‘Breathtaking’ Waste and Fraud in Hurricane Aid
Today’s New York Times fronts a story entitled “‘Breathtaking’ Waste and Fraud in Hurricane Aid.”
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. 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. 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. And there is the Illinois woman who tried to collect federal benefits by claiming she watched her two daughters drown in the rising New Orleans waters. In fact, prosecutors say, the children did not exist.
The tally of ignoble acts linked to Hurricane Katrina, pulled together by The New York Times from government audits, criminal prosecutions and Congressional investigations, could rise because the inquiries are under way. Even in Washington, a city accustomed to government bloat, the numbers are generating amazement. “The blatant fraud, the audacity of the schemes, the scale of the waste — it is just breathtaking,” said Senator Susan Collins, Republican of Maine, and chairwoman of the Homeland Security and Governmental Affairs Committee.
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.”
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.
Truly a shame, if entirely predictable. While some of the blame here falls on FEMA, DHS, and the administration, it’s mostly just the nature of sympathy politics. By rushing to dump billions of dollars on the problem to demonstrate that “we care” about the victims of disasters and to avoid accusations of moving too slowly, we dumped money out there without normal safeguards.
Given the nature of the disaster, it may have been entirely reasonable to take people’s word for the fact that they’d lost children, for example. But this created a climate where sleazy people with no conscience could take advantage of “free money.”