The U.S. Department of the Interior’s Bureau of Reclamation (formerly the U.S. Reclamation Service) has been in charge of water management (including many dam projects) since 1902. Critics have used the term “wrecklamation” since at least 1912 and 1925.
 
The Bureau of Reclamation nickname of “Bureau of Wrecklamation” was used by Sierra Club members in 1973 and the environmentalist author Edward Abbey (1927-1989) in his book The Monkey Wrench Gang (1975).
 
   
Wikipedia: United States Bureau of Reclamation
The Bureau of Reclamation (formerly the United States Reclamation Service) is an agency under the U.S. Department of the Interior and oversees water resource management, specifically as it applies to the oversight and/or operation of numerous water diversion, delivery, and storage and hydroelectric power generation projects it built throughout the western United States.
 
In July 1902, in accordance with the Reclamation Act, Secretary of the Interior Ethan Allen Hitchcock established the U.S. Reclamation Service within the U.S. Geologic Survey (USGS). The new Reclamation Service studied potential water development projects in each western state with federal lands—revenue from sale of federal lands was the initial source of the program’s funding. Because Texas had no federal lands, it did not become a Reclamation state until 1906, when Congress passed a special Act including it in the provisions of the Reclamation Act.
 
Wikipedia: Edward Abbey
Edward Paul Abbey (January 29, 1927 – March 14, 1989) was an American author and essayist noted for his advocacy of environmental issues, criticism of public land policies, and anarchist political views. His best-known works include the novel The Monkey Wrench Gang, which has been cited as an inspiration by radical environmental groups, and the non-fiction work Desert Solitaire. Writer Larry McMurtry referred to Abbey as the “Thoreau of the American West”.
   
Google Books
Private Irrigation Enterprise Compared with Government Reclamation
By Francis G. Tracy
Washington, DC: U.S. Government Printing Office
1912
Pg. 17:
So much for the estimates of the Reclamation Service.
(...)
This is a big business with a vengeance. Conservation—Wrecklamation, beginning with a W.

Google Books
Forbes
Volume 16
1925
Pg. 598:
Government reclamation projects are spelled by Westerners “wrecklamation” projects. It is declared that almost every Federal reclamation scheme has turned out indifferently or worse.
 
Exact Editions
July 1973, The Ecologist, “Half a lake is better than one” by Tom Turner, pg. 273, col. 1:
The battle over Echo Park was the first, and it produced a compromise between the conservationists, led by the Sierra Club, and the Bureau of Reclamation, the government’s main river-stopper (referred to by Club members as the Bureau of Wrecklamation).
 
Google Books
The Monkey Wrench Gang
By Edward Abbey
Philadelphia, PA: Lippincott
1975
Pg. 190:
...U.S. Bureau of Wrecklamation officials with heads like turnips and eyes like pellet of rat poison, clutching snap-brims through the backwash of the props;...
 
14 June 1977, Raleigh Register (Beckley,WV), “June, Month of Disasters,” pg. 12, col. 1:
Investigators blamed the disaster on faulty dam design and haphazard Bureau of Reclamation procedures that allowed the design flaws to go undetected. The residents of Rexburg, one of the towns devastated by the flood, paid sardonic tribute to the bureau by displaying a sign which read: “Welcome to Wrecksburg. Designed and landscaped by Department of Interior and Bureau of Wracklamation.”
 
Google Books
How to Create a Water Crisis
By Frank Welsh
Boulder, CO: Johnson Books
1985
Pg. 71:
...... politicians and other vested interests — for building it and other monstrously wasteful projects, the Bureau of Reclamation, called by some the Bureau of Wrecklamation.
 
Google Books
A River No More:
The Colorado River and the West
By Philip L. Fradkin
Berkeley,CA: University of California Press
1996
Pg. XX:
What with dam safety problems; declining budgets, projects, and personnel; and the visitor center fiasco, the agency — once known as the Bureau of Wrecklamation to its critics and regarded as the savior of the West by its supporters—was now a shadow of its former self.
 
Google Books
Cecil Andrus:
Confessions of a western politician
By Cecil D. Andrus with Joel Connelly
Seattle. WA: Sasquatch Books
1998
Pg. 48:
...destructiveness had inspired author Edward Abbey’s nickname for the agency, the “U.S. Bureau of Wrecklamation.”