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June 27, 2006

Your Tax Dollars at Play

This just in; government aid wasted! Film at 11.

Among the many superlatives associated with Hurricane Katrina can now be added this one: it produced one of the most extraordinary displays of scams, schemes and stupefying bureaucratic bungles in modern history, costing taxpayers up to $2 billion.

While the staggering dollar amount is indeed news, the idea that big government produces big waste shouldn't be a surprise to anyone. I wonder how the percentage of waste compares to the private charities that responded.

Government cannot react quickly and efficiently, and the bigger it is the worse it gets. This was not news to those trying to respond.

Such an outcome was feared soon after Congress passed the initial hurricane relief package, as officials at the Federal Emergency Management Agency and the American Red Cross acknowledged that their systems were overwhelmed and tried to create new ones on the fly.

"We did, in fact, put into place never-before-used and untested processes," Donna M. Dannels, acting deputy director of recovery at FEMA, told a House panel this month. "Clearly, because they were untested, they were more subject to error and fraud."

Unfortunately, the public has come to expect government to act on a moment's notice and turn on a dime. Somehow, they've been sold on the idea that it's government's job to solve all our problems, and that they'll do so with the utmost efficiency. (Gee, wonder who's been selling that bill of goods. Note that the only legislators expressing outrage are Republicans. The Times couldn't find any Democrats to speak out against wasteful spending?)

How inefficiently? Way out of proportion.

Officials in Washington say they recognized that a certain amount of fraud or improper payments is inevitable in any major disaster, as the government's mission is to rapidly distribute emergency aid. They typically send out excessive payments that represent 1 percent to 3 percent of the relief distributed, money they then ask people to give back.

What was not understood until now was just how large these numbers could become.

The estimate of up to $2 billion in fraud and waste represents nearly 11 percent of the $19 billion spent by FEMA on Hurricanes Katrina and Rita as of mid-June, or about 6 percent of total money that has been obligated.

And that's just the fraud they could find. They're just getting started.
To date, Mr. Dugas said, federal prosecutors have filed hurricane-related criminal charges against 335 individuals. That represents a record number of indictments from a single hurricane season, Justice Department officials said. Separately, Red Cross officials say they are investigating 7,100 cases of possible fraud.

Congressional investigators, meanwhile, have referred another 7,000 cases of possible fraud to prosecutors, including more than 1,000 prison inmates who collected more than $12 million in federal aid, much of it in the form of rental assistance.

Investigators also turned up one individual who had received 26 federal disaster relief payments totaling $139,000, using 13 Social Security numbers, all based on claims of damages for bogus addresses.

Thousands more people may be charged before the five-year statute of limitations on most of these crimes expires, investigators said.

Your tax dollars at work. Your charity dollars are, however, working a lot harder. Unfortunately, the idea that the government is this unending source of cash when disaster strikes, and the taxes levied in pursuit of that utopia, mean less for private charities and more for the layers of federal bureaucrats, the overhead of which isn't in this accounting of fraud and abuse.

Posted by Doug at June 27, 2006 01:29 PM

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this is all well and good but what about the real katrina survivors like us who can't get reimbursed or even assisted with housing needs.

i am sorry there are thieves but should we suffer because of them????

all of a sudden FEMA keeps changing requirements for help. no matter what you give them they keep asking for other things? what is up? are they out of money?
if people are donating where do I go to get some cash assistance?
unemployed in B.R. and want to go home to New Orleans!!!

Posted by: donnna shaw at June 28, 2006 03:55 AM

I'm very sorry to hear about your loss and your situation. I won't pretend to be able to imagine what it must be like.

When the Katrina relief effort was in full swing, this blog supported the Salvation Army's effort. You can find the Army's information in Baton Rouge, and all of Louisiana, on this web site.

This FEMA web page has general information on FEMA housing assistance. I hope it may have some information new to you.

Posted by: Doug Payton at June 28, 2006 09:57 AM