G. ROBERT HILLMAN
The Dallas Morning News
WASHINGTON - (KRT) - Fraud, waste, scams - and just plain shady deals.
As rescue and recovery turns to rebuilding and reconstruction along the Gulf Coast devastated by Hurricane Katrina, the likelihood of abuse escalates with the rapid infusion of federal funds, already exceeding $62 billion.
So much money will be going to so many people so fast that some fraud is inevitable, said Rep. Mac Thornberry, R-Texas, one of the congressional authorities on homeland security.
"The challenge," he added, "is to keep it to a minimum."
There is particular concern on Capitol Hill that the relatively small Federal Emergency Management Agency, mired in controversy over its initial ragged response to the killer hurricane, cannot - or will not - provide adequate oversight.
FEMA director Michael Brown, who was recalled to Washington from the disaster area by his boss, Homeland Security Secretary Michael Chertoff, resigned Monday. But FEMA remains the clearinghouse for much of the hurricane relief. And it's been blistered by federal investigators for its handling of claims last year in Miami-Dade County, Fla., after Hurricane Frances.
Nearly $31 million in spending was questioned by the homeland security inspector general - and more than a dozen county residents were indicted for fraud.
Rent was given to those who did not need it, the audit found. Equipment was purchased without proof of need. And several funerals were paid for in cases not tied to the hurricane, which came ashore nearly 100 miles to the north from where the deaths occurred.
"Given the complexity of what is occurring in the gulf, I can only imagine that these types of mismanagements and inefficiencies are being exaggerated tenfold," said Rep. Robert Wexler, D-Fla., who called for Brown's resignation in January after Fort Lauderdale's Sun-Sentinel newspaper detailed abuses in FEMA's handling of storm funds.
The inspector general recommended a wholesale tightening of FEMA's procedures for assessing claims and urged it to recoup some of the settlement funds, though only small portions of the questionable claims.
FEMA did not respond to a reporter's request for explanations on how such problems might now be averted.
In the wake of Katrina, which slammed the Gulf Coast two weeks ago, emergency spending began at an eye-popping $500 million a day and quickly rose to $2 billion. And while White House budget director Joshua Bolten says he does not foresee sustained spending at that pace, there is no end in sight.
Various forecasts have placed the total costs of Katrina at well over $100 billion and climbing exponentially. Should they approach $300 billion - at least a probability considering the massive destruction and population relocations that are just now being assessed - they would exceed the U.S. costs for the wars in Afghanistan and Iraq.
So far, much of the attention has focused on the early, sluggish response to Katrina, with much finger pointing among local, state and federal officials. But many in Congress recall cases of federal spending inefficiency following the Sept. 11 terrorist attacks four years ago and in the rebuilding of Iraq as red flags for the latest hurricane relief.
To at least monitor the new spending, Congress, which rushed the spending bills to President Bush's desk without committee hearings, has mandated in the last $51.8 billion appropriation a pair of new oversight mechanisms: Weekly spending reports by homeland security to the House and Senate appropriations committees and $15 million for more aggressive auditing by the department's inspector general.
If nothing else, Thornberry suggested, "There are a lot of people who are going to be watching very, very closely how well they administer this money, in terms of preventing fraud but also how effectively it is being used."
That's not enough, though, for Rep. Joe Barton of Texas, the Republican who chairs the House Energy and Commerce Committee. He supported the first $10.5 billion emergency spending bill, but not the second for $51.8 billion.
"I am not opposed to spending the money to rebuild the economy and the public infrastructure," he said. "But I am opposed to just throwing federal taxpayer dollars at a problem because people are in a panic that we need to show that we are doing something."
The weekly reports and extra audit attention are good first steps in additional oversight, he said. But there should be more, including wide-ranging committee hearings.
His own panel, he noted, had already held one hearing on Katrina's impact on gasoline and other energy matters. And he stood ready to convene others.
"We have a system in place," he said. "We ought to use it."
House Minority Leader Nancy Pelosi, D-Calif., wants to take another step or two and establish an independent commission to oversee government contracts related to Katrina relief.
Additionally, she urged tough congressional oversight to thwart price gouging in the sale of gasoline - and natural gas and home heating oil, whose prices are expected to soar this winter.
There was no indication on Capitol Hill, however, that such a commission was catching on, particularly as Republicans, who control both the House and Senate, and minority Democrats continued to wrangle over a GOP proposal for a special, joint committee to investigate the government response to Katrina.
At the White House, press secretary Scott McClellan said the administration was well aware of the possibilities for fraud and would tolerate none of it.
Attorney General Alberto Gonzales had formed a Justice Department task force to deal with reports of such crimes, McClellan said, and intended to aggressively prosecute any perpetrators.
In addition to government benefit fraud similar to that in Florida after Hurricane Frances, the Justice Department is interested in pursuing insurance fraud, charity fraud and identity theft, which could easily escalate with documents stolen from abandoned homes and businesses.
The task force will have national reach, the attorney general said, and will include personnel from the FBI, the Federal Trade Commission and the U.S. postal inspection service.
And it will mount cooperative investigations with local and state law enforcement agencies.
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© 2005, The Dallas Morning News.
