Article Last Updated: Sunday, April 18, 2004 - 6:16:38 AM PST

By John Driscoll The Times-Standard

EUREKA -- The U.S. General Accounting Office is launching an inquiry into a water account created for the Klamath River in 2002 by buying millions of dollars of water from farmers to send downstream for salmon.

The U.S. Bureau of Reclamation water bank project reportedly bought $4 million of water in 2003 -- and has more than $4 million available to buy even more water this year -- from farmers along the central California-Oregon border. The billions of gallons of water is intended to improve conditions for threatened salmon in the lower Klamath River.

Reps. Mike Thompson, D-St. Helena, and Henry Waxman, D-Los Angeles, the ranking minority member on the Committee on Government Reform, asked the GAO to find out how much money was actually spent, whether it reduced demand for water and whether it was used for other purposes than to send water to salmon.

"We spent money on this and was it well spent?" asked Thompson on a recent trip to Eureka.

Last spring, as Reclamation was amassing the water bank, heavy rains forced officials to spill water from lowermost Iron Gate Dam. Reclamation weighed whether to count the spilled water against the water bank, infuriating lower river communities. In June, Reclamation put out a press release saying the 50,000 acre feet in the water bank would bolster flows to the river.

Four weeks later, it was gone. Reclamation changed the water year type for the watershed, cutting back flows due to hot and dry weather.

Staff have just been assigned to the inquiry and discussions will soon determine what the scope on the investigation will be, said the GAO's Bob Robinson.

"It's imminent to get started, but we're not under way right now," Robinson said.

This year, the bureau is seeking to buy 75,000 acre feet from farmers. Next year, it will try to buy 100,000 acre feet. The program is ordered by the fisheries element of the National Oceanic and Atmospheric Administration, which in 2002 found Reclamation's 10-year plan for the project would jeopardize protected fish.

Ernie Niemi, an economist in the Eugene, Ore., office of the firm EcoNorthwest, was sharply critical of the water account program, saying it doesn't transfer water from the low-value users to the high-value users.

"This is more like a bureaucracy that doesn't have the skill or innovation to manage the resource," Niemi said. "It's another Stalinesque approach to managing resources in the basin."

The federal irrigation project serves about 220,000 acres of land in the Upper Klamath Basin. In 2002 and 2003, Reclamation sought water only from the farmers in the project.

A call to Dan Keppen of the Klamath Water Users Association was not returned by deadline.

Bill Jaeger in the Department of Agricultural and Resource Economics at Oregon State University said the water bank concept has a lot of potential, and could be implemented better.

Jaeger said any time something new is tried, there will be problems.

"You're going to have lots of bumps in the road," he said.

He said a key change would be to include water users outside the project, an option that would make for better efficiency and cost savings. Reclamation is looking outside the project this year.

The GAO's Robinson said he didn't have a time frame to finish the investigation.