NASHVILLE, Tenn. - People being paid with your tax dollars while they played cards and watched movies. It sounds outrageous, but that is exactly what happened at a Michigan battery plant. Now, the company is repaying money it received from the government. Lourin Sprenger reports it's now been 3 years since LG Chem announced plans for a new home in Holland, Michigan. Now doors are open, and employees report daily to work. Lithium ion batteries are still not being produced, raising concerns of wasted taxpayer dollars.

"I think that they rushed the market," says Bill Huizenga (R-Michigan). They should have invested first in research and development and not in millions of dollars in bricks and mortar."

A federal audit released last week shows LG Chem returned $842,000 in grant money. The Department of Energy documents, stating:

"Work performed under LC Chem Michigan had not been managed effectively" and the company had "not achieved objectives".

The audit says about $1.6 million went toward employees' paychecks who spent time playing cards and performing community service projects, a result of a sluggish takeoff of the Chevy Volt.

"What this plant will prove," said President Obama in July of 2010, "We are headed in the right direction. Surest way out of the storms we've been in is to keep moving forward and not go backwards."

Both Holland and LG Chem received national attention, prompting a Presidential visit when it was awarded a $150 million grant to build the facility in the Summer of 2010. Boasting 440 jobs, only 200 now in play, and economic growth along Michigan's lakeshore. Despite the slow, state leaders are preaching patients.

"The adoption curve on this doesn't happen overnight," says Governor Rick Snyder (R-Michigan). "There are stops and starts. So, we should be watching but we should be patient."

Time could be running out. The company has now furloughed employees despite it's original plan to produce batteries for over 60,000 cars by the end of 2013. The company declined an on-camera interview, but released a statement, saying "LG Chem Michigan has established internal safeguards to keep this from happening again" and "We are now taking every measure to be fully compliant in our use of grant funding". LG Chem, who has also invested $150 million into the project, promises to launch production at the Holland facility as soon as there is market demand. Their deadline for completion under grant guidelines is May of this year. The company has also been awarded $175 million in tax relief from the state of Michigan.

Tennessee lawmakers are reimbursed for their food and hotel expenses, but critics say that money is unnecessarily padding their pay at your expense. The Tennessee General Assembly is in session, poised any moment to do something it's never done before - reform the per diem system. Every time you buy something, a little over 9 cents of every dollar goes back into state coffers. Every year, a half million of that is doled out to your state legislators who live close to the Capitol  for food and hotels. It's a legislative perk known as "per diem".

"I want an answer as to why I have to buy your lunch when I have to work and pay for my own lunch?" says Christiana factory worker Martha Mendez.

Mendez is outspoken on the per diem issue.

"They need to be taking them a bologna sandwich from their own house," says Mendez.

Our WASTE WATCH research shows at $173 a day, Tennessee's is the 2nd highest per diem rate in the country - behind only Alaska, and tied with Georgia.

"It is a windfall for some legislators and it shouldn't be," says Tennessee Tax Revolt's Ben Cunningham.

Even legislators who live close to the Capitol and sleep in their own beds at night still get it.

"If you live close to the Capitol and you're taking that full per diem rate, you're obviously making money where you shouldn't be making money," says Cunningham.

Nashville resident Senator Thelma Harper (D-Nashville) took the per diem to the tune of $14,000 last year. She didn't want to talk about it, but Representative Bill Ketron (R-Murfreesboro) did.

"I agree, if I'm not staying in a motel then I shouldn't be paid for it," says Senator Ketron.

Ketron's per diem last year was $15,000. Ketron rightly points out costly civic commitments that come with the job.

"I give some of it back to charity," says Senator Ketron. "Going to the heart ball, the education ball, everything you're required to write checks for, you actually go in the hole."

Legislators automatically get that $173 if they're present for roll call. It's state law. They can't refuse it, but they can return it.

"I have, as you know, given back per diem, although I have not given back every bit of per diem that I've received," says Representative Mike Stewart (D-Nashville). "So, I don't think generally speaking that I need per diem if I'm right here in town, but I don't speak for anyone but myself."

We checked Representative Stewart's per diem spread sheet. He didn't return it in 2009 and 2011, but returned most of it in 2010. For 2012, his total was $11,000. The lawyer and Desert Storm veteran's per diem is still lower than many others who live locally. Still, others turn in for extra per diem on days they do office work, like Representative Sherry Jones (D-Nashville), whose per diem totaled $19,000 in 2012. One of the highest.

"If you start cutting per diem, the only thing you're doing is cutting out the ability of an average person to run for this office," says Representative Jones. "It is part of the salary. It's in the code. It is by law."

Representative Brenda Gilmore (D-Nashville) lives 10 miles from the Capitol and earned $17,000 in 2012 per diem. Senator Jack Johnson (R-Franklin) - $12,000. Senator Jim Summerville (R-Dickson) - $15,000. The list goes on. Keeping it is the norm.

"It's been a political football far too many times," says Cunningham.

Elections in fact have been won or lost on this issue. That's how pharmacist Senator Ferrell Haile (R-Gallatin) got elected.

"Two things I promised," says Senator Haile. "One was I would no longer accept any per diem for lodging. The 2nd was the first bill I would file would be addressing the per diem issue."

Senator Haile has introduced legislation that would cut out hotel expenses for legislators living within 50 miles of the Capitol, but our WASTE WATCH research found many states doing better and going further. Hawaii, for example, pays commuting legislators $150 a day. Non-commuters who live close to the Capitol get just $10 a day. Michigan has cut out abuse by capping per diem at the flat rate of $10,000 a year.

"There's so much technology available now for debit cards and automatic tracking of expenses apps on your phone," says Cunningham. "There are all kinds of ways to track your expenses, and when people are directly compensated for their direct expenses, that's fine. Nobody has a problem with that."

That's really all the Martha Mendez's of the state are asking for.

"What are you spending my money on?" asks Mendez. "It's my money!"

We should point out 5 states have no per diem for lawmakers, and Tennessee lawmakers make just $20,000 a year as part time legislators. There are many other states that pay less. If you'd like to see how much per diem your legislator gets, go to Fox17.com and click on FOX LINKS.

Now a bill working to get rid of the automatic money is moving through the House. It passed the State Government Committee. Republican Rick Womick (R-Murfreesboro) is sponsoring the plan to cut the $107 hotel reimbursement for lawmakers who live within 50 miles of the Capitol.

"It's the right thing to do and it's living up to the promise we made to our constituents that's smarter government, smaller government, and get rid of the fraud, waste and the abuse," says Representative Womick.

Opponents say that money can be used for other expenses and are worried it would close public office to people who aren't wealthy. You can find all our WASTE WATCH stories on Fox17.com. Just go to HOT TOPICS and click on WASTE WATCH. You can also submit your ideas for WASTE WATCH stories in that same section.
WASTE WATCH SPECIAL Part 2