FEMA to recover "undeserved" Katrina Aid

After receiving round criticism for its poor judgment and execution of relief efforts relating to the Katrina hurricane disaster, FEMA again displays judgment that suggests that whoever may be heading the agency has not gotten wiser with time and experience. GAO audits revealed sloppy management in delivery of relief funds to those impacted by the disaster. While acknowledging the importance of getting the aid out to needy households [after a loud public and Congressional protest over inaction], GAO suggested that some fraud prevention controls could and should have been put in place. The amount of money that was given out to households or persons who were possibly undeserving could have been as much as $100 million. This sounds like a typical report from an independent auditor.

What is noteworthy is the subsequent determination by FEMA to go after and spend substantial funds to prosecute individuals who may have received as much as $2000 in aid that may have been undeserved or overpaid [because of duplicate payments by FEMA]. No one suggests that the misapplication or misuse of government funds is not an issue of concern.

The public policy implication of using government resources to prosecute poor individuals who received small payments as a result of a frantic and disorganized push to deliver aid in a disaster situation is telling. We have seen documentation of deliberate and fraudulent overcharges by Halliburton and its subsidiaries for no-bid contract services in Iraq and relating to the Katrina relief. We see reports of "contractors" handing out truckloads of funds without records, monitoring or audit controls in Iraq that amounted to millions of dollars. Little has been done to prosecute Halliburton or to recover the funds obtained by fraud and overcharging. The excuse for not prosecuting contractors for handing out or diverting funds for which no services or justification has been received is that the situation was emergent or chaotic and it was unclear who was in charge. What is not evident is how that excuse differs from the circumstances under which Katrina aid was delivered. Moreover, a single prosecution of Brown & Root could yield 100 to 10,000 times the recovery that prosecution of a Katrina aid recipient might yield.

There is an old cynical cliche in Black neighborhoods, that if you are Black and poor and steal a loaf of bread - you will go to jail for years; but if you are white and rich and steal a million dollars - you will get a promotion or another contract. Perhaps the Bush administration has heard the cliche and adopted it as its domestic policy.