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Senate Hears Testimony on Katrina, Rita Waste


The Federal Emergency Management Agency wasted more than a billion dollars in a hurricane aid over the past 15 months and is unlikely to recover most of that money. That's according to congressional auditors who say they continue to find cases of fraudulent and improper payments made in response to Hurricane Katrina.

NPR's Pam Fessler reports.

PAM FESSLER: The litany of bad payments is, at times, mind-boggling. Investigators with the Government Accountability Office found that FEMA gave out $17 million in rental aide to people already living in FEMA trailers, where they don't have to pay rent. Other checks went to individuals staying in government-paid apartments.

Gregory Kutz of the GAO told the Senate Homeland Security Committee yesterday that many people filed disaster claims for the same property under both Hurricanes Katrina and Rita. He said investigators found $20 million in duplicate payments.

Mr. GREGORY KUTZ (Managing Director, Forensic Audits and Special Investigations, Government Accountability Office): It appears that some of these individuals were paid twice for the same television, refrigerator, washer and dryer.

FESSLER: Kutz said millions more in aide was given to hundreds of ineligible foreign students and workers. GAO investigator John Ryan told committee chairwoman Susan Collins that he was also still having trouble tracking 20 flat-bottom boats for which FEMA paid an unusually high price of more than $200,000.

Senator SUSAN COLLINS (Republican, Maine): Let me get this straight. The government paid twice what the market price should have been for these 20 boats and yet does not have legal title to a single one of the boats, and at least one of the boats isn't even in possession of FEMA. Is that correct?

Mr. JOHN RYAN (Assistant Director, Forensic Audits and Special Investigations, Government Accountability Office): That's correct. And I'll add that there's another boat still missing, and no one really knows where that's at.

FESSLER: Collins said she was exasperated by the misspending, especially because the needs after Hurricane Katrina were so great. Just last week, a federal judge found that FEMA had wrongly stopped housing benefits for thousands of victims and ordered that they be restored.

No one from FEMA was at the hearing to respond, but in a statement a spokesman said the agency has acknowledged problems with its assistance programs and is trying to fix them.

Democrat Joseph Lieberman of Connecticut asked Kutz whether the agency also might have found itself pulled in too many directions right after the storm.

Senator JOSEPH LIEBERMAN (Democrat, Connecticut): Did you find any evidence that somebody high up in FEMA said, get out the checks. If there's a mistake we'll come and deal with it later, but just - let's not get criticized for not making payments.

Mr. KUTZ: It's very possible. We didn't see any documented evidence of that.

FESSLER: But Kutz said FEMA clearly didn't have enough people early on to track down hundreds of millions of dollars in questionable payments and that doing so could have delayed checks for months.

Mr. KUTZ: And so the choice at that point was shoot the money out the door and try to come back and collect it later.

FESSLER: But he said that's proving to be very difficult now. So far, FEMA has recouped only $7 million of the estimated one billion dollars in overpayments. And that doesn't include thousands of dollars the agency sent to GAO investigators who used fake identities to file claims in an effort to test the system.

Kutz said the big problem is that FEMA's aide programs were uncoordinated and in some cases relied on different databases.

Mr. KUTZ: We found the same thing for the hotel program...

Sen. LIEBERMAN: Right.

Mr. KUTZ: ...the trailer program, the mobile home program. They're all stove piped programs within FEMA, and these people don't appear to talk very well.

FESSLER: He said any solution FEMA comes up with should be tested extensively before the next disaster.

Pam Fessler, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Pam Fessler is a correspondent on NPR's National Desk, where she covers poverty, philanthropy, and voting issues.