Stimulus money went to "office upgrades for politicians."
Crossroads GPS on Thursday, November 10th, 2011 in a TV ad
Crossroads Grassroots Policy Strategy claims $39 million of stimulus money paid for renovations of politicians' offices
Nothing suggests a boondoggle like tens of millions of federal dollars spent on office upgrades for politicians.
At least that’s the impression left by an advertisement that started running in Virginia this month.
The spot, which takes aim at Democratic U.S. Senate candidate Tim Kaine, comes from Crossroads Global Policy Studies, a Republican-aligned advocacy group.
The ad shows footage of Tim Kaine referring to stimulus funding passed under president Barack Obama.
"The stimulus is critically important to put people back to work," Kaine says.
Then, with no small hint of sarcasm, the ad says stimulus money went to "critically important projects" such as "office upgrades for politicians." The 35-second spot then lists $39 million as the price tag of that endeavor.
Nate Hodson, a spokesman for Crossroads GPS, told us in an e-mail that his group’s claim is a reference to the latest phase of a renovation of the Kansas state capitol building.
This is a familiar claim for PolitiFact, which debunked a similar charge that surfaced in the 2010 New Hampshire U.S. Senate race.
Since it’s popping up again, we decided to weigh in on it once more.
Hodson pointed to a July 7, 2010, story in The Bond Buyer, which notes the state took out a $39.7 million Build America Bond to help pay for the the latest phase of a decade-long renovation of the capitol. But that doesn’t mean, as the ad implies, that $39 million of federal stimulus money was spent directly on the project.
"That’s not the case at all," said Marilyn Jacobson, a spokeswoman for the Kansas Department of Administration, which oversees the capitol building.
The Build America Bonds were created as part of the 2009 stimulus -- the American Recovery and Reinvestment Act. A U.S. Treasury Department summary notes that the federal government pays 35 percent of the interest costs on the bonds, and the state or local government issuing the bond pays the rest of the interest.
The idea is to give states a lower interest rate and thereby boost infrastructure projects and the economy.
The state sells the bond to investors, and it’s the state -- not the federal government -- that pays back the principal on the bond, Jacobson said.
The costs for the federal government to finance its share of the interest over the life of the bond -- which matures in 2030 -- would be a fraction of the $39 million cited in the ad.
Jim MacMurray, vice president of finance at the Kansas Development Finance Authority, estimated the federal government’s total cost of paying for its share of interest would come to $8.8 million over the life of the 20-year bond.
There’s another problem with the Crossroads claim -- the contention that this is simply a project to "upgrade politicians’ offices."
It’s true that office space renovations have been part of the project. But Jacobson said that’s just one part of an overall restoration to completely overhaul the state capitol, which is more than 100 years old. Work includes replacing the leaky limestone exterior, installing new heating and air conditioning systems as well as getting rid of century-old electrical wiring, she said.
"Office space is a very small piece of the whole thing," Jacobson said.
The Crossroads ad says that $39 million in stimulus money went to "office upgrades for politicians," a reference to the latest phase in renovating the Kansas state capitol building.
First of all, the $39 million is not a direct payment for the renovation. That’s the amount the state will repay along with most of the interest through a bond program started by the 2009 stimulus.
The federal government pays for some interest costs, but those expenses are nowhere near $39 million.
Although it’s true that office upgrades are part of the project, new offices are just one part of a much bigger project to completely restore the building.
We rate the claim Mostly False.
Published: Saturday, November 19th, 2011 at 9:28 a.m.
Crossroads Grassroots Policy Strategies, "Crossroads GPS: ‘Applause’ VA," November 10, 2011.
Crossroads Grassroots Policy Strategies, "Crossroads GPS launches new TV ads on economy, spending in five Senate states," November 10, 2011.
E-mail from Nate Hodson, Crossroads GPS director of state and regional media relations, November 11, 2011.
Bond Buyer, "Kansas using BABs for statehouse project," July 7, 2010.
PolitiFact, "Ants in the stimulus? Office space for politicians? Ad attacks New Hampshire Senate candidate," September 29, 2010.
Interviews with Marilyn Jacobson, spokeswoman for the Kansas Department of Administration, November 15, 2011 and November 17, 2011.
Interview with Jim MacMurray, vice president of finance at the Kansas Development Finance Authority, November 18, 2011.
U.S. Department of Treasury, "Build America Bonds," accessed November 16, 2011.
U.S. Department of Treasury, "Treasury analysis of Build America Bonds issuance and savings," May 16, 2011.
Washington Monthly, "A Crossroads GPS pattern emerges," November 11, 2011.
Washington Post, "Another day, another false ad from Karl Rove’s Crossroads," November 11, 2011.
Kansas Historical Society, "Kansas State Capitol," accessed November 18, 2011.
Associated Press, "Independent GOP cheerleader group airs issue advocacy ad attacking Kaine’s 2012 Senate bid," November 10, 2011.
Associated Press, "Despite Renovations, Statehouse roof leaks," January 13, 2011.
Associated Press, "Cost of statehouse remodel grows," April 1, 2011.
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