Washington, D.C. – Citizens Against Government Waste (CAGW) today posted on its web site a review of wasteful spending related to Hurricane Katrina and reiterated its recommendations for avoiding widespread waste, fraud, and abuse in disaster relief efforts. 

“The worst disaster in the history of the U.S. also became one of its biggest fraud operations,” CAGW President Tom Schatz said.  “Petty criminals, contractors, federal bureaucrats, and members of Congress all share responsibility for aggravating the suffering of hurricane victims.  The rush to spend a pile of tax dollars led to an unprecedented display of self-interest and incompetence.” 

Examples cited by CAGW include: 

• An audit from the Government Accountability Office estimates that as much as 21 percent of the $6.3 billion given directly to victims might have been improperly distributed.  The Federal Emergency Management Agency (FEMA) did not verify the identity or address of hundreds of thousands of aid recipients.  There are at least 785 criminal cases under investigation by the Hurricane Katrina Task Force. 
• FEMA paid $900 million for 26,000 trailers only to find its own regulations prohibit using them in flood plains. 
• The Senate rejected an amendment proposed by Sen. Tom Coburn (R-Okla.) to redirect funding from the “bridges to nowhere” in Alaska to hurricane recovery in the Gulf Coast.  

CAGW’s recommendations for reforms include:  Pre-selecting contractors through a competitive process before disaster strikes; requiring automated identity checks for aid recipients; appointment of a chief financial officer to oversee all recovery spending in the aftermath of a disaster; aggressive pursuit and punishment of offenders; increasing funding for oversight bodies such as the Government Accountability Office and inspectors general; and barring companies from future government contracts if found guilty of fraud.

“FEMA has progressed in some areas, such as requiring computer background checks for aid recipients.  However, the solution is not always procedural.  Sometimes what is needed is a good dose of common sense.  In the aftermath of a disaster, the federal government should take a back seat to state and regional government response teams and charitable organizations, which are better positioned to provide accommodations for the displaced,” Schatz concluded.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.