NCPA - National Center for Policy Analysis


June 28, 2006

It turns out that thieves and wastrels feasting in the wake of Hurricane Katrina have been doing a heck of a job too -- pushing the tote in government loot toward $2 billion and counting, says the New York Times. 

Government investigators have found fraud and waste consuming more than 1 in every 10 dollars of the $19 billion spent so far on Katrina and Hurricane Rita -- double the usual rate after a disaster.  Thousands of criminal investigations are under way, with hundreds of people already charged with price-gouging and fraud.      Even frontline workers with the Red Cross and the Federal Emergency Management Agency are being charged with profiteering.

  • The most graphic evidence of FEMA mismanagement is the 10,000 mobile homes, costing $34,500 each, that proved useless in post-storm Louisiana and now sit empty at an Arkansas airfield at a storage cost of $250,000 a month.
  • Meanwhile, contractors billed taxpayers for phantom hotel guests, phantom emergency meals and phantom caravans of storm debris.
  • Even prison inmates allegedly gamed the system for housing aid. As much as 21 percent of the $6.3 billion sent directly to victims was improperly distributed, according to a detailed report by the Times.

The widespread fraud, waste and bungling was abetted by FEMA' s failure to put a high priority on existing tools for catching schemers and thieves, according to the Government Accountability Office.  FEMA officials, wary at the advent of a new hurricane season, insist that tougher accountability precautions are now in place.  But there's been no credible evidence of the top-to-bottom revamping that FEMA needs, says the Times.

Source: Editorial, "The Disaster Without End," New York Times, June 28, 2006.

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