While one federal agency was last week dishing out money in a bid to mitigate the impact of the drought out west, another was looking like it made the situation worse there, in part of the region, over the past few years.

The Office of Special Counsel said Friday that it will tell The Department of the Interior to look into how its Bureau of Reclamation spent millions of dollars on a conservation project in Northern California and Southern Oregon. The payments, which started in 2008, allegedly resulted in giveaways to irrigators, the depletion of groundwater, and excessive compensation packages for those overseeing what has been characterized as a mess.

Public Employees for Environmental Responsibility–a non-profit watchdog that in February filed a complaint about the matter with OSC–said it involves “at least $48 million dollars in contracts.”

At the heart of the accusations is an agreement between BOR and an inter-governmental development agency over the Klamath Project: a major regional water works impacting land that stretches for 5,700 square miles. The venture was between the bureau and a municipal utility consortium called the Klamath Water and Power Agency (KWAPA).

PEER’s initial February complaint, submitted on behalf of two whistleblowers, decried the alleged impact of the project on a watershed “larger than Connecticut.”

“While the Bureau is supposed to work with Klamath Project irrigators, the relationship has gotten much too close, according to biologists,” PEER wrote earlier this year.

OSC said Friday, in response to PEER, that there was “a substantial likelihood” that the whistleblowers’ disclosures evidences wrongdoing– “a violation of a law, rule, or regulation; gross mismanagement; and a gross waste of funds.”

Per its statutory obligations, OSC said it called on Secretary of the Interior Sally Jewell to report on the matter in 60 days.

PEER’s allegations, OSC noted, described the relationship between BOR and KWAPA as failing to “serve a public purpose” in the most basic of ways.

“You further alleged that the Klamath Water and Power Agency has never undertaken the goal of benefiting fish and wildlife, as stated in the agreement,” OSC attorney Siobhan Bradley noted.

After submitting its February complaint, PEER had claimed that resources for fish and wildlife conservation were diverted by KWAPA to cover “water supply contracts benefiting a small group of irrigators.” The group also noted that KWAPA members were receiving “salaries, fringe benefits, office space, equipment and travel” at the taxpayers’ expense.

PEER also said then that BOR money was going toward “counterproductive, unsustainable, and short-term fixes to Klamath Basin water woes, such as pumping large amounts of groundwater until private wells go dry.”

“This has required well owners to dig new and deeper wells into ever shrinking groundwater supplies,” the environmental group said.

On Tuesday, PEER senior counsel Paula Dinerstein described the Klamath project as “a slush fund for favored irrigators.”

“It appears no one asked what the legal justification was for paying public funds to benefit a private association,” she added.

Last week, the Department of Agriculture announced it would be giving $150 million to farmers in California suffering their fourth consecutive year of little rainfall. All but $20 million of the money was appropriated to conserve water.

In its press release Tuesday, PEER noted that the “200,000 acres of cropland” covered by the Klamath Project has, over the past few years, “been crippled by a series of droughts.”