ACLU demands Department of Treasury not allow COVID relief funds to be used for jails

The American Civil Liberties Union of Iowa is urging the U.S. Treasury to investigate the misuse of federal American Rescue Plan Act funds by state and local governments.

ACLU’s National Prison Project and affiliates in several states, including ACLU of Iowa, told Deputy Inspector General Richard Delmar in a Jan. 18 letter that they’re concerned about plans across the country to use ARPA COVID-19 relief funds to build or expand jails and prisons, which the department prohibits.

The January 2022 final rule document said: “Treasury presumes that the following capital projects are generally ineligible: Construction of new correctional facilities as a response to an increase in rate of crime,” and continues: “Allowing these plans to continue would divert hundreds of millions of dollars from their intended purpose of rebuilding communities and local economies,” the letter said. “This improper use of recovery funds would exacerbate the crises that predated the pandemic and those that developed as a result of it.”

In February 2022, ACLU of Iowa Foundation sent the Scott County Board of Supervisors a letter stating that the supervisors’ proposed use of ARPA funds to build a new, expanded juvenile detention center violated the terms of the Department of Treasury, didn’t align with juvenile justice trends and would exacerbate racial inequities in the juvenile justice system.

The county hired Wold Architect & Engineers in 2019, before the pandemic, to assess the juvenile detention center the county had at the time. Wold recommended expanding that center or building a new, bigger one.

“Building a new, expanded juvenile detention center does not fall under any of the eligible uses of ARPA funds,” the letter said. “The only eligible use that could arguably apply would be under (a) ‘capital investments in public facilities to meet pandemic operational needs’; however, the Final Rule foreclosures the use of ARPA funds to build a new, expanded juvenile detention center.”

The board on Sept. 15, 2022, agreed to pay for the project from the county’s general capital improvement funds instead of using roughly $7 million in ARPA funds.

Acting Counsel to the Inspector General for the U.S. Treasury AJ Altemus said that “general government services” funds cannot be used for jails and that “capital expenditure restrictions apply to the use of the $10 million for lost revenue,” the Nation reported.

However, Altemus later said the “the information provided to the Nation mistakenly conflated the Capital Expenditure Public Health Negative Economic Impact expenditure category requirements with those of the Revenue Loss expenditure category,” Quad-City Times/Dispatch-Argus reported.

In the Jan. 18 letter, the ACLU asked the Department of the Treasury to give clear guidance on what’s prohibited under each category.

The ACLU said states and local jurisdictions’ use of recovery funds for jails and prisons in Iowa and other states has faced little or no scrutiny from the federal government, even though the federal government has investigated individuals’ misuse of COVID funds nationwide.

The ACLU asked the department to immediately open an investigation and tell all government recipients of ARPA funds that they can’t use them to build or expand detention facilities – and that there will be consequences for doing so.

“The investment in prisons instead of people detracts from – and misinterprets – the original mission of COVID relief funds to the detriment of the communities still in need,” the letter said. “The focus on investigating and acting against those who have misused COVID-19-related funding should include state and local government entities, and not be limited to individual bad actors.”