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<br />0363 <br /> <br />. <br /> <br />. <br /> <br />Preface <br /> <br />On February 2, 1983, Interior Secretary James Watt stepped <br />off an airplane in Las Vegas, Nevada, for a meeting with local <br />water officials. About 18 months before, the Office of the <br />Inspector General within Hatt's own department had completed an <br />internal audit of the records of the Southern Nevada Water <br />Project, a water supply system built with over $180 million in <br />Federal funds to convey water from the Colorado River to the <br />Las Vegas metropolitan area. The audit concluded that Nevada <br />water users had failed to pay $554,000 owed to the Treasury <br />since 1972. When this missed payment was compounded at the <br />modest interest rate of 3 1/4%, over $700,000 was delinquent as <br />of August, 1981, the time the IG's report was filed. <br /> <br />Now, after a year and a half of dickering with the <br />department's underlings, the Nevadans had the Secretary himself <br />right there in Las Vegas to hear them out. The up~twas that <br />they didn't want to pay, or at least they didn't want to pay <br />the entire' $739,000. Two weeks later, Secretary Ilatt wrote <br />that he was "compelled by the equities" to cut the amount due <br />the Treasury in half. With the stroke of his signature on a <br />memorandum, Watt relieved Las Vegas water users from repaying <br />$394,000 due the 7reasury. <br /> <br />Watt's generosity was not confined to such small amounts. <br />'I'wo days after his decision on Southern Nevada, \'iatt inked <br />another memo closing the book on the Department's response to <br />an earlier audit performed on the massive Pick-Sloan Missouri <br />Basin Program, a multi-billion dollar project. In 1978, the <br />Office of Audit and Investigation, the predecessor of the <br />Office of the Inspector General, had concluded that "the <br />financial posture of Pick-Sloan is, at best, based on an <br />uncertainity. At worst, it is based upon an unreality. The <br />net effect is that no one knows, within reasonable limits of <br />accuracy, what rates to charge power users and M&I [municipal <br />and industrial] water users to repay Pick-Sloan costs." <br /> <br />Although the department had taken no action in the <br />intervening 4 1/2 years to recover one additional dollar from <br />water and power users, Ilatt wrote, "I consider the issues of <br />the 1978 audit of the PSMBP [PiCk-Sloan] resolved insofar as <br />any further response or action at this time on the part of the <br />Bureau of Reclamation is concerned." At issue: a massive <br />giveaway of Federally supplied hydroelectric power, which will <br />eventually cost the Treasury more than $6 billion. <br /> <br />Between lS76 and 1981, the OAI and the IG developed seven <br />audit reports recommending specific action for the Interior <br />Department to improve the recovery of costs of Bureau of <br /> <br />1 <br />