The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Grifters Give FEMA a Run for Their Money

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The Government Accountability Office (GAO) recently released its audit of the Federal Emergency Management Agency’s (FEMA) efforts in the aftermath of Hurricanes Rita and Katrina.  The report estimated that fraudulent payments totaled between $600 million and $1.4 billion. 

Through the Individuals and Households Program (IHP), FEMA provided expedited assistance of $2,000 to displaced individuals for immediate emergency needs.  Hurricane victims could also receive up to $26,200 in payments for temporary housing, property repair and replacement, and other necessities.  FEMA distributed $6.3 billion in IHP aid before February 2006. 

FEMA neglected to validate the identity of the recipients, the damages they claimed, and whether the damage was a result of the hurricanes.  Payments were made to registrations containing false Social Security Numbers (SSNs) and fake damaged addresses.  One registrant received $7,328 for expedited and rental assistance even though he moved out one month before Katrina hit.  Another recipient used different SSNs to make 13 damaged property claims.  Payments went to duplicate registrations already recorded in FEMA’s system. 

FEMA gave about $5.3 million to registrants claiming post office boxes as their damaged residence.  One individual claimed a New Orleans cemetery for a damaged property.   

Some aid recipients were incarcerated at the time of the hurricanes.  FEMA paid more than $20,000 to an inmate who used a post office box as his damaged property.  Other inmates received payments from a simple phone call, requesting that the checks be mailed to out-of-state accounts.  In some cases, FEMA funded rental assistance even after the inspector could not find the damaged property claimed in the registration.  

FEMA simultaneously provided rental assistance and free hotel lodging to some victims.  One individual received $2,358 in rental assistance while staying 70 nights in a hotel in Hawaii at $100 per night.  Neither FEMA nor the hotels required SSNs or registration numbers for residents. 

There were government debit card purchases for diamond jewelry, a Caribbean cruise, professional football tickets, and even services from a Houston divorce lawyer.  Other items were a $600 tab at a strip club, $400 for “adult erotica products,” a $200 bottle of champagne at Hooters, $300 worth of “Girls Gone Wild” videos, fireworks, and a sex change procedure. 

In a June 14 Associated Press article, a FEMA spokesman said that the agency takes “very seriously our responsibility to be outstanding stewards of taxpayer dollars, and we are careful to make sure that funds are distributed appropriately.”  The agency made similar assurances after Hurricane Andrew and the hurricanes that hit Florida in 2004, yet Hurricane Katrina proved to be one of the biggest fraud operations in U.S. history. 

FEMA must correct flawed procedures to regain some of credibility as the new hurricane season begins.  Automated checks to confirm recipients’ identities are a good start.  The GAO recommends that FEMA physically inspect property claims instead of relying on geospatial maps. 

Congress is considering legislation that will strengthen penalties for fraud.  However, procedural and legal improvements will do little good if FEMA remains bereft of common sense in the aftermath of a disaster.  The ultimate lesson of FEMA’s repeated debacles is that state and local organizations should be the primary actors during emergency response and recovery operations.   

Mary Krulia

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