Grasshopper Green

http://www.cnn.com/2006/US/06/14/fema.audit/index.html


WASHINGTON (CNN) -- A $200 bottle of champagne from Hooters and $300 worth of "Girls Gone Wild" videos were among items bought with debit cards handed out by FEMA to help hurricane victims, auditors probing $1 billion in potential waste and fraud have found.

The cards -- given to people displaced by Hurricanes Katrina and Rita -- also bought diamond jewelry and a vacation in the Dominican Republic, according to the Government Accountability Office audit.

The GAO uncovered records showing that $1,000 from a FEMA debit card went to a Houston divorce lawyer; $600 was spent in a strip club and $400 was spent on "adult erotica products," all of which auditors concluded were "not necessary to satisfy legitimate disaster needs."

The GAO found that at least $1 billion in disaster relief payments by the Federal Emergency Management Agency were improper and potentially fraudulent because the recipients provided incomplete or incorrect information when they registered for assistance. (GAO report)

The GAO said the scope of the problem may be even larger, because it only looked at the validity of registration information and not at other forms of potential fraud.

FEMA acknowledged its shortcomings late Tuesday.

Spokesman Aaron Walker said FEMA has "revamped the registration process" and has a contract with a company that will verify immediately the identity and address of anyone for assistance.

"We are confident in the system we have in place at this point," Walker said. "We are prepared for the upcoming season."

The GAO also found that FEMA provided housing assistance to people who were not displaced, including at least 1,000 prison inmates, and also provided rental assistance to people who were simultaneously living in free hotel rooms.

Results of the GAO's audit will be presented Wednesday to an investigative panel of the House Homeland Security Committee. FEMA is part of the Department of Homeland Security.

The GAO also found that FEMA lost track of 750 debit cards, worth a total of $1.5 million.

After inquiries from the GAO, FEMA recovered about half of that money, which had not been distributed by JPMorgan Chase, the bank hired to run the program. But the agency still cannot account for 381 cards, worth about $760,000 total, which JPMorgan Chase says it distributed, according to the GAO.

GAO investigators estimated that 16 percent of FEMA's disaster relief payments were made to people who submitted invalid registrations, to the tune of about $1 billion. Because the figures were calculated using a statistical sample, however, the agency said the amount could range from $600 million to as much as $1.4 billion.

Among other problems found with the registrations, according to the GAO study:


People signed up for assistance using Social Security numbers that didn't exist or belonged to other people.


Aid applications contained bogus addresses for damaged property, or gave addresses for damaged property where the applicants did not live when the hurricanes struck. In one case, FEMA paid nearly $2,360 to a man whose allegedly damaged property was in a cemetery.


Payments were made to people who listed post office boxes as their damaged residences.


People submitted duplicate registrations, which FEMA did not detect.


More than 1,000 registrations used the names and Social Security numbers of prison inmates. According to the GAO, in one instance, FEMA paid $20,000 to a Louisiana prisoner who listed a post office box as his damaged property.

As part of its audit, the GAO used an undercover registrant who submitted a vacant lot as a damaged address.

FEMA paid the registrant $6,000 and even made payments after being notified by one its own inspectors, as well as an inspector for the Small Business Administration, that the damaged property could not be found, the GAO investigators found.

The GAO concluded that the potentially fraudulent payments were made because FEMA did not validate registrants' identities and the locations and ownership of purportedly damaged property.

While conceding that FEMA acted out of the need to provide assistance quickly, GAO investigators said the agency's own policies required additional verification before continuing payments.

The GAO study also found FEMA improperly provided rental assistance to people who were staying in hotels paid for by FEMA because the agency did not require hotels to collect Social Security numbers and FEMA registration information.

Without that information, FEMA could not verify if people were staying in hotels when they applied for rental assistance.

And because that information doesn't exist, GAO auditors said they could not determine how many people might have double-dipped -- or how much it cost the government.

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Since this mentions FEMA and not any charity based organizations (unless I missed one), this pisses me off. This money is earmarked to help people get back on their feet, make ends meet, and take care of their basic necessities...not to buy expensive champagne, luxury vacations, and the like. I'm not sure how FEMA handles these things...when Floyd hit North Carolina in '99, FEMA distributed debit cards to anyone who live in certain areas, regardless of whether any loss was suffered by the person...but the cards were for food only at the money spent could be controlled somewhat. I guess I just don't understand this system...it seems so flawed and wasteful, and honestly, this will make me seriously reconsider any charitible donations I make in the future, even though this story doesn't mention it. What do you all think? Does this surprise you? Anger you? Do you even care?

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Lady Sage

Yet another case of our tax dollars put to extreme misuse. I am not suprised.

cookmo

Don't skewer me for saying this, and I am not condoning the fund abuse, but I can see why some chose to do innapropriate things with there money. I mean, spending it on porn is a joke, but a trip is not really so bad. If I came frome the ninth ward in N.O.,worked some minimum wage job, was poor, had aways been poor, and always would be poor, why the hell the not take a trip? That trip might be the only vacation that person ever gets to take.


On a different, this is just one more example of how grossly inept the government is. They scrambled to do damage control after screwing up the relief effort, and in rushing to save face they screwed it up again.

flstf

Does this surprise me?
I am not surprised at the corruption but I am surprised that someone in the government cares enough to expose it.

Does this anger me?
No more than the abuse found in most other government programs.

Do I even care?
Yes, maybe I'll write to my elected polititians, they may read it between their fact finding trips to Europe and Hawaii, etc..

docbungle

So we're blaming FEMA for handing out money and not the people who blew the money on bs? There will always be people that abuse the system, no matter how good or bad the system is. It is these people that are the problem; taking advantage of their situation while at the same time pulling the "woe-is-me" routine.

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PredeconInferno

This, honestly, doesn't surprise me one bit.

With more money comes responsibility... some people just don't have it.

Can you honestly say this surprises you?

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Vincentt

I have to agree with docbungle.

The people suck.

FEMA isn't great, but don't forget that these type of people are ruining programs for everyone.

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jaco

I live near New Orleans and everyone here knows about these types of things going on. There is no fear of retribution in those that did these things and is usually bragged about openly. Its government money and most of those that did these things have been abusing the system for as long as they can remember so what makes you think this would be any different.

If you really want to see some money disappear, wait until the money starts pouring into the reconstruction and watch how much doesnt actually make it to the project. It's Louisiana politics and everyone knows about it and usually don't care unless it directly affects them.

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Sultana

Well, I'm not certain way this makes you reconsider charitable donations, as FEMA is not a charity organization. But it's always worthwhile to cast a wary eye on anyone asking for funds.

It doesn't surprise me.
This kind of thing happens all the time, all over the world (remember tons of donated food rotting in the harbors of Ethiopia while the local government officials sat on their asses or tried to make buck off it?)

It infuriates me.
I guess I still retain enough of my youthful idealism to get angry. Also, I am not yet jaded enough to feel there's nothing that could be done.

Yes, I care. And will continue to do so. However, I don't feel that there's anything I can do but take care of my friends, and friends of friends out there who are still needy.

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guthmund

I really don't understand why FEMA was handing out money at all.

Build shelters, stock food kitchens, hand out clothes, help 'manage' the 'emergency' and such, but blindly dole out cash? I just don't understand why the federal government still thinks throwing money willy-nilly at any problem en masse is going to work. I mean, it hasn't yet, eh?

That doesn't mean that I think FEMA is totally to blame. People can suck. I've seen some pretty scummy people do some pretty baseborn shit to get a little 'free' cash from the government, so, this doesn't really surprise me all that much.

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feelgood

It's government money!

My Dad always says "If they give it to you, take it and run"

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Cynthetiq

People are people and will always abuse freebies.

It happened with 9/11 money, and will happen again in the future.

The more I see of these things the more jaded I become and don't want to give or donate monies. But I'm not responsible for what people do with the money after I give it up. It's on them and their conscience not mine.

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Redlemon

Well, that was clearly research related costs. They got the Mardi Gras editions of Girls Gone Wild, to help with reconstruction and remember where everything was. Really.

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maleficent

Yeah but the government is getting that money from people who are paying taxes... Give it back...

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Ample

When people took these debit cards that FEMA handed out, did they sign something that said this is only for milk and cheese, and maybe a trip to Home Depot? If they didn’t, thats FEMA’s fault. I don’t think one can blame an individual for spending the money on what ever they want if there was no rules guarding the way the money should be spent. I don’t know, maybe there was rules.

If a billion dollars of fraud/waste has been found, wonder how much hasn’t been found? Contractors severely over charging for reconstruction I bet is probably near a billion by itself. There really needs to be better oversight on how much and where this money is dispersed.

feelgood

Are they gonna give it back to you?

The 8-ball says not likely

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Looking out the window, that's an act of war. Staring at my shoes, that's an act of war. Committing an act of war? Oh you better believe that's an act of war