Posted on 02/13/2006 8:14:58 AM PST by Cagey
WASHINGTON (AP) - In its rush to provide Katrina disaster aid, the Federal Emergency Management Agency wasted millions of dollars and overpaid for hotel rooms, including $438-a-day lodging in New York City, government investigators said Monday.
Two reports released by the Government Accountability Office and the Homeland Security Department's office of inspector general detail a series of accounting flaws, fraud or mismanagement in their initial review of how $85 billion in federal aid is being spent.
The two audits found that up to 900,000 of the 2.5 million applicants who received aid under FEMA's emergency cash assistance program - which included the $2,000 debit cards given to evacuees - were based on duplicate or invalid Social Security numbers, or false addresses and names.
Separately, the Justice Department said Monday that federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes. Forty people have pleaded guilty so far, the latest report by the Hurricane Katrina Fraud Task Force said. Many defendants were accused of trying to obtain emergency aid, typically a $2,000 debit card, issued to hurricane victims by FEMA and the American Red Cross.
Thousands of additional dollars appear to have been squandered on hotel rooms for evacuees that were paid at retail rather than the contractor's lower estimated cost. They included $438 rooms in New York City and beachfront condominiums in Panama City, Fla., at $375 a night, according to the audits.
The two audits were released by the Senate Homeland Security Committee as the panel wrapped up its investigation into the federal government's preparation and response to the disaster.
"FEMA has a substantial challenge in balancing the need to get the money out quickly to those who are actually in need and sustaining public confidence in disaster programs by taking all possible steps to minimize fraud and abuse," the GAO audit by Gregory Kutz states.
FEMA spokeswoman Nicol Andrews said Monday the audits were still preliminary. The agency is working closely with auditors to make sure money is wisely spent and is committed to helping disaster victims, she said.
Offering the $2,000 emergency aid "was a calculated risk taken in a catastrophic situation where many people were forced from their homes, often without any identification or basic necessities," she said. "It was the right thing to do."
On the plus side, an initial review by Homeland Security inspector general Richard Skinner found that FEMA's decision to sign a contract with Carnival Cruise Lines for Hurricane Katrina housing shortly after the Aug. 29 storm "was reasonable under the urgent circumstances."
The six-month, $236 million deal with Carnival for three full-service cruise ships - which initially sat half empty for several weeks on the Gulf Coast - had been criticized by lawmakers of both parties as a prime example of wasted spending in Hurricane Katrina-related contracts.
However, Skinner said the decision to use cruise ships appeared to be a wise economical choice "in a high-cost area such as New Orleans so long as occupancy remains high." A review of the contract's specific terms was continuing.
"While we have found many instances where contractors performed their work efficiently and in good faith, we have also found instances where there were problems," Skinner said. "In some cases, the government will have little legal recourse to recoup payments to contractors for payments under questionable contracts."
In the Justice Department probe, the largest investigation centered on a Red Cross call center in Bakersfield, Calif., in which some employees schemed to steal the emergency money for themselves and others, prosecutors said. Fifty-three people have been charged in this probe.
The prosecutions and a public education campaign appear to have persuaded some people to return money to which they may not have been entitled, the Justice Department report said. FEMA and the Red Cross reported receiving more than $8 million in returned funds, along with letters confessing to fraud or seeking to arrange installment plans to pay back the money, the report said.
Five dozen Web sites that either asked for money or sought to harvest personal information for identity theft also have been shut down, the report said.
Really ?!? No kidding ? And here I thought *every* cent was spent to improve the pooor lot of the poor, opressed welfare recipients...
I guess all the Dead Roof Inns between New Orleans and New York were full. No big deal, it's only money.
As if anyone needed an audit to know this was going to happen.
No big deal, it's only money.
Well, at least, it stimulated the economy.
I guess Congressman Sensenbrenner (R-WI) was right to oppose the appropriations bill without accountability built into it.
WOW - A fraud rate of almost 40%...
I am starting to lose my faith in BIG GOVERNMENT...
And who thought it would be any different? Many people have gotten rich with aid money. Nothing new here, just gov in action.
HEADLINE: "Speandthrift FEMA throws money away failing to help stranded homeowners...FEMA hates blacks."
They should have issued guidelines on how this money was spent - hotel rooms would only be covered up to so much per night and certain brands (ie: Red Roof INns - Holiday Inns - NO HYATTs or PLAZA hotels!). They should have treated the money like they do unemployment - you have to show you were out looking before they cut you a check~
Riiiight - who leaves home without their wallet ? Oh that's right - they had no warning the hurricane was coming. Wait, you said they had a few days warning ?
Never mind.
These people are just parasites, plain and simple.
I'm shocked, just shocked!!!
60 minutes had a story about all the government waste on granting private contracts in Iraq. I am sure they will pick up this story, but only if they can blame Bush.
Audit shows that the sun rises in the east 364 days per year. People all over the world are shocked by this news.
Leaches suck blood!
Who would have guessed?
I've always known there were huge cockroaches along the Gulf Coast -- but this BIG...
Semper Fi
August Headline: "FEMA footdragging during contract negotiations raises questions."
February Headline: "FEMA rush to sign contracts raises questions."
Yes, it will eventually be thousands of millions. In other words, billions.
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