Most Corrupt Agencies

FEMA
FEMA

The Cost of
Corruption & Incompetence

Former FEMA director Michael Brown and friend.
A political appointee with no real experience in disaster relief, Brown had to resign after Hurricane Katrina. (photo ©Vanity Fair)

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Most Corrupt Agencies

FEMA AWARDED $100s OF BILLIONS OF KATRINA CONTRACTS WITHOUT BIDDING OR WITH CURTAILED COMPETITION

Crisis and Cronies

LOUISVILLE, KY COURIER-JOURNAL, September 26, 2005 -- The federal government awarded hundreds of millions of dollars worth of contracts related to Katrina without bidding or with curtailed competition.

Two major contractors, including a subsidiary of Halliburton that was cited by federal auditors for unsubstantiated billing in Iraq, were represented by lobbyist Joe Allbaugh, the president's former campaign manager and former director of the Federal Emergency Management Agency.

Moreover, a murky $568 million debris-removal contract was given to a client of the former lobbying firm of Mississippi Gov. Haley Barbour, a former GOP national chairman.

And Bechtel Corporation, which was awarded a contract that may be worth $100 million, has faced scathing criticism for runaway costs and poor work on the "Big Dig" construction project in Boston.

The purpose of emergency aid is to help victims, not profiteering contractors. One wonders if this administration understands the distinction.

FEMA BATTERED BY WASTE, FRAUD

After some recent disasters, money poured into areas that suffered little or no damage

September 18, 2005, LOS ANGELES TIMES -- The national disaster response agency that mishandled the Hurricane Katrina catastrophe has for years been fraught with waste and fraud.

In five years, the Federal Emergency management Agency poured at least $330 million into communities that were spared the devastating effects of fires, hurricanes, floods and tornadoes, an investigation by the South Florida Sun-Sentinel has found.

Taxpayers' money meant to help victims recover from catastrophes has instead gone to people in communities that suffered little or no damage, including:

$5.2 million to L.A. area residents more than 25 miles from 2003 wildfires for which help was designated. Many claimed non-existent smoke damage.
$168.5 million to Detroit residents for a 2000 rainstorm that the then-mayor doesn't even remember.
$41.4 million to Cleveland residents after a 2003 storm that brought less than 1 1/2 inches of rain, including $21.6 million for clothing losses. Julie Cobb, 37, whose southeast Cleveland neighborhood received $6 million from FEMA, said "everybody was talking about it on the bus. All you had to do was tell FEMA stuff was ruined and they'd send you a check. If you had a little water in the basement, you could throw some stuff down there and get some money for it."
$1.7 million to 1,922 residents of Long Beach, CA after the 2003 wildfires which got nowhere close to Long Beach. Many residents of a low-rent apartment building got money after one discovered the government would pay for furniture soiled by soot when windows were left open.

The South Florida Sun-Sentinel examined 20 of the 313 disasters declared by FEMA from 1999 through 2004, selecting cities where the agency's inspectors said they had encountered large-scale fraud. Of the $1.2 billion FEMA paid in those disasters, 27% went to areas where official reports showed minor damage or none.

In impoverished neighborhoods from California to the Carolinas...scamming FEMA is widely known and openly discussed.

FEMA PAYOUTS CALLED 'HUGE WASTE OF MONEY'

After Hurricane Wilma hit Florida, more aid went for generators than to fix homes

December 31, 2005, LOS ANGELES TIMES -- In the first seven weeks after Hurricane Wilma, $95 million in federal disaster aid went to buy Floridians generators and clean-up items, more than the government spent to fix homes damaged by the October storm.

FEMA paid 117,000 residents under a controversial policy that reimburses anyone, regardless of income, for generators, chain saws, wet/dry vacuums, air purifiers and dehumidifiers. In Broward County, the reimbursements totaled $41 million, and in Palm Beach County, $19 million--exceeding the amount FEMA spent on home repairs.

The Wilma claims also demonstrated that FEMA's practice of reimbursing people more than they paid may be widespread. FEMA reimbursed $836 per generator to 99% of the claimants, but spokesmen for Lowe's and Home Depot said their top-selling generators in Florida cost $499 to $699.

The payments renewed calls from politicians on both sides of the aisle to change the policy. "The notion that we buy generators is absolutely crazy--for anyone," said Rep. Mark Foley, R-Fla. "I just think it's a huge waste of money." State Sen. Ron Klein (D-Boca Raton) asked Florida's Auditor General to review the payments.

FEMA spokeswoman Frances Marine issued a one-sentence statement: "We're going to fix it." Asked repeatedly to elaborate, she said in an e-mail: "Over the past several days, you have asked for our reaction/statement regarding the Sun-Sentinel's finding that a majority of Floridians were reimbursed the fixed amount as opposed to the amount reflected on receipts for generators. Our comment on the generators issue remains: We're going to fix it."

That's telling them.

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