State leaders said Tuesday that they have ordered reviews of an environmental program that critics say allows double dipping from funds to replace wetlands and streams damaged by development.

Gov. Bev Perdue has told her panel assigned to reform the state budget to dig into the state Ecosystem Enhancement Program, while Senate leader Marc Basnight sent the work to the legislature's Program Evaluation Division. Both Democrats said through spokespeople that they are concerned about how the program is operating.

On Tuesday, The News & Observer reported that the ecosystem program paid a Maryland company, EBX, $911,000 this year for a pollution reduction project that it had already completed as part of $11 million in contracts with the state Department of Transportation in 2000 and 2002.

Officials with the Department of Environment and Natural Resources have characterized the payment as the result of a regulatory loophole that they now want to close. But they also acknowledge that they support double payments in some cases when a restoration project enhances streams and the land alongside them. These projects are built by the state and by private companies.

EBX officials say the company should be entitled to the $911,000 because the state has supported double payments on the other restoration projects. The restored EBX sites are in Johnston and Wayne counties.

Chrissy Pearson, Perdue's communications director, said that the governor has been aware of the double-dipping concerns and told her Budget Reform and Accountability Commission to tackle the issue earlier this year.

"She told me quite bluntly that this process doesn't make sense to her and she does want some answers as to whether the groups involved in this type of work are working as efficiently and effectively as possible," Pearson said.

Rep. Pricey Harrison, a Greensboro Democrat and one of the legislature's most outspoken environmental advocates, said she was outraged by The N&O report.

"It seems like this double dipping is really ripping off the taxpayers and not providing the environmental protection that we are seeking," Harrison said. "What shocks me the most is that [state officials think] there needs to be a law to clarify that double-dipping is a bad thing. That would seem clear on the face of it."

She said that if the environmental agency or the state's rulemaking commission do not end the double-dipping, she will introduce legislation next session to stop it.

"This is a lot of money at a time when we don't have spare change for these kinds of projects," Harrison said.
dan.kane@newsobserver.com or 919-829-4861