Watch­dogs warn of waste, fraud in storm re­lief ef­forts

Hun­dreds of mil­lions lost in wake of Ka­t­rina

The Washington Times Weekly - - National - BY SALLY PER­SONS

Congress is pre­par­ing to open the fed­eral check­book for Hur­ri­cane Har­vey, but bud­get watch­dogs say law­mak­ers should take a les­son from Hur­ri­cane Ka­t­rina, af­ter tax­pay­ers doled out $100 bil­lion — and in­ves­ti­ga­tors are still find­ing mas­sive fraud and waste 12 years later.

One in­spec­tor gen­eral this sum­mer sounded an alarm over some $2 bil­lion that New Orleans, the epi­cen­ter of Ka­t­rina dam­age, had asked the fed­eral gov­ern­ment to pony up to re­pair its sew­ers and streets. Au­di­tors said the city’s in­fra­struc­ture was a dis­as­ter even be­fore Ka­t­rina and that it ap­peared the city was try­ing to take the feds for a ride.

That was the worst, but by no means the only in­stance of waste or fraud stem­ming from the 2005 storm. Au­di­tors rooted out waste ev­ery­where, reg­u­larly re­leas­ing re­ports iden­ti­fy­ing bo­gus projects that to­taled hun­dreds of mil­lions of dol­lars.

Top fed­eral and state of­fi­cials have al­ready said Har­vey’s price tag is likely to be higher than Ka­t­rina’s, leav­ing watch­dogs fear­ful of another round of lav­ish spend­ing as Congress rushes to get money out the door.

“Just like the ‘ fog of war,’ there is a ‘fog of dis­as­ter,’ and the coun­try would be bet­ter served to mete out funds more de­lib­er­ately,” Steve El­lis, vice pres­i­dent of Tax­pay­ers for Com­mon Sense, said in a state­ment.

Texas Gov. Greg Ab­bott has said at least $125 bil­lion will be needed. A con­gress­woman from Texas has floated a $150 bil­lion num­ber.

The White House said it was pre­par­ing a first in­stall­ment of per­haps $6 bil­lion in emer­gency aid and will come back later with a big­ger re­lief pack­age.

But just as im­por­tant as the price tag is how the money is spent by the Fed­eral Emer­gency Man­age­ment Agency, ac­cord­ing to the watch­dogs.

“Speed and haste is the en­emy in this case in terms of ac­count­abil­ity,” said Les­lie Paige, vice pres­i­dent for pol­icy and com­mu­ni­ca­tions at Ci­ti­zens Against Gov­ern­ment Waste.

“It be­hooves ev­ery­one in this process go­ing for­ward to in­cor­po­rate, early on, safe­guards and ac­count­abil­ity stan­dards that are go­ing to be met and re­port­ing stan­dards,” she said.

Even when ac­count­abil­ity stan­dards are in place, they don’t al­ways work.

One ex­am­ple from Ka­t­rina was Holy Cross School, an all-boys parochial school in New Orleans that was de­stroyed.

The school re­built a spec­tac­u­lar new cam­pus with nearly $90 mil­lion in fed­eral as­sis­tance. But the Home­land Se­cu­rity in­spec­tor gen­eral in 2015 said the school broke fed­eral guide­lines on sev­eral fronts and that FEMA should de­mand re­pay­ment of more than $80 mil­lion.

The school fought the re­pay­ments, and Clancy Du­bos, who was chair­man of the school’s board of di­rec­tors, ex­plained in an on­line post­ing this year how they pre­vailed by re­fus­ing to ac­cede to any­thing less than they wanted.

“We fig­ured we just had to wear you guys out,” Mr. Du­bos re­called telling a FEMA bu­reau­crat. “He smiled and nod­ded in agree­ment.”

The big­gest Ka­t­rina boon­dog­gle un­cov­ered so far, ac­cord­ing to the Home­land Se­cu­rity in­spec­tor gen­eral, is New Orleans’ plans to spend $2.04 bil­lion of fed­eral money to re­pair the city’s sewer sys­tem.

In a July re­port, the in­spec­tor gen­eral said the city’s 100-year-old sys­tem had been in need of re­pairs long be­fore the storm and that had sew­ers been main­tained cor­rectly, the storm would not have caused such dam­age.

“This mas­sive in­vest­ment — rep­re­sent­ing al­most $5,200 for every man, woman, and child in New Orleans — while per­haps sorely needed, is not el­i­gi­ble for a FEMA dis­as­ter grant be­cause there is no ev­i­dence that the dam­age was caused as a di­rect re­sult of the storms,” act­ing As­sis­tant In­spec­tor Gen­eral John E. McCoy II said in the re­port.

In 2006, a year af­ter the storm, the Gov­ern­ment Ac­count­abil­ity Of­fice also flagged waste­ful spend­ing and pointed out the dif­fi­cul­ties FEMA had in try­ing to claw back bo­gus pay­outs.

The Ka­t­rina ex­pe­ri­ence left a num­ber of Repub­li­cans gun shy about mas­sive fed­eral spend­ing, and that played out in the af­ter­math of the 2012 Hur­ri­cane Sandy that struck the North­east.


Cara Craw­ford tried to ride her bike to church in Vi­dor, Texas. Texas Gov. Greg Ab­bott has said at least $125 bil­lion will be needed for storm re­lief and oth­ers have es­ti­mated more.

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