The Associated Press reports that the New York Police Department's controversial program to monitor Muslim neighborhoods and organizations was funded, at least in part, by White House grants meant to pay for the drug war. The money was given to the NYPD through the High Intensity Drug Trafficking Area program, which was established years ago to fight gangs and drug trafficking. After September 11, 2001, however, local authorities were permitted to redirect some of that money to fight terrorism. The HIDTA has given out around $2.3 billion over the last 10 years, with about $135 million given to officials in the New York/New Jersey metro area.
The latest report from the AP (who originally broke the story of the Muslim surveillance effort) seems to be an attempt to tie the spying program directly to the Obama administration. However, it appears to be more a story about mismanagement of funds and poor oversight than about the White House explicitly paying for a controversial program. Money for the HIDTA is approved by Congress, but groups that receive it are not required to detail how they spend it. In the NYPD's case the money was mostly used to pay for undercover cop cars and computers that were used to store collected data. There's no evidence that any one in the federal government — which include the previous Bush administration — directed the grants to the surveillance or even knew what the money was being spent on it. The question isn't "why was the White House spying on Americans?", but rather "why don't they pay attention to where their money goes?"
However, the news may force the White House to finally take a position on the program, one way or another. Officials have mostly refused to answer questions about the NYPD's actions and have not stepped up to condemn it. If federal money is being spent on it, though, that will almost certainly lead to a Congressional investigation and an unwanted election-year embarrassment. That would make remaining neutral no longer an option.