Hurricane Katrina is the most expensive natural disaster in U.S. history. In the weeks immediately following the storm, which hit the Gulf Coast on August 29, 2005, Congress appropriated nearly $62 billion to provide for critical response and recovery needs associated with Hurricane Katrina. On March 16, 2006, the House of Representatives voted for legislation containing an additional $19 billion for hurricane relief.

While the federal government must do its part to help the people of New Orleans and the Gulf Region get back on their feet, it is essential that steps be taken to ensure that the Bush Administration spends the hurricane relief funds wisely.

The Administration’s track record to date is not encouraging. On March 16, 2006, the Government Accountability Office (GAO) issued its initial assessment of how the federal government is managing 13 major contracts in support of Katrina response and recovery efforts. GAO is the non-partisan watchdog agency of Congress. Among its findings:

• GAO reported that inadequate planning led to the award of a contract for classrooms in Mississippi without competition. GAO indicated that, as a result, “information in the contract files suggests the negotiated prices were inflated;”
• GAO indicated that the Federal Emergency Management Agency (FEMA) spent $3 million for 4000 base camp beds that were never used;
• GAO found that on another contract, FEMA signed a $10 million contract to renovate and furnish 240 rooms in Alabama for use as temporary housing. Because FEMA headquarters awarded the contract without consulting local FEMA officials in Alabama, the rooms were not needed and only housed six occupants before being closed.
  

In order to ensure accountability for federal hurricane relief and reconstruction spending, Representative Waxman of California introduced the Hurricane Katrina Accountability and Clean Contracting Act [H.R. 3838] with Rep. Levin as a co-sponsor. The legislation would establish an anti-fraud commission to examine federal contracts relating to Hurricane Katrina recovery and would probe allegations of profiteering.