September 18, 2005 in Nation/World

Probe exposes FEMA’s fiscal disasters

Sally Kestin, Megan O'Matz, John Maines and Jon Burstein Knight Ridder
 

AT A GLANCE

FEMA waste

Taxpayer money meant to help disaster victims instead has gone to thousands of people who suffered little or no damage, including:

$5.2 million to Los Angeles-area residents for the 2003 wildfires that burned more than 25 miles away;

$168.5 million to Detroit residents for a 2000 rainstorm that the then-mayor doesn’t even remember;

$21.6 million in clothing losses alone to Cleveland residents for a 2003 storm that brought less than an inch and a half of rain.

South Florida Sun-Sentinel

FORT LAUDERDALE, Fla. – The federal government’s mishandling of the Hurricane Katrina catastrophe is only the latest bungling in a national disaster response system that for years has been fraught with waste and fraud.

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

The Sun-Sentinel first exposed fraud and waste in federal disaster aid in Florida last year, when FEMA distributed $31 million in Hurricane Frances relief to Miami-Dade County residents who experienced no hurricane conditions. U.S. senators and federal auditors, reacting to those reports, feared similar problems had occurred throughout the country.

The newspaper 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 percent went to areas where official reports showed only minor damage or none at all, the Sun-Sentinel found.

Erosion of confidence

“It’s so disturbing because we have urgent needs to help individuals who truly are the victims of disasters,” said Sen. Susan Collins, R-Maine. “I think it erodes public support for disaster assistance when there is a pattern of wasteful and abusive spending.”

As chairwoman of the Senate Homeland Security and Governmental Affairs Committee, Collins investigated FEMA’s Miami-Dade payments and is now leading a congressional inquiry into the federal response to Katrina. FEMA declined to answer questions about the newspaper’s findings.

“Disaster assistance is provided at the specific request of a governor and we are constantly evaluating our programs,” FEMA spokeswoman Nicol D. Andrews wrote in an e-mail to the paper. “While always mindful of the generosity of the nation’s taxpayers, FEMA’s first priority remains the health and safety of disaster victims.”

In impoverished neighborhoods from California to the Carolinas, from Florida to Michigan, the newspaper found the same patterns. Residents call FEMA assistance “free money,” “easy money” and “mobility money.” Scamming FEMA is openly discussed.

In Baton Rouge, FEMA was a familiar and welcome sight long before the Louisiana capital was inundated with Katrina evacuees. In 2002, Hurricane Lili damaged small towns on the bayous but spared Baton Rouge, about 70 miles inland.

Yet FEMA gave $15.4 million to 13,714 parish residents in and around Baton Rouge.

On front porches and in grocery stores, word spread of a government handout that came without hassles. “Oh, man, it’s easy,” Elias Chaney, 49, of Baton Rouge said neighbors told him. “Get you a new TV. Get your own sofa set. Ain’t no red tape.”

Baton Rouge residents told the Sun-Sentinel of neighbors ripping siding off their homes to fake storm damage and then repairing it after FEMA inspectors left. Chaney said he knew of people passing broken televisions from one applicant to another, each claiming the TV and telling the government it had been ruined by the storm.

Wildfire smokescreen

In Los Angeles after the 2003 wildfires in surrounding areas, smoke was the key. Tell FEMA that smoke ruined your TV, got in your clothes, messed up the paint job on your car, residents said.

“All you’ve got to do is say something was damaged,” said Tasha Williams, a 26-year-old mother of three and tenant of Imperial Courts, a public housing development in the Watts section of Los Angeles. “It’s free money.”

FEMA gave out checks, some for almost $9,000, to Los Angeles-area residents.

“If it had been our program and the same thing had occurred, I would have started an investigation because clearly something went haywire,” said Dallas Jones, former director of the California Governor’s Office of Emergency Services.

In Michigan, a September 2000 storm flooded thousands of homes in the suburbs south of Detroit. State records in support of a presidential disaster declaration do not mention any problems within Detroit city limits, and local water officials reported no spike in complaints for flooding or sewer backups.

FEMA’s response – $168.5 million to 87,624 Detroit residents – turned into one of the “largest individual assistance declarations in U.S. history,” a Michigan state report noted.

“I would describe something like that as being catastrophic,” said George W. Ellenwood, spokesman for the Detroit Water & Sewerage Department. “I’m sitting here and thinking, ‘Why don’t we remember this?’ ”

After Hurricane Frances left Florida last year, the storm pounded the mountains and foothills of western North Carolina with up to 17 inches of rain, washing out roads and bridges, wrecking homes and triggering mudslides.

Yet residents in six counties in the southeastern part of the state known as the Coastal Plain region – 200 miles away – received more than half the $21 million FEMA awarded statewide.

“There was a lot of fraud,” said David L. Carter, emergency management director in Robeson County in southeastern North Carolina. “I’ll tell you, there was a lot of fraud.”

So much money poured into neighboring Bladen County that used car dealers and clothing stores placed signs in their windows that read, “We take FEMA checks,” said County Commissioner Delilah Blanks.

“(Residents) just went on a Christmas shopping spree for cars, just good-timing money,” Blanks said.

‘Mobility money’

In Baton Rouge, Shawanda Williams called her $600 FEMA check for Lili “mobility money.” “I went and got … another house” to rent, said the 22-year-old personal care assistant.

FEMA aid covers only uninsured losses and tends to be most heavily concentrated in poorer communities, where it can be a huge windfall. Unlike other government programs such as food stamps, where recipients get debit cards that can be used only for approved items, FEMA has traditionally handed out checks for up to $25,600.

FEMA determines the amount based on losses reported by applicants and approved by inspectors. Recipients are told to repair or replace items lost, but FEMA rarely follows up to see how the money was spent.

Chaney, of Baton Rouge, described FEMA as a “blessing” to poor people who struggle daily to buy food and pay their bills. “I guess some people saw an opportunity,” he said.

That opportunity has been known to FEMA for at least four years. In testimony before Congress after he took over FEMA in 2001, Joe Allbaugh cautioned that federal disaster assistance had evolved into “an oversized entitlement program.”

‘Darn good track record’

Allbaugh’s successor, former FEMA Director Michael Brown, denied any widespread problems, even after the U.S. Senate committee and federal auditors blasted his agency’s Hurricane Frances payments in Miami-Dade and 16 residents there were charged with fraud.

“It’s a pretty darn good track record,” Brown told CNN in July.

Under a barrage of criticism for his agency’s failings in its Katrina relief efforts, Brown resigned last Monday after being relieved of his duties and sent back to Washington.

In city after city, the Sun-Sentinel found, some people have applied for disaster assistance again and again, even when they had no damage.

In response to demands by U.S. senators to fix problems uncovered in the Frances payments in Miami-Dade, FEMA in August announced changes to its aid program in a document called “Building on Success.” Federal auditors are now in North Carolina investigating the Frances payments there.

Emergency managers said FEMA’s response to criticism is too little, too late.

“It’s just so much fraud,” said Blanks, the Bladen County, N.C., commissioner. “It’s unbelievable how corrupt that whole FEMA thing has become. People are just making up – just making up – these damages.”

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