A report that the US-Ireland Alliance, which is funded by the U.S. and Irish governments and by private donations, spent at least $1.2 million in entertainment expenses over the past five years has caused shockwaves in both Ireland and the U.S.

The US-Ireland Alliance, came under scrutiny for its lavish spending from Ireland’s Sunday Tribune last weekend. In recent weeks the organization also hit the headlines after securing a controversial $26.7 million investment from the Irish government for a scholarship fund named after former Senator George Mitchell for visiting American students.

Trina Vargo, head of the US-Ireland Alliance, confirmed to the Sunday Tribune that the organization has spent about $200,000 every year on a pre-Oscar party in Los Angeles. Vargo, a former foreign policy adviser to Senator Edward Kennedy, earns $175,000 a year as the organization’s head.

Vargo also disclosed that $250,000 had been spent on a suite at the exclusive five-star K Club in Co. Kildare for the Ryder Cup in 2006. The estimated cost of corporate entertainment organized by the alliance for all the events was $1,271,000.

The extravagant spending and the rising concern about what exactly the Irish and U.S. governments are receiving in return for their investment has some critics expressing doubts about the alliance’s aims and objectives.

In recent weeks an increasing number of Irish politicians have been raising concerns about the viability the organizations marquee project, the 0 million George Mitchell Scholarship Fund, in honor of the Irish peace broker, in light of steep educational cutbacks and the ongoing recession in Ireland.

Socialist Member of the European Parliament for Dublin Joe Higgins told the Irish Voice on Tuesday, “It’s important to note that the Irish government is producing matching funding of  $26.7 million over five years. But this program sounds elitist and massively excessive when you consider it’s actually just for 12 American students.

“When we did our own analysis of the rough costs we certainly couldn’t account for 4 million Euro a year it’s costing for such a program. That’s a major issue that needs to be addressed if Irish taxpayer funds are used.”

Higgins added that no answers were forthcoming from the US-Ireland Alliance as to how the money would be disbursed, and how 12 students a year could cost $5.3 million.

“You just cannot assess the impact this program will have,” said Higgins. “The whole idea that you’re spending $26.7 million on the off chance that one of these students may become the CEO of a multinational corporation and discriminate in favor of coming to Ireland in the future, to say the least it’s tenuous.”

But Higgins didn’t just doubt the future impact the Mitchell Scholarship Fund would have on Ireland. He also believes it was poorly conceived.

“I doubt the whole concept of this program,” said Higgins. “I’m very much in favor of students coming and going to Ireland to study, but not in an elitist private capacity.”

Higgins added that the current recession in Ireland and the cuts in educational spending make the Irish government’s investment in the Mitchell Scholarships questionable.

“There is a major crisis here of cuts in public services. We have massive problems about how the government is bailing out banks and cutting the wages of working people,” he said.

“If there’s $26.7  million going there’s plenty of needs in our own education system where it would be better deployed.”

Seamus Boyle, the national president of the AOH in the U.S., told the Irish Voice that he did not believe Congress should participate in funding the scholarships.

“Congress should not support Trina Vargo, the head of the US-Ireland Alliance, in her efforts because she, as far as I can see, does not support the Irish immigrant in this country,” said Boyle, referring to a controversial opinion piece Vargo penned for The Irish Times in 2008 in which she likened legalizing the Irish undocumented in the U.S. to putting “lipstick on a pig.”

“She hand picks the Irish things she wants to get involved with, and anything she does support is for the rich and famous it seems,” Boyle added.

Boyle said that many Irish organizations sponsor educational visits to Ireland, citing the AOH program the Irish Way, which sponsors American students in Irish colleges.

“After they study in Ireland they all make written reports. They don’t cost anywhere near the kind of money that the US-Ireland Alliance is talking about,” he said.

“No one has a say about who these hand picked people are, what they do or what happens to them. So I don’t think they should have any matching funds from our government.”

In defense of her organization Vargo countered that the expenditure of almost $200,000 annually for the pre-Oscar party in Los Angeles was a good investment for Ireland.

“On average $200,000 is spent on this event,” she told the Sunday Tribune. “A portion of the funding comes from Culture Ireland, the Film Board and I raise additional funding from private sources.

“Again, compared to comparable events, this is a low price. The head of the National Endowment for the Arts told me he couldn't believe that we do it for only that cost.”

Vargo added, “You must also recognize the value and profile it brings to people in the industry. Two Irish singers got recording contracts because of our event.”

Mayo TD (member of Irish Parliament) Michael Ring went on Ireland’s top-rated radio show hosted by Pat Kenny last week to express his opposition to the funding.

"That $26.7 million would build four schools in Mayo," he said. “Somebody's priorities are very wrong to be giving away $26.7 million of Irish money when we can't afford it."

Singer Laura Izibor performs during the 4th annual "Oscar Wilde: Honoring The Irish In Film" awards held at The Ebell Club of Los Angeles on February 19, 2009