressional districts.

The agency charged with tracking the stimulus funds, the Recovery Accountability and Transparency Board, attempted to eliminate this embarrassment by lumping all the billions reported going to nonexistent Congressional districts into a new category called the “unassigned” Congressional district.

Closer examination of the latest recovery.gov report for New Mexico shows hundreds of thousands of dollars sent to and credited with creating jobs in zip codes that do not exist in New Mexico or anywhere else. Moreover, funds reported as being spent in New Mexico were given zip codes corresponding to areas in Washington and Oregon.

The recovery.gov site reports that $373,874 was spent in zip code 97052. Unfortunately, this expenditure created zip jobs. But $36,218 was credited with creating 5 jobs in zip code 87258. A cool hundred grand went into zip code 86705, but didn’t result in even one person finding work.

None of these zip codes exist in New Mexico, or anywhere else, for that matter.

The recovery.gov report also credits New Mexico with $131,139, though the zip codes receiving these funds (but creating no jobs) are in fact located in DuPont, Washington, Richland, Washington, and Gales Creek, Oregon.

These errors were found by checking the zip codes reported at recovery.gov against the United States Postal Service’s on-line zip code locator. Coming on top of our discovery of millions of dollars reportedly going to ten phantom New Mexico Congressional Districts, this latest discovery confirms that the data released by the Recovery Accountability and Transparency Board, at least for New Mexico, contains serious errors. All told, we have found over $27 million dollars that has been reported as going to either nonexistent Congressional districts or nonexistent zip codes.

As in the case of the phantom Congressional districts, the dollar magnitude of the errors we found in little New Mexico was eclipsed by the repetition of these glaring reporting errors across the nation. If we can find nonexistent zip codes, we have no doubt that our counterparts in other states, which have received much more money, will again be able to repeat and expand upon our results for the Land of Enchantment.

The next quarterly report tracking stimulus funds, and reporting jobs created or saved by expenditure of those funds, is scheduled to be posted by the Recovery Accountability and Transparency Board on January 30, 2010. The reports are docketed for quarterly releases. The discovery of errors, raising questions about the integrity and accuracy of the data, have occurred with the release of every report.

Update West Virginia Watchdog’s Steve Allen Adams reports $28 million in stimulus funds going to what he has discovered are nonexistent zip codes.

Update Nebraska Watchdog’s Joe Jordan has found millions going to nonexistent zip codes.

Update Scott St. Clair, the watchdog at the Evergreen Freedom Foundation in Washington state finds stimulus funds reported as going to nonexistent zip codes.

Update Paige Winfield at Old Dominion Watchdog finds millions–$9.5 million–going to nonexistent zip codes and other significant errors.

UpdateTom Steward at Freedome Foundation of Minnesota finds hundreds of thousands of stimulus bucks reported going to nonexistent zip codes.

Update Todd Shepherd of the Independence Institute finds millions reported going to nonexistent Colorado zip codes.

Update Andrew Griffin at Oklahoma Watchdog finds $11.5 million reported by recovery.gov going to nonexistent zip codes.


Jim formerly served as staff reporter for Watchdog.org.

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  • Bird

    This money is in somebody’s pockets–this admin is so corrupt. If we ever get a news media interested in the truth, this clown is going to make Nixon look like Shirley Temple.

  • huerfano

    When Governor Richardson brought former governor Toney Anaya in to oversee the distribution of the stimulus money, I said to myself, what could go wrong? Now, I know.

  • alanstorm

    This article discriminates against Imaginary-Americans!

  • Drew

    I don’t get where the rest of this story is.

    There are two major things that could be going on here: either money is being funneled in an illegitimate way, in which case there is a huge huge problem that needs exposure ASAP, or the reporting process is sloppy, which needs addressing, but isn’t necessarily a particularly substantive problem in and of itself (previous administrations made no attempt to report these sorts of things on this scale).

    That’s the meat of the story, and precisely what a good watchdog group would want to get to the bottom of. Comparing numbers on an excel speadsheet and calling it a day is just not ENOUGH muckraking.

  • The article above demonstrates why it matters to check and then cross-check facts. Clearly this was not done here or, if it was, the reader is left without knowledge of what was learned.

    For example and on the simplest level, missing is language explaining the inquiry that was made into how government deals with incoming data that has wrong or mistyped zipcodes. All large datasets have errata in the fine detail, including corporate files that have come into the public record or those sold by vendors. Of course we could spend more taxpayer dollars making sure every zip code is right, but how efficient would that be?

    The government, for its ownpurposes, actually creates some nonexistent “counties” and “cities” and other geographic identifiers because of how it uses the data. One of these “counties” is in three states. That seems shocking unless you do the work to find out the reasons this is done, which then allows analysis of whether that makes sense or in what context it makes, or does not make, sense.

    Are you suggesting the money was just ripped off? The post above does not make that case, it just inflames.

    All the article above does is leap on a minor fine detail point with no evidence of an understanding of how organizations (government, corporate, nonprofit, academ,ic) gather and report data.

    Have you asked the agency that created the dataset to explain? Have you filed for its protocols on creating the reports? What was theresponse? Have you asked any of the thousands of people who work with datasets like this? Have you asked the IG or any other oversight agency?

    Are the “phantom” congressional districts because a group of jobs may be in multiple districts? Is it sloppy work by data entry clerks? Is it badly designed forms where incoming information does not match outgoing reports? None of these questions seems to have been asked and they certainly are not answered and yet they are basics.

    In short, do the hard work of reporting out the facts instead of jumping with glee on a data point that confirms your point of view.

    The result may show things are worse than you imagine. It may also show there is no story here.

    Because of the decision to write without reporting out the facts– by asking, checking, crosschecking, asking, crosschecking, asking, crosschecking again and again — there there is no way to tell.

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  • There’s a potentially simple answer for this and the “nonexistent districts,” of course: lousy data entry being done by the folks who are supposed to be reporting this to the Feds. Transpose two digits here, mistype a “9” instead of an “8”, etc.

    Unfortunately, however, this raises the specter of a bureaucracy that doesn’t care enough to double-check who’s tracking the funds in question, and reporting their incompetence and neglect for all to see.

    Transparency indeed.

  • Response to Davidcay and Drew: We believe taxpayers are entitled to accurate information from their government, period. No ifs, and or buts. President Obama promised accountability that “would track every penny” of the stimulus. Well, so far that hasn’t happened in any of the reports. The mere fact that we have discovered nonexistent zip codes reported as receiving stimulus money, on the heels of the discovery the government reported $6.4 billion going into nonexistent Congressional districts is news Americans deserve to know.

    The recovery.gov purports to tell us where the money is going. (It has a button on the tool bar entitled “Where is the money going?). Answering the question for taxpayers is its very reason for existence, and for the taxpayer money it has consumed.

    I think we would all agree that if a bank made errors like this, for instance, reporting it had sent funds to nonexistent accounts, heads would roll. We wouldn’t be striving to find excuses. The mere fact of the error in handling and accounting for our money would be enough. Same goes for government. We don’t believe in “good enough for government work” as the standard. Nor do we believe it is our job to explain why the bureaucracy has so hugely and repeatedly screwed up. What matters is they have continued to put out unreliable–blatantly unreliable–information upon which they except us to rely, resting in the assurance that “every penny is being tracked.”

    This latest report confirms the sloppiness and indifference with which the stimulus funds are being tracked. Obviously, no one has bothered to check the accuracy of the info being given to the American people–except for little old us and other kindred, curious spirits. We think those errors in reporting, so obviously undermining the integrity of the data, are newsworthy in and of themselves.

    Are we saying the money was stolen? We didn’t write that. We reported money is being accounted for as being sent into nonexistent zip codes. Where did it go, what will recovery.gov do to correct these errors in its next round of disclosures? We don’t presume to write what is an ongoing drama in one omnibus act. And we are pleased to provide raw material for other bloggers and journos to grind in their own mills. Thanks for reading and showing enough interest in the subject to offer your thoughts and criticisms.

  • Les Nessman

    But I’m sure they’ll do MUCH better with healthcare….

  • JMA

    I remember the valid arguments liberals presented with Dick Cheney and his Haliburton connections when they received no-contest jobs on rebuilding Iraq.

    I think the Obama White House, when all is said and done, will redefine corruption and big government incompetence when all is said and done. What’s going on right now and NOT being reported on by the mainstream media is unfathomable.

  • Jim McCaughey

    Some how, if this had been done under Bush, The Huffington Post would be having a field day. Last look, they are still bashing Cheney.

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  • Mr. Scramnatino, your rebuttal proves nothing except that you have not done the work to establish if there is a real problem or not.

    There may be a real problem here, but you have not shown that. Indeed, you have not even come close.

    If there is a problem a thorough job of checking and crosschecking will establish that. All you have done is show that something fell from the sky and, like chicken little, concluded that the sky is falling.

    Go do the work. Don’t defend laziness.

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  • Dear Mr. David Cay Johnston: I just bought gas at the pump using my credit card. I had to get my zip code right. That was only $27.30. The government is getting the zip codes wrong for millions of dollars, in addition to all their other errors, like reporting money going to nonexistent Congressional districts. I checked the government’s data. They didn’t. I’m not the one defending laziness. You are.

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  • Forrest

    It will be interesting to see what the democrats have in their campaign coffers in the upcoming elections. I’m sure that the revelation will be quite “stimulating.”

  • Mary

    Most of the other news media on TV, they’re afraid to tell what they know. Their bosses tell them what to not say. You dig? Yeah so I need some money and I am furious. furious So don’t be surprised if there is no 2010 election, because it will be contested because someone up in that white house wrote it down and we will be under someone’s thumb. You;ll only be allowed to flatulence three times a day. I give up!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I hate that zip code thing. that is awful, they have no right!!!!!!!!!!!!!!! go to atlahmedia and he’ll tell you the score.

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  • Bruce Larsen

    Once again, congratulations on getting national TV coverage. NM needs to be recognized for something, anything, positive and you have done it again.

    You and Paul are watchdog heroes!

    Bruce Larsen

  • Simon

    Every American should stop paying their medical bills from governmental health care agencies and stop paying their student loans. If the feds have millions to dribble around to non-existant zip codes and districts, they certainly have enough money to bail out main street. Who is prosecuting these criminals??

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  • It’s only appropriate “phantom” money is going to “phantom” districts and “phantom” zip codes to create (or save!) “phantom” jobs for what will be “phantom” voters come November.

  • James

    Response to David Cay and Mr. Scarantino

    I have read both of your arguments and feel that I have to go on the side of Mr. Scarantino. This is a story!

    Although I have to agree this story doesn’t answer the question of where the money is going, this story isn’t supposed to. This is a story about accountability. I as a tax payer feel it is the governments responsiblity to be accurate. Albeit the first time the government is trying to be transparent, what good is it if it isn’t accurate? This isn’t a story about where the money is really going, this is a story about the government feeling Americans don’t care if they are accurate as long as they can throw numbers our way.

    As for defending laziness, I again would have to agree with Mr. Scarantino. This is the laziness of the government, not the journalist. He reported the news accurately. Giving us enough information to allow us to do our own research, while bringing us the information to research. There are bigger stories, and now they have an opportunity to gather more information from their readers. They then can accurately give us the rest of the story.

    If someone is promising you transparency, do you just accept whatever they say? They threw out numbers to justify their promise. If I wasn’t accurate on my tax returns, think they would notice?


  • Maria

    New Mexico Watchdog. Great job, you guys! Would you possibly have time to do a report on what the new mandates from the Healthcare Reform Bill are going to cost the State of New Mexico? We are already $1 billion in the hole with more to come. I am skeptical that the State Legislature and Governor will bother to take the costs of new healthcare mandates into account when addressing the State’s deficit spending.

    Drew and David Cay Johston are clearly not New Mexicans or they would have no problem with the concept that money “just disappears” here in New Mexico. It is the way politicans do business in this State!

  • Berry

    The Recovery Accountability and Transparency Board would like to thank New Mexico’s watch dog group for point out these errors. To eliminate this embarrassment from reoccurring, we have taken steps NOT to report where any of billions of dollars of stimulus funds under the American Recovery and Reinvestment Act is going!

  • nyp10025

    Hey Mr. Johnston: I do not think we can count on Mr. Scarantino to determine whether these stimulus funds were spent on non-existent projects or whether this is a matter of a simple coding error by the fund recipients. But you are a well-known investigative reporter who knows how to dig through databases. Perhaps you could look into one or two of these and report back to us. Who knows? Perhaps there is some kind of real story here, be it of actual fraud in federal contracting or of deliberately misleading scandal-mongering by ideological opponents of the Obama administration.

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  • Here we go again with people who don’t seem to have very high expectations of their government and are willing to accept “good enough for government work” as the bar. Perhaps we’ve become so accustomed to government’s incompetence some of us (but not this site) have become numb. Since when was government’s inability to accurately tell its citizens where millions of dollars have gone not “a real story”? Maybe since Jan. 20, 2009. I am not a GOP partisan, but I think that if this series of screw ups, following a pesonal Presidential pledge of precision, had occurred under GWB, it would be a “real story” to those who seek to defend the error-prone accounting of the stimulus billions as something about which taxpayers need not be bothered. The fact that these errors continue to be found around the country (as we predicted) further validates our reporting.

    One last point. You can try this from home. Make repeated glaring data entry errors on your personal or business tax returns. Just for fun, claim to live in a state that doesn’t exist. Or claim deductions for travel to nonexistent cities. When the IRS dings you, try telling them it’s not “a real story” and they should leave you alone because the IRS certainly has better things to do. Let us know how it goes. God bless.

  • Dims are crooks,given!But you have to understand all segments of the US are in generational flux.The 60’s hippies are a decade out now from destroying America,due to their “embarrassment”.People don’t get educated now,they’re indoctrinated,I was lucky,in engineering,you can’t lie and obfuscate as people will die.But,being gum bumping politician,lawyer or journo,lies are needed to hide your agenda.

  • nyp10025nyp

    If someone applying for a grant miscodes a zip code or a congressonal district I suppose that is unfortunate. When hundreds of billions of dollars are allocated across the country very rapidly in order to alleviate a major national emergency I am really not surprised and don’t really care. If, on the other hand, the money is not actually being spent, or is disappearing into non-existent projects, that is a major problem that implicates the actual premise of the stimulus program. Mr. Scarantino has, for all intents and purposes, admitted that the latter problem is not occuring. If he ever actually succeeds in demonstrating that stimulus funds are not being spent on actual stimulus projects, I hope he will let us know.

  • It is hard to ever prevent waste, fraud and abuse when the first level of scrutiny, being able to accurately report where the money has gone fails. In this case, we already have one up-close example of how the stimulus is not producing as promised: the $18 million website created to track the money accurately simply does not work. The other issue, nyp10025p, is that the website claims to show the impact of the stimulus, reporting the jobs and where they are being created. Reporting jobs in nonexistent geographical areas falls short of that goal. And, as other journalists are now reporting, it looks like jobs reported in the nonexistent codes are sometimes double counted, appearing elsewhere in the country. They are using the tip developed here. But, I am glad you don’t have any problem with the government using your $ to tell you where the stimulus money is going and then breaking that promise. You’re a saint. And obviously quite indifferent about how your tax dollars are spent.

  • Steven Pasquier

    The money (phantom congressional districts or non-existant zip codes) is going somewhere other than where the FED says it is. And if the FED says NM received X dollars, why isn’t the state government screaming about receiving less than what the Fed reported or at least correcting the Fed so the money does find its way to the right place for allocation of +430k each for the 61.5 jobs created with $26.5 million?

  • tullius

    David Cay Johnston,

    Jim, et. al. have dealt with most of your assertions, but I have this question:

    Why is the administration creating their own definition of the term for the intermediate tier of unitary state government (i.e., county, most commonly), in lieu of using the readily available, free, and lucid definition that already exists under each state government?

    If the administration used the existing state defined parameters for counties, we’d not have to pay for new ones to be devised, using an obscured method, with an end result that is useless.

    At very least, it would do away with the problem of “counties” split amongst three states, correct?

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  • And this surprises anyone why…?

    Look, all levels of our government, from local all the way up to the federal level are rotten to the core. Look at what people like Walter Burien have uncovered regarding Comprehensive Annual Financial Reports. In short, government lies every time they say they are “under budget”, because they only include tax revenues in their budgets. The CAFRs are the “second set of books” that they don’t publicize:


    This is not to say that everyone who works for the gov’t is a crook, because the corruption is compartmentalized. They are however choking on their own “success”, because as their plans to rape, pillage, and control society unfold, they have to bring more and more people into the fold who may or may not be willing to go along with their plans. As they try to sift through more and more data to keep tabs on their “subjects”, their burden only becomes that much greater. They will lose and they know it.

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  • ignatz

    [[I think we would all agree that if a bank made errors like this, for instance, reporting it had sent funds to nonexistent accounts, heads would roll.]]

    Banks make errors like that all the time.

    Why? Did you think private corporations had perfect data clerks?

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  • Dimduck

    I think that perhaps instead of believing what you read or see in the press in America or elsewhere it would be of interest for you all to know that a recent survey in Australia (A small country who has nationals that really own big slices of media worldwide) turned up the fact that locally it appears that some 55 % of news in the popular press comes straight from PR Companies, with no redactions, etc. When the proportion is applied to Medical news(?), it is even higher… Want to re-think about the rubbish you see on television or hear on the radio?.

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  • 400

    Now comes a new report of waste:

  • Jim’s new story on the “phantom zip codes.” Channel 4’s Stuart Dyson had Jim on the newscast to discuss

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  • Well its obvious that this person has been hording funds.

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  • keep up the watch dog work- Crime never pays