Silicon Valley Companies Get Millions in Stimulus Funds

Investigation finds 17 big Bay Area companies banked nearly $100 million in government cash since 2009

View Comments ()
|
Email
|
Print

    NEWSLETTERS

    Investigative reporter Stephen Stock uncovers some surprising winners in the quest to land millions of your tax dollars. (Published Friday, May 11, 2012)

    The government has handed out more than $840 billion in federal stimulus money since 2009. More than $33 billion went to California. It is cash meant to save jobs, kick start the economy and keep small businesses and organizations afloat through tough economic times.

    But the NBC Bay Area Investigative Unit followed the money and found some surprising winners in the quest to land millions of your tax dollars.

    We dug through tens of thousands of grant and contract spending records and found some of the most profitable companies based in, or with major branches in the Bay Area, are also benefiting from this government handout.

    Seventeen of the largest and most recognized companies in Silicon Valley—nearly all of which are flush with cash—were awarded at least a total of $94 million in stimulus money as either prime recipients or sub-recipients.

    Take these companies, for instance:

    Google got $686,681 as a sub-recipient on a contract to reach 14 additional different language audiences for the 2010 Census Integrated Communications Campaign. 

    McAfee was awarded a total of $1,579,271 as a sub-recipient on five different contracts from 2009 through the first quarter of 2012.

    eBay was awarded a total of $4,447,938 on three different grants including a $2.5 million grant to the Office of the Governor of Arizona for the Government Services Fund.

    And Applied Materials banked $10,193,314 in four different grants including $3,993,891 for a project to develop and demonstrate an advanced epitaxial growth system for high-brightness LED manufacturers.

    We took our findings to the government watchdog group, Project on Government Oversight in Washington D.C., for some perspective. Scott Amey, General Counsel at POGO, is critical of some of the outcomes of the stimulus bill.

    “There are a lot of large contractors that received stimulus money, and it makes you scratch your head and wonder, ‘Were they really in need of receiving that money?’” Amey said. “A lot of people would say no.”

    He went on to say, “When it comes to competition in federal contract, you always have a fear that the usual suspects, that the larger contractors, are always going to get the bigger piece of the pie. And then you have the small and mid-sized businesses that are fighting for the scraps.”

    Yahoo! got $9,921,887 to build a clean-energy data center in upstate New York. Take a look at photos of the data center, below.

    According to federal data, the project created all of 25 jobs.

    We also found that out of the 17 big Bay Area companies that received this stimulus cash, more than half didn’t create any more than four jobs with the funds.

    Another big company that received stimulus money is PG&E. The utility received $47,387,955. Twenty-five million dollars of that total is going to fund a project to design and test an underground compressed energy storage system. The company provided an animation (below) of the technology.

    “We want to make sure that this actually works and we really want to make sure that our customers are going to benefit,” said Kevin Dasso, director of Smart Grid Technology Integration at PG&E.

    Without the big stimulus check, Dasso says it is unlikely that the utility or any other company would be able research energy technology this way.

    Investigative reporter Stephen Stock asked Dasso why PG&E couldn’t fund the project independently. 

    “Why doesn’t PG&E go out and do this testing on its own without $25 million in stimulus money?” Stock asked. 

    “That is the whole purpose of the stimulus money,” Dasso said, “to encourage innovation and testing new technologies.”

    He said PG&E is primarily focused on providing “safe, reliable and affordable service” to its customers and that the company is not in a position to use its own funds to test new technology.

    Sam Rosen-Amy, fiscal policy analyst for OMB Watch in the nation’s capital, said that the federal stimulus program, in his opinion, was mostly successful.

    “I’m no tech expert,” he said, “but these projects definitely fit the spirit and the intent of the Recovery Act.”

    But Rosen-Amy said there was a tension between getting the stimulus cash “out as fast as possible to people who need it most,” and ensuring the money is being spent in “an effective and responsible way.” And, he admits that some of the smaller companies that should have received money did not.

    That brings us to two local organizations who say the stimulus failed them. Their applications for stimulus dollars were denied back in 2009.

    Linda Crowe applied for stimulus funding, twice, so her organization Califa, which represents public libraries, could buy laptops and provide training for unemployed residents.

    “It was all connected toward job assistance and for helping people find work,” she said.

    “How much did you get?” Stock asked Crowe.

    “Nothing,” she said.

    Debarag Banerjee and his three business partners at WiViu Technology applied for $1.5 million to hire 13 people and build a video conference system to serve rural hospitals.

    “If we got stimulus, funding had come at the right time,” Banerjee said, “we would have been in a much, much different state.”

    Banerjee’s company has downsized significantly, and now it’s essentially out of business.

    Critics say those are two examples that show the American Recovery and Reinvestment Act failed to live up to some of its lofty goals of helping small businesses and creating jobs.

    Amey said Americans were hoping that the stimulus money would keep companies afloat and that the cash would “put them to work or keep them at work.”

    Both Linda Crowe and Debarag Banerjee say not getting stimulus cash cost both projects dearly. They claim that even now, the needs they sought to address with federal money have gone unmet.

    We contacted all of the other Silicon Valley companies mentioned in our report several times. None of them would talk on camera about their stimulus projects or why their corporations needed the money.