Auditors: Katrina waste could top $2 billion

CNN ^ | December 26, 2006 | AP

[KantianBurke]

WASHINGTON (AP) -- The tally for Hurricane Katrina waste could top $2 billion next year because half of the lucrative government contracts valued at $500,000 or greater for cleanup work are being awarded with little competition.

Federal investigators have already determined the Bush administration squandered $1 billion on fraudulent disaster aid to individuals after the 2005 storm.

Now they are shifting their attention to the multimillion dollar contracts to politically connected firms that critics have long said are a prime area for abuse.

In January, investigators will release the first of several audits examining more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.

"Based on their track record, it wouldn't surprise me if we saw another billion more in waste," said Clark Kent Ervin, the Homeland Security Department's inspector general from 2003-2004. "I don't think sufficient progress has been made."

[KantianBurke]

"Federal funds will cover the great majority of the costs of repairing public infrastructure in the disaster zone -- from roads and bridges to schools and water systems. Our goal is to get the work done quickly. And taxpayers expect this work to be done honestly and wisely, so we will have a team of inspectors general reviewing all expenditures."

http://www.cnn.com/2005/POLITICS/09/15/bush.transcript/index.html

One doesn't know whether to laugh or cry at this incompetence.

[ExcursionGuy84]

And the Washington-Elites/Cocktail-party gossipers trumpet that "BUSH abandoned the Gulf Coast to drown in raw sewage."...

[KantianBurke]

No. He didn't abandon them. He left them rip the taxpayers off. Whoo hoo. Go team!

[weegee]

How much of it wound up in freezers?

[ASA Vet]

Stop the waste, reverse the pumps, plant Lake Orleans with stripers.

[Jaded]

Federal investigators have already determined the Bush administration squandered $1 billion on fraudulent disaster aid to individuals after the 2005 storm.

So the Bush administration hunted down all of those criminals and made them file fraudlent claims? They are more talented than we thought!

[weegee]

The only problems I hear of from Katrina these days are in New Orleans and Houston. The other areas moved on.

[L98Fiero]

"Federal investigators have already determined the Bush administration squandered $1 billion on fraudulent disaster aid to individuals after the 2005 storm."

By doing exactly, actually less than, what was demanded of them. The people who TOOK the money squandered it. Bush wasn't the one buying booze, porn and Gucci bags.

Damned if you do, damned if you don't for Bush on this one.

[Comus]

Clue for CNN - The Shaw Group - Gov. Blankstare's largest political contributor.

[KantianBurke]

Yeah God forbid the Federal government be responsible with our money and not hand it out haphazardly and to frauds.

[GovernmentShrinker]

That figure pales in the face of the sums that are being proposed to be spent on rebuilding a city below sea level in a hurricane zone.

[kcvl]

Clark Kent Ervin joined the Aspen Institute in January 2005, to explore the creation of a homeland security initiative.


Aspen Institute
Walter Isaacson
President & CEO

[Cicero]

the Bush administration squandered

This is what CNN is squealing now. Earlier, they demanded that Bush spend more billions of tax dollars, and fix the whole problem the day before yesterday.

[mtbopfuyn]

$2 billion is probably a very conservative number.

[CDHart]

I vote for crying. My husband has had open heart surgery and I'm on my second bout with cancer. We are paying medical bills and trying to pay everything off by retirement age. And this is what they do with money that I could really use, including tens of thousands that they have taken from us by force of law. In fact, crying is the least of what I want to do.

Carolyn

[PAR35]

Related:

Katrina Fraud Likely To Balloon Past $1B
http://www.freerepublic.com/focus/f-news/1758312/posts

[doberville]

Very good!!

[SmoothTalker]

This sort of thing is the biggest reason that a lot of people got discouraged with the Republican congress. We had both chambers and the White House and spend recklessly while at the same time paying lip service to fiscal conservatism. Had we shown restraint and acted better than sailors on shore leave, we'd still be in power.

[GovernmentIsTheProblem]

I wish the best to you and your husband. That sounds like a rough year....

[Little Ray]

ONLY $2 Billion?

[JBR34]

OK, I'll take the other side of the issue.

So fraud accounted for less than 2% of the total spent. That's a record. We need to duplicate this program. If we can get it right 98% of the time that's a great accomplishment.

And to think they did it during a disaster.

[freekitty]

I thout it was 1 billion just a few days ago. (scar)

[Jaded]

You can supervise next time.

[HarleyLady27]

I think I have finally seen what is happening with this situation:

President Bush, knowing that the leaders in NO are corrupt, decided to prove it to everyone that has been watching and following this pitiful garbage dump of a city..

Mayor choclate city is as corrupt as they come....all those busses sitting there that could be used..he didn't have to wait for the gov to call out for using them, he was the mayor and he could have done it himself, but no, he thought he would show the world what a lousy President we have. WRONG.

Then there is the Gov. She wouldn't know Sunday from Monday unless someone told her....she sat there in her Ivory Tower and WAITED for someone to tell her what to do, and alas, all those people were in danger....her thinking was, I will show how lousy President Bush is. WRONG.

And then the Senator William Jefferson D-LA. that had to have the National Guard take him by his house to get his money that the lobbists had given him for their favors. His thinking was that President Bush's Administration was so stupid that they would never know about the money. WRONG.

So what we have now is the proof of corruption, stupidy, and greed....and what party do they all belong to: RATS of course, Pelosi's party of corruption....and people voted them back in for more corruption, but now we the American people know better than to give one red cent for anything in NO....and that includes going there to the garbage city of America and spending time or money.

[CDHart]

Thank you!

[Retired Chemist]

Seems I remember an awful lot of wailing about the money not getting there fast enough and haste enables fraud.

[lepton]

1) It's horrible.

2) It's what happens when the government throws money at a problem quickly.

3) Would anyone have been happy at a slower more measured response?

[jwparkerjr]

As a very active freelance professional photographer I had the opportunity to be in Pascagoula, MS, and New Orleans, LA, areas, as well as all along the Gulf Coast between the two locations, in the days following Katrina. The complexity of getting into those areas and getting anything done is unbelievable. There are many levels of responsibility between the person who is going to haul away the debris and FEMA who eventually pays for it, and every level is fraught with opportunities for fraud. Not only is the job huge and complex, you have the added stress of needing to get it done as quickly as possible. The logistics of even a single phase of the recovery are mind boggling. You need a hundred or more very large truck, usually with a trailer to accommodate even more of a load, plus a crane to load them and the drivers and maintenance crews to operate them. There's already no place for people to live, no water, electricity, phone service, sewer, etc. and now you have to get thousands of people into the area to work. Again, every level has its own opportunities for fraud.

This is simply the facts of life after a storm. You're never going to have the perfect system for handling the aftermath of a large catastrophic event. Money is always going to slip through the cracks and it's always going to be pretty easy, after the fact in comfort and safety of an auditor's office, to find places were money and resources were wasted or just plain stolen.

[marron]

Anything coming out from Katrina I take with a grain of salt.

Any time you have a major disaster like this, with major amounts of cash being handed out quickly, you have people lining up to get their hand in the till. In a disaster situation, where you have to get action quickly, you are not going to get competitive bids for every project, its not feasible. You are going to hire the people who are on the ground ready to go. As a consequence, you are going to pay too much for some things, and some of the contractors on the ground ready to go will turn out to be fly-by-nighters. It goes with the territory.

You are also going to pay top dollar for everything, since everything isn't available down at the Home Depot, that was blown away during the storm. Some auditor can come in later and say you paid too much, thats his judgement.

We see the same kinds of criticisms coming out of a war zone. People want to know why something costs as much as it does in a war zone, why aren't there sufficient controls on the money, why don't you hold competitive bids under fire, why does everything cost ten times as much as it does in Des Moines or even Kuwait City. Battle-field logistics is a creature of its own, it is not for the faint of heart, and if you are going to let the bean-counters run it you are going to lose the war. When the action is fast and furious, you had better be prepared to tolerate loose-goose controls on the money, or stay at home.

Let the auditors do their job, but keep in mind the context.

[marron]

The complexity of getting into those areas and getting anything done is unbelievable.

I don't think this can be stressed too much.

There are many levels of responsibility between the person who is going to haul away the debris and FEMA who eventually pays for it, and every level is fraught with opportunities for fraud.

Not necessarily fraud. The men spending the money are doing so in good faith, trying to get something done. The men, companies, agencies lining up to do the work are dealing with incredible difficulties, and even keeping track of everything becomes problematical. Later when you are trying to explain to the auditor where the money went, he who was not there can accuse you of fraud, and trying to account for the money can be pretty tough.

Not only is the job huge and complex, you have the added stress of needing to get it done as quickly as possible. The logistics of even a single phase of the recovery are mind boggling. You need a hundred or more very large truck, usually with a trailer to accommodate even more of a load, plus a crane to load them and the drivers and maintenance crews to operate them. There's already no place for people to live, no water, electricity, phone service, sewer, etc. and now you have to get thousands of people into the area to work.

And where are these people going to come from? Why is a guy with a truck going to leave his on-going clients and responsibilities in Cincinatti to come live in the dirt in a disaster area? Everything he needs he has to bring with him, he has to pay a premium for everything he needs, and you are going to have to pay him a boot-load of money for doing it, not only to cover his costs, but also to cover the fact that normal pay he can make back home. You want him to live and work in a disaster area, you had better have the checkbook ready.

Again, the auditor can criticize you later for paying too much, but you have no choice. There is no such thing as a fair price, there is only the price people are willing to accept. Less than that, and you are standing on the street corner talking to yourself.

[jwparkerjr]

re: Not necessarily fraud

Oh, I quite agree! I only mentioned fraud in the context of what I was saying because the article was dealing with fraud.

My post was intended to be 100 per cent supportive of the efforts after Katrina and I apologize if it came across as anything less!

I spent 10 days between Pascagoula and New Orleans, going back and forth. I went to initial meetings held by FEMA with contractors, with meeting between local authorities and FEMA and a couple with just the FEMA people and one or two representatives of contractors to iron out questions about billing items. I never saw anything less than an honest attempt by both sides to get it right, but in every case they were tired and had other things waiting on them.

I spent one whole afternoon shooting the arrival of debris removal trucks and FEMA's work with the contractors to get the trucks measured and approved to start work hauling away hundreds of tons of debris.

Usually the contract is between a private company, Crowder Gulf Construction in this case, and any number of owner-operators who have come into the area to work for that contractor. There is then a contract between the company and the local authorities, in this case Jackson County, Mississippi and then there's the paperwork between the local authorities and FEMA to get reimbursed for the expenses. And there are problems at every step of the process. The owner-operator has to provide proof of insurance or has to agree to be paid less per load and the company picks up the insurance tab. They have to be concerned about what to do when they pick up trash and find it contains human remains. That can cost them half-a-day or more of work time and they are paid by the load, so it can really cost them to wait for someone to handle the remains. There are constant flare ups between the debris removal guys and property owners over what can and can't be put out for removal.

Then when the truck gets to the temporary dump someone has to certify the load and the amount of square yards removed.

And the tough part is the owner-operator is on his own to cover expenses pending payment. He has to have a place to stay, food to eat, a place to park his rig at night, etc.

I came back to Tampa from that shoot with an entirely different attitude toward the petty problems I face day to day doing my shoots!

It was really something to be in New Orleans and see dozens and dozens of police cars from Chicago or New York being escorted into town by the local police.

My most exciting moment was when I almost ran over a county worker at the Ponchatrain Causeway toll plaza! The toll booth was being manned by several automatic weapon toting soldiers and I was paying attention to them, not the dimwit that was stepping out of front of my car to ask for my ID! I tried to make light of it, but he was in no mood for humor! I told him that given a choice of paying attention to him or the guys with the weapons he was going to lose out every time!

I am used to getting a hard time from people I approach at news scenes. When they see me with my cameras and bags and etc. they can get very defensive. I was amazed at how little of that I encountered on this assignment! Every one I dealt with, except the very startled toll booth guy, was very nice and anxious to answer questions or offer a bottle of cold water.

God bless them all!

[jwparkerjr]

As sort of PS to my previous post, here's a link to some of the pictures from one of days I was up there: Pascagoula Images

[marron]

Thanks for the link, and the first hand observations. I've been a fly-on-the-wall on some remote projects, and have an idea of the logistics problems in that context, from which I extrapolate what it must be like to deal with something like this, but first hand knowledge is golden.

[Mad_Tom_Rackham]

So let me get this straight. Due to environmental activists (= Democrats) who obstructed levee upgrades and due to local and state corruption (= Democrats) which siphoned infrastructure funding, I now have to pay for the ensuing storm damages?

[Gondring]

You can supervise next time.

I'd do it (right) in a heartbeat, so please make me the alternate.

[jeffers]

Leopards don't change their spots.

I know where the money for the emergency levee lifts went, where it was supposed to go, and where most, if not all of any relief money sent to rebuild New Orleans will go.

The city is gone. You can let it go easily, you can fight like hell to rebuild it, and nothing will change. The people there do not know how to change, and what they were is untenable in the environment they were in. They couldn't wait to re-elect School Bus Nagin.

Corrupt liberals might be able to survive in a temperate climate with no natural disasters always hanging over their heads, but not at ten feet below sea level.

Square pegs fit in square holes, round pegs in round holes.

You can fight for decades trying to prove otherwise, but I already know everything I need to about New Orleans and its future. If you are an honest, hardworking conservative, my advice to you is to escape now while you still can.

If you are a liberal parasite, enjoy the fruits of all your effort and enjoy your future in the swamps and under water.

Those are your choices, in black and white. I wish it were otherwise, but it isn't.

[wordsofearnest]

My former congressman John Hostettler told you so.

[jwparkerjr]

It's so frustrating to me that any Democrat attempts to find blame for the problems after Katrina will be limited to the period of time after the storm, not the years and years and years that millions of dollars were poured into that region to prepare for just such an eventuality as Katrina. It is not an impossible task to secure New Orleans from disaster. But it's an expensive and exacting task. If the powers that be decide such a project is worthwhile it certainly can be done. But it won't be cheap, and it won't be done by those who have been in charge for the last 50 years.

I have a lot of fond memories of New Orleans and hate to think of it as gone, but it will never be what it was. And it was a long way down the road to destruction years before Katrina.

Your points are on dead center. I wish it were otherwise, but you have it figured out!