State officials learned of the arrangement on the day the stimulus program began in March, after a customer asked a call center employee where he was located and then complained to the state.
"We were horrified," said Lisa Patt-McDaniel, director of the Ohio Department of Development.
Parago Inc., based in Lewisville, Texas, never told state officials that it would handle rebates from an offshore call center, she said. But state officials never asked, either.
Several Republican congressmen from Ohio, including House Minority Leader John Boehner and U.S. Rep. Steven LaTourette, said this week the stimulus-funded work should not have ended up in Central America.
Strickland, a Democrat, said Thursday the state will do a better job of vetting companies that get stimulus contracts.
"Going forward, I can assure you that whenever we let a contract, we're going to ask the question very definitely, and any company that's going to outsource jobs using these resources or other state resources will not receive a contact from us," he said.
President Barack Obama's stimulus package gave Ohio $11 million to provide rebates to consumers who buy energy-efficient appliances, including clothes washers, dishwashers and water heaters.
Parago received the highest score among nine companies that bid on the contract, and its $171,300 proposal was the second-cheapest, Patt-McDaniel said.
Two Ohio companies, Twenty First Century Communications and Focus on Ohio's Future, were the most expensive, at $467,238 and $493,763, respectively.
Upon learning of the El Salvador call center, Ohio officials immediately contacted Parago and asked the company to process the Ohio calls within the United States, she said.
But Parago, which has no domestic call centers, had already grabbed thousands of rebate applications, and disrupting the program would have jeopardized rebates to consumers, Patt-McDaniel said.
Parago has issued about 52,000 rebate checks as the program winds down. The rebates range from $100 to $250 depending on the appliance. As of Friday, just $3,200 remained available in the pool.
"For a government-run program, with all due respect, it's running very, very smoothly," said Bob Bloom of Bloom Brothers Supply, a retailer in Chesterland, about 20 miles east of Cleveland.
Bloom said he hired two more workers to handle the extra sales. They will keep their jobs after the program ends. In four months, Bloom sold 45 refrigerators, 91 dishwashers, 112 washers and 12 water heaters.
