Friday, February 17, 2006


By William Fisher

If Hurricane Katrina struck New Orleans today, the government would be no better prepared to cope with it than it was last August when it flooded the city, wrecked much of the U.S. Gulf Coast, and killed 1,400 people.

This is the consensus reached by three new government reports and testimony Monday before a Senate Committee.

The reports detail an almost total failure in planning for and dealing with the devastating impacts of the disaster, massive waste in government procurement practices, widespread fraud by recipients of relief and absence of systems to monitor it, price gouging, and questionable no-bid contracts by companies that often did little actual work.

And, in testimony before a Senate committee Monday, witnesses said that while the Federal Emergency Management Agency (FEMA) – which has principal responsibility for disaster planning and relief – has taken some steps to improve, these are likely to fall far short of what is needed before the 2006 Hurricane Season begins.

Two of the reports, released by the Government Accountability Office and the Homeland Security Department's office of inspector general, detail a series of accounting flaws, fraud and mismanagement in their initial review of how $85 billion in federal aid is being spent.

These two audits found that up to 900,000 of the 2.5 million applicants who
received aid under FEMA's emergency cash assistance program -- which included the $2,000 debit cards given to evacuees -- were based on duplicate or invalid Social Security numbers, or false addresses and names.

The third report -- "A Failure of Initiative" -- expected to be issued this week by Republicans in the House of Representatives -- claims that Hurricane Katrina “exposed the U.S. government's failure to learn the lessons of the Sept. 11, 2001, terrorist attacks, as leaders from President Bush down disregarded ample warnings of the threat to New Orleans and did not execute emergency plans or share information that would have saved lives.”

The 600-page report lays primary fault with the passive reaction and misjudgments of top Bush aides, singling out Homeland Security Secretary Michael Chertoff, the Homeland Security Operations Center and the White House Homeland Security Council.

The report found that "earlier presidential involvement could have speeded the response" because President George W. Bush alone could have cut through all bureaucratic resistance.

The report paints Chertoff, who took over the mammoth DHS six months before the storm, as detached from events. It contends he activated the Government’s emergency response systems "late, ineffectively or not at all," delaying the flow of federal troops and materiel by as much as three days.

The White House did not fully engage the president or "substantiate, analyze and
act on the information at its disposal," failing to confirm the collapse of New
Orleans's levee system on Aug. 29, the day of Katrina's landfall, which led to
catastrophic flooding of the city of 500,000 people. Some 1,400 people lost their lives in New Orleans and elsewhere along the Gulf Coast.

And on the ground, Federal Emergency Management Agency (FEMA) director Michael D. Brown, who has since resigned, field commanders and the U.S. military's commanding general set up rival chains of command.

In testimony before Sen. Collins’s committee last week, Brown claimed he had kept senior White House aides, including the president’s chief and deputy chief of staff, fully informed about conditions on the ground, including the levee breaks.

He shifted blame for his agency’s performance to Chertoff who, Brown said, has chosen defense against terrorist attacks over protecting the homeland from natural disasters.

Chertoff on Monday rejected this criticism. "I want to tell you I unequivocally and strongly reject this attempt to drive a wedge between our concerns about terrorism and our concerns about natural disasters," he said in a speech.

The House Republican report says the Bush administration was informed on the day Hurricane Katrina hit that the levees had been breached. The president and other top administration officials earlier said that they had learned of the breach the next day.

That delay was significant, the report says. "If the levees breached and flooded a large portion of the city, then the flooded city would have to be completely evacuated," the draft report says. "Any delay in confirming the breaches would result in a delay in the post-landfall evacuation of the city." It adds that the White House itself discounted damage reports that later proved true.

"If this is what happens when we have advance warning, we shudder to imagine the consequences when we do not," the draft says, referring to the potential for a
terror attack. "Four and a half years after 9/11, America is still not ready for
prime time."

"It remains difficult to understand how government could respond so
ineffectively to a disaster that was anticipated for years, and for which
specific dire warnings had been issued for days," the report says. "This crisis
was not only predictable, it was predicted."

The homeland security secretary, the report says, should have moved two days before Hurricane Katrina hit — when the National Weather Service issued dire predictions about the storm — to set up a special interagency leadership team to ensure that emergency supplies and rescue squads would be in place ahead of the storm.

His department also should have done more to help evacuate the Gulf Coast, the
report says. The Homeland Security Department, the draft report says, "failed to anticipate the likely consequences of the storm and procure the buses, boats and aircraft that were ultimately necessary to evacuate the flooded city prior to Katrina's landfall."

The House Republican group as well as the Senate committee have charged that the White House failed to provide copies of e-mail messages or other
correspondence by senior advisers to the president.

The report’s criticism also extended to the administrations of Louisiana Governor
Blanco and Mayor Ray Nagin of New Orleans.

Mr. Nagin, the report says, waited far too long to issue a mandatory evacuation
order. The city and the state also had no reliable system to ensure that people
in nursing homes or hospitals, or the estimated 100,000 residents without
transportation, could get out of harm's way.

"If 9/11 was a failure of imagination," it says, "then Katrina was a failure of initiative," the House report charges.

A report presented Monday to a Senate Committee by the congressional watchdog, the Government Accountability Office (GAO), found that “Thousands of applicants for federal emergency relief money after Hurricanes Katrina and Rita used duplicate or invalid Social Security numbers or bogus addresses.”

The report suggests that the $2.3 billion program was a victim of extensive fraud.

GAO’s examination of the Expedited Assistance program determined that the Federal Emergency Management Agency (FEMA) failed to take even the most basic steps to confirm the identifies of about 1.4 million people who sought expedited cash assistance, leaving the program vulnerable to the “significant fraud and abuse.

The report says that FEMA itself found that 900,000 of the 2.5 million applications for all forms of individual assistance were “potential duplicates.”

Even when FEMA’s automated computer system picked out what might be fraudulent applications, payments were at times still sent, says the testimony of Gregory Kutz, managing director of the GAO’s forensic audits unit.

The controls were so lax that auditors were able to secure their own $2,000 relief check by using “falsified identifies, bogus addresses and fabricated disaster stories,” and then simply waiting for the money to arrive in the mail, says the report for the Senate Homeland Security and Governmental Affairs Committee.

Testimony charged that much of the money disbursed by FEMA was inappropriately used – for such things as bail bonds, payment of prior traffic violations, driver’s license reinstatement, tattoos, massage parlors, alcoholic beverages, condoms, and adult erotica products.

Five dozen Web sites that either asked for money or sought to harvest personal
information for identity theft also have been shut down, the report said.

Thousands of additional dollars appear to have been squandered on hotel rooms
for evacuees that were paid at retail rather than the contractor's lower estimated cost. They included $438 rooms in New York City and beachfront condominiums in Panama City, Fla., at $375 a night, according to the audits.

Almost $900 million was spent by FEMA for 25,000 mobile homes, according to the testimony of the DHS Inspector General (IG), Richard Skinner. But, he said, only about 1,200 have been able to be occupied because they are not suitable for use on a floodplain. The rest are largely standing empty in Hope, Arkansas, where many are deteriorating and others are being cannibalized for parts.

The IG reported that contracts for debris removal, reconstruction and housing, were often hurriedly executed without competitive bids or only limited bidding. He testified that his office is continuing to investigate instances of overcharging and charging for work not performed.

The audits, which are not yet complete, do not try to estimate a total dollar figure on abuse, but GAO auditor Kutz told senators it was "certainly millions of dollars; it could be tens or hundreds of millions of dollars."

The Senate Committee also heard testimony from the Justice Department (DOJ), whose spokesperson said that federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes. Forty people have pleaded guilty so far. Many defendants were
accused of trying to obtain emergency aid, typically a $2,000 debit card, issued
to hurricane victims by FEMA and the American Red Cross.

In the Justice Department probe, the largest investigation centered on a Red
Cross call center in Bakersfield, Calif., in which some employees schemed to
steal the emergency money for themselves and others, prosecutors said. Fifty-three people have been charged in this probe.

In a separate but related development, a federal judge ruled Monday that the government could drop some 12,000 families made homeless by the hurricanes from a program that has put them up at hotels. They will receive housing grants instead.

This is a story that's not going away any time soon. Not until the Gulf Coast gets rebuilt -- or until the next hurricane season, whichever comes first. Meanwhile, we continue to wait for Presidential leadership.