By Katie Curley Katzman
NEWBURYPORT — Dirt Glue Enterprises in Amesbury got a $315,000 loan from the American Recovery and Reinvestment Act, according to a government Web site that's meant to let taxpayers know how billions of their tax dollars are being spent.
But this is news to Bob Roche, owner of the business on Middle Road. He said he didn't know he was on a list of people getting stimulus loans.
And, he says he hasn't gotten a penny.
"They are dreaming," Roche said. "Sounds like they are playing the same game where they were reporting all these fake jobs."
Roche isn't alone. The Daily News called six local businesses that the government claims got loans. Three returned the calls: Two said they hadn't received loans, and one said it had.
The ARRA passed Congress in February just weeks after President Barack Obama was sworn into office and was billed as a way to boost the economy and build up jobs. Congress assured citizens all funds could be tracked on a Web site called recovery.gov.
But the site, launched two weeks ago, has been riddled with inaccuracies and outdated information, such as claiming job growth in non-existent congressional districts and saving jobs that never existed. It's caused a national uproar and led to a federal probe of the Web site's data.
Some of the data is grossly misleading. For instance, the Web site claims $4.9 million has been spent in Newburyport to create just 1.77 jobs. While officials say the money has in fact been allocated for expenses such as multi-million dollar expansion of the Newburyport Park and Ride, sidewalks in the Newburyport Housing Authority and an infusion of money for Newburyport schools, they acknowledge the job data is wrong — in fact, the government is still trying to figure out how to report it.
"The federal government is learning from the first round of reporting and will determine the most accurate way to count the jobs created across the country as the process moves along," said Jeffrey Simon, director of Infrastructure Investment for the state recovery. "Meanwhile, ask one of those work study students or construction workers whether the recovery act means something to them. We are sure it does."
'Unresponsive'
According to recovery.gov, Roche will receive a $315,000 Patriot Express loan for small businesses owned by veterans. While Dirt Glue is a veteran-owned business, Roche said he hadn't seen any money.
Roche, along with businesses such as The Inn at Newburyport, Micro Optical Solutions LLC in Newburyport, Eastman's Fish Market in Seabrook and Union Machine Company of Lynn in Groveland are among the local small businesses the Web site says have been allocated small business loans.
Roche didn't know his name was on the list of ARRA recipients until he was contacted by a Daily News reporter.
He said he had spoken to Congressman John Tierney, D-Salem, regarding small business loans offered through the American Recovery and Reinvestment Act but hadn't received any notice he was a recipient.
"I've been beating pretty hard there ,but Tierney's office has been unresponsive," Roche said.
Another small business owner who asked to remain unidentified said the fact his business is on the Web site and listed at the wrong address troubles him.
"You have to wonder what is going on," he said. "Whether this is a scam or not, I don't know where they are getting their information."
He said he has not taken out a loan nor received a grant. Nor has he recently taken out any loans at all.
According to Simon's office, a lot of businesses were given loans from banks made possible with ARRA money. Without the additional funds from the ARRA, it isn't clear that the banks would have been able to grant the loans.
Simon's office said some businesses probably don't know that recovery dollars were used for the loans because the banks had no reason to share that info.
When asked about the Newburyport businesses that hadn't taken out loans, Simon's office directed questions to the federal government, noting they are the ones who provided the information to the states.
Federal Communications Director of the ARRA Ed Pound said he didn't have an immediate explanation for the discrepancy.
SmartSnax owner Gail Sears said she received a loan from the Newburyport-based Institution for Savings funded by stimulus funds.
"It was a small business loan to get me up and running," Sears said of her new company, which is a healthy and organic vending machine business. Her machines are currently being used in the Triton School District. She took out the loan in June. "The advantage for me is from what I understand, SBA loans typically have fees associated, but my loan had no fees at all."
Sears, who operates the business with the help of her husband Kenneth on Harrison Street in Newburyport, said she will most likely go back for another loan as business continues to grow.
Jobs created or saved?
The $787 billion stimulus package has been spread over the nation to local governments, schools, non-profits and small businesses in efforts to save and create jobs.
According to Simon, new jobs could be coming down the line, despite what the Web site reporting shows.
"Job creation is a goal of recovery funding. The goal is to put people back to work quickly by investing in infrastructure projects that will create jobs in the short-term, while also targeting our investments to promote long-term economic growth," Simon said.
"As of the reporting period, a number of projects, including the Newburyport Park & Ride, have not had any ARRA spending, and so no jobs have been created yet. These projects will create jobs as work and spending get underway. It's important to note that even if a project is underway, no funds are 'spent' until a vendor has been paid from the state's checkbook."
Simon, who was appointed to the $150,000-per-year "stimulus czar" post by Gov. Deval Patrick, said jobs saved are just as important as jobs created, which he said can be seen in the money coming to the local school systems.
"The over $350,000 in recovery dollars that have been awarded to the Newburyport School District has helped to keep teachers in schools educating students — the importance of those retained jobs should not be overlooked," he said.
Last week Tierney, a member of the Oversight and Government Reform Committee, attended a hearing titled "Tracking the Money: How Recovery Act Recipients Account for their Use of Stimulus Dollars."
While an exact figure on how many jobs have been created or saved thus far may be unclear, Tierney pointed to recent statistics to show the success of the program while saying more help is needed for those out of work.
According to Tierney's office, before the ARRA was created, employment was declining at an average monthly pace of 553,000 jobs in the fourth quarter of 2008, and by 691,000 jobs in the first quarter of 2009. But in the last three months, job decline averaged 188,000 jobs.
"Certainly, federal funds to Massachusetts resulted in thousands of jobs being saved (teachers, public safety officials and public health workers, among others) and many being created through transportation, water projects, energy and other infrastructure investments," Tierney said in a statement. "I believe we have to do more, and I have been working with the Democratic policy group and economists from across the spectrum of thought about best policies that could be adopted and which could enhance job prospects."
But the ARRA funding has recently come under fire by claiming it created 640,329 jobs. Those numbers have been deemed exaggerated, and in some cases outright false, due to errors in reporting by recipients.
In order to track the spending, the Obama Administration provided a formula for the recipients of stimulus money on how to keep track of jobs created. But as recently as this past week, that formula is being criticized for being confusing and aiding misrepresentation of data.
Another problem affecting data is the creation of false congressional districts throughout the United States.
Recovery.gov reported that in Arizona's 15th districts 30 jobs were created or saved with $761,420 stimulus money. The 15th district doesn't exist ¬— there are only eight congressional districts in the state.
The same was found in Oklahoma, Connecticut, Iowa, Montana and even the U.S. Virgin Islands and Puerto Rico where data was reported from nonexistent districts.
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Stimulus-funded grants
The following figures are from the federal Web site, recovery.gov, and are meant to show taxpayers how federal stimulus money has been spent. "Jobs reported" indicates the number of jobs that have been saved or created; officials say the reported information is inaccurate and/or misleading.
NEWBURYPORT
$738, 553 — Newburyport public schools, 0 jobs reported
$500,000 — Jeanne Geiger Crisis Center, 1.30 jobs reported
$3,587,089 — Park and Ride Expansion, 0.22 jobs reported
$32,936 — River Valley Charter School, 0 jobs reported
$70,705 — Newburyport Housing Authority, 0.25 jobs reported
AMESBURY
$1,242, 916 — Amesbury public schools, 0 jobs reported
NEWBURY/SALISBURY/ROWLEY
$1,504,566 — Triton Regional School District, 0 jobs reported
$42,500 — Boys and Girls Club of the Lower Merrimack Valley, Salisbury, 0 jobs reported
GROVELAND/MERRIMAC/WEST NEWBURY
$1,824,413 — Pentucket Regional School District, 0 jobs reported
$94,823 — Groveland Housing Authority, 22 jobs reported
SEABROOK
$2,500,000 — Drinking water revolving fund, 0 jobs reported
GEORGETOWN
$664,319 — Georgetown School District, 0 jobs reported
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Stimulus Funded Loans For Small Businesses
NEWBURYPORT
Micro-Optical Solutions LLC, $75,000
Smartsnax LLC, $90,000
The Inn at Newburyport, $236,000
AMESBURY
Dirt Glue, $315,000
GROVELAND
Union Machine Co. of Lynn, $553,000
SEABROOK
Will-Mor Engineering, $524,000
Pavan, INC, $833,000
Harborview Entertainment LLC, $568,000
Eastman's Fish Market LLC, $22,500
