Tuesday, June 27, 2006

NYT: 'Breathtaking' Waste and Fraud in Hurricane Aid

Fair Warning: Reading the following in a sound proof room is advised so as not to disturb others with your screams of frustration. Don't miss the irony associated with the fraud case of Louisiana Department of Labor clerk, Wayne P. Lawless.

On the heels of GAO report: $1.4 billion in bogus assitance to hurricane 'victicms' comes this story from the New York Times (emphasis added):

WASHINGTON, June 26 — Among the many superlatives associated with Hurricane Katrina can now be added this one: it produced one of the most extraordinary displays of scams, schemes and stupefying bureaucratic bungles in modern history, costing taxpayers up to $2 billion...

...The tally of ignoble acts linked to Hurricane Katrina, pulled together by The New York Times from government audits, criminal prosecutions and Congressional investigations, could rise because the inquiries are under way. Even in Washington, a city accustomed to government bloat, the numbers are generating amazement.

"The blatant fraud, the audacity of the schemes, the scale of the waste — it is just breathtaking," said Senator Susan Collins, Republican of Maine, and chairwoman of the Homeland Security and Governmental Affairs Committee...

...The estimate of up to $2 billion in fraud and waste represents nearly 11 percent of the $19 billion spent by FEMA on Hurricanes Katrina and Rita as of mid-June, or about 6 percent of total money that has been obligated...

..."There are tools that are available to get money quickly to individuals and to get disaster relief programs running quickly without seeing so much fraud and waste," said Gregory D. Kutz, managing director of the forensic audits unit at the G.A.O. "But it wasn't really something that FEMA put a high priority on. So it was easy to commit fraud without being detected."...

...The most disturbing cases, said David R. Dugas, the United States attorney in Louisiana, who is leading a storm antifraud task force for the Justice Department, are those involving government officials accused of orchestrating elaborate scams.

One Louisiana Department of Labor clerk, Wayne P. Lawless, has been charged with issuing about 80 fraudulent disaster unemployment benefit cards in exchange for bribes of up to $300 per application. Mr. Lawless, a state contract worker, announced to one man he helped apply for hurricane benefits that he wanted to "get something out of it," the affidavit said. His lawyer did not respond to several messages left at his office and home for comment...

...R. David Paulison, the new FEMA director, said in an interview on Friday that much work had already been done to prevent such widespread fraud, including automated checks to confirm applicants' identities.

"We will be able to tell who you are, if you live where you said you do," Mr. Paulison said.

But Senator Collins said she had heard such promises before, including after Hurricane Frances in 2004 in which FEMA gave out millions of dollars in aid to Miami-Dade County residents, even though there was little damage.

Mr. Kutz said he too was not convinced that the agency was ready.

"I still don't think they fully understand the depth of the problem," he said.

In retrospect, Exploring the relocation option for Hurricane Katrina victims seems more resonable now then when recommended.



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