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Obama, Coburn to Introduce Hurricane Katrina Oversight Legislation

Wednesday, September 14, 2005

FOR IMMEDIATE RELEASE
Obama Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Coburn Contact: John Hart or Aaron Cooper, (202) 228-5357
Date: September 14, 2005

Obama, Coburn to Introduce Hurricane Katrina Oversight Legislation

WASHINGTON - U.S. Senators Barack Obama (D-IL) and Tom Coburn, M.D. (R-OK) today introduced the Oversight of Vital Emergency Recovery Spending Enhancement and Enforcement Act (OVERSEE), which is designed to ensure financial integrity in the Hurricane Katrina relief and recovery effort.

"Last week, Congress approved $62 billion for Gulf Coast relief and rebuilding efforts - most of which will go directly to FEMA," said Obama. "This is twelve times the amount of money FEMA was given last year - more than it has ever been trusted to spend before. If FEMA's track record during the rescue effort and in years before is any indication of how they will perform during the rebuilding that lies ahead, this should concern every taxpayer and every citizen interested in helping the millions of Americans who have been devastated by Hurricane Katrina."

Previous rebuilding efforts involving FEMA and other government agencies have a history of fraud, corruption, and waste when there is no oversight or accountability in how the funds are spent. Following Hurricane Frances in 2004, FEMA awarded $30 million and approved more than 12,000 claims for residents of Miami-Dade County. The storm, however, made landfall 100 miles north and Miami-Dade never even saw hurricane-force winds.

The Coburn-Obama bill would create a Chief Financial Officer (CFO) to oversee all expenditures associated with the Hurricane Katrina relief and reconstruction effort. The Hurricane Katrina CFO would be appointed by the President, confirmed by the Senate, staffed with experts from relevant federal agencies, and would have management and oversight over any agency using federal funds for the recovery. The CFO would issue monthly financial reports to Congress and the Government Accountability Office would issue quarterly reports to Congress reviewing the work of the CFO and recovery activities.

"As we look towards the massive Gulf Coast rebuilding efforts ahead, we must demand accountability over how the billions of dollars we've given to FEMA are spent," said Obama. "The CFO will also specifically look at whether federal funds are going to people most in need, whether federal funds are going to companies that hire local workers, and the extent to which the federal government is using no-bid and 'cost plus' contracts. As you'll recall, these contracts are what caused the whole contracting mess in Iraq."

"Even if the Levees hadn't burst and New Orleans didn't flood, Hurricane Katrina would still be the largest natural disaster this country has ever faced, and the rebuilding effort will be certainly be the largest and costliest of its kind. This entrusts FEMA with a massive amount of responsibility, and so it's only right that we protect both taxpayers and citizens on the Gulf Coast with strict accountability and oversight about how the money is being spent and whether it's being most efficiently directed to helping people rebuild their lives."

SUMMARY OF COBURN-OBAMA "OVERSEE ACT"

  • A Chief Financial Officer (CFO) would be established and would be responsible for the efficient and effective use of federal funds in all activities relating to the recovery from Hurricane Katrina.

  • Unlike an IG which audits money after it has been spent, the CFO would review expenditures before they are approved. This is a better way to protect against waste, fraud, and abuse.

  • The CFO would be appointed by the President, confirmed by the Senate, and located in the Executive Office of the President.

  • The CFO office would be staffed with experts detailed from relevant federal agencies, would have management and oversight of each federal agency involved in the recovery effort, and would work in conjunction with the inspectors general in each of these agencies.

  • Every month, the CFO would issue financial reports to Congress on the use of federal funds. These reports would include information about the extent to which federal funds have been distributed to persons most in need, the extent to which federal funds have been distributed to companies that hire local workers, and the use of sole source and "cost plus" contracts.

  • The Government Accountability Office (GAO) would issue quarterly reports reviewing the activities and expenses approved by the CFO. These reports would examine the accuracy of the CFO's reports and include information on the extent of waste, fraud, and abuse in federal spending, the use of sole source or "cost plus" contracts, whether federal funds have been used appropriately by state and local agencies, and the extent to which federal funds have helped persons most in need and local workers.

  • The CFO position would terminate one year after the enactment of the bill but could be extended for an additional year by the President.