I heard an interview on FOX-NEWS with a retired Louisiana official who said that the department/association responsible for maintaining the levees had used the money to buy a casino and to invest in each others' businesses rather than strengthen the levees. I'm sorry that I didn't note the name, but I hope this info comes out on the Internet somewhere.
Every levee in Louisiana is controlled by a "Levee Board". There are about two dozen "Levee Boards". They are a main source of political power - i.e. they are fiefdoms. And they are corrupt. Yes, some have bought casinos, some have bought aircraft, boats, etc.. You won't change it because it is enshrined in the Louisiana Constitution.
If I had my way, and if I were president, I would not give one damned dollar to Louisiana before I used emminent domain to take over all of the levees and give control of them to the Corps of Engineers.