Budget Cutters Eye Controversial Drug Agency

Source: themanoratjohnstown.com National Drug Intelligence Center is located in this Johnstown, PA. building

Newly-elected Republicans coming to Washington this week to slash the federal budget might want to take note of a tiny federal agency in the rusting steel town of Johnstown, Pa.

The facility is called the National Drug Intelligence Center, and it was a pet project of one of the most prolific spenders of federal money, the late Rep. Jack Murtha (D-Pa).

Conceived in the early 1990's as a clearinghouse for all of the intelligence in the nation's war on drugs, the agency was installed on the fifth floor of a defunct department store on Washington street in the heart of Johnstown's decaying downtown.

For years, Murtha lavished federal dollars on the little agency, even as it struggled to find a mission and critics blasted it as unnecessary. After all, its function duplicated those of the Drug Enforcement Administration and the FBI, both mature agencies with long track records of success.

Over the years, allegations of cronysm, shifting mission statements, travel expense abuses and low morale at the agency did not deter Murtha from continuing to seek finding for it. The NDIC's most recent annual budget was $44 million, which funded 239 much-needed jobs in the heart of beleagured Johnstown.

The NDIC evolved into something of a two-headed beast. It is funded through the Department of Defense as part of the National Foreign Intelligence Program, but it is not administered by the Pentagon. Instead, it is a component of the Department of Justice, a complicated arrangement that makes the agency less likely to succeed.

Getty Images The late Rep. Jack Murtha

The NDIC's nine bureaucratic lives prove just how hard it can be to kill federal spending, even when there's ample evidence the dollars can be put to better use someplace else.

The essential problem for budget cutters is that the cost to taxpayers is relatively small for pet projects like the NDIC, but the benefits are enormous to the small group that depends on them. Allied with a powerful insider like Murtha, the NDIC was able to fend off Bush administration efforts to kill it over the last decade.

But the death of Congressman Murtha early in 2010 has reignited the fight over the NDIC. And although Murtha's replacement in Congress supports the NDIC, he doesn't have the clout of the legendary old bull he replaced.

And now the conservative-leaning National Taxpayers Union and the liberal-leaning group U-S PIRG have issued a joint paper declaring that the center "has been the subject of numerous scandals and its performance has repeatedly been called into question." The conservative and liberal groups put the NDIC on a widely circulated list of spending cuts, which they argued politicians on both sides of the aisle could support. (Read the NTU-US PIRG report here.)

For its part, NDIC defends its record: "For nearly twenty years, our products and services have supported the U.S. government's fight against drugs and associated violence, and we look forward to continuing our efforts," the NDIC said in a statement to CNBC.

But even the former director of the NDIC, who was ousted after complaints of cronyism at the agency, said that the work being done in the tiny facility was less than perfect.

"I recognized that a lot of reports were God-awful, poorly written, poorly researched, and in some cases, wrong," former NDIC director Mike Horn told a reporter looking into waste at the agency in 2005.

Look for more "America: Stop Spending" reports from Eamon Javers and other CNBC reporters this week.