Tuesday, June 27, 2006

Big Money Squandered in Katrina Relief Effort

Paint chips scattered on the floor? No, this is a picture of roughly $400 million worth of mobile homes sitting unused on an Arkansas airfield.
Previous reports on fraud in the Katrina relief effort focused on the misuse of the $2,000 debit cards distributed to victims. The misuse of the debit cards made for some good press, but that was nickles and dimes compared to the real money that was lost in the confusion.
The New York Times reports that much bigger sums -- totaling as much as $2 billion -- were lost to bureaucratic bungling or brazen fraud.
First the bungling:

There are the bureaucrats who ordered nearly half a billion dollars worth of mobile homes that are still empty, and renovations for a shelter at a former Alabama Army base that cost about $416,000 per evacuee.
The $7.9 million spent to renovate the former Fort McClellan Army base in Anniston, Ala., included fixing up a welcome center, clinic and gymnasium, scrubbing away mold and installing a protective fence between the site and a nearby firing range. But when the doors finally opened, only about 10 people showed up each night, leading FEMA to shut down the shelter within one month.
The mobile homes, costing $34,500 each, were supposed to provide temporary housing to hurricane victims. But after Louisiana officials balked at installing them inland, FEMA had no use for them. Nearly half, or about 10,000, of the $860 million worth of units now sit at an airfield in Arkansas, where FEMA is paying $250,000 a month to store them.

As for the fraud:
A hotel owner in Sugar Land, Tex., has been charged with submitting $232,000 in bills for phantom victims. And roughly 1,100 prison inmates across the Gulf Coast apparently collected more than $10 million in rental and disaster-relief assistance.
All of this points to a lack of financial controls in a floundering agency that was woefully unprepared to manage a recovery effort of this magnitude.
Photo: Robert King/Polaris


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