U.S. hurricane aid fraud likely tops $1 bln: report
By Jeremy Pelofsky
Reuters
December 6, 2006
WASHINGTON - Fraud involving payments supposed to help victims of Hurricanes Katrina and Rita likely exceeds earlier estimates of $1 billion and only a tiny fraction of the money has been recovered, according to a U.S. government report released on Wednesday.
A February estimate that improper payments could be $1 billion "is likely understated," the Government Accountability Office, the investigative arm of Congress, said in the report to the Senate Homeland Security and Government Affairs Committee.
The Federal Emergency Management Agency (FEMA) has only been able to recover about $7 million in improper payments, which included money for temporary housing and aid to foreign students studying in the region, according to the report.
The GAO cited incidents in which FEMA gave $17 million in housing assistance to individuals who had already obtained free housing in the form of trailers or apartments and $20 million that went to people who improperly claimed for help for both storms that ravaged the U.S. Gulf Coast area.
"FEMA has yet to strike a proper balance between expedited assistance and good stewardship of taxpayer funds," said Sen. Susan Collins, chairwoman of the committee and a Maine Republican.
Katrina alone caused $80 billion in damage, killed 1,500 people and displaced hundreds of thousands more. More than $100 billion was set aside by Congress to help the region recover from the 2005 storms.
Collins said FEMA does have plans to recover another $8 million but criticized it as "pennies on the dollar" and said the effort was moving too slowly.
"The fact is that once the money is out the door, it is very difficult for FEMA to recover it," she said.
The GAO also said that 42 out of 145 laptops bought to help with FEMA operations during the hurricanes were presumed lost or stolen, and many Global Positioning System tracking devices were also lost or stolen.
"As with all reports that have offered insight in improving FEMA's disaster response and recovery efforts, the agency will consider and evaluate any new findings that can assist in improving our processes and procedures," FEMA spokesman Pat Philbin said in a statement.
He said that FEMA has taken corrective action, such as upgrading the system to prevent duplicate registrations for aid assistance.
A U.S. judge last month ordered the Bush administration to resume aid payments for housing after FEMA cut the assistance off citing an insufficient explanation. ACORN, a community organization that filed a challenge, said the payments would help 11,000 families in Texas and Louisiana.
