WASHINGTON -- The Federal Emergency Management Agency was hoodwinked to pay for season football tickets, a tropical vacation and a sex change operation, an audit of Hurricanes Katrina and Rita aid found.
Houston divorce lawyer Mark Lipkin says he
can't recall anyone paying for his services with a FEMA debit card,
but congressional investigators say one of his clients did just
that.
That $1,000 payment was just one example cited in an audit that concluded that up to $1.4 billion -- perhaps as much as 16 percent of the billions of dollars in assistance expended after those two hurricanes in 2005 -- was spent for bogus reasons.
Prison inmates, a supposed victim who used a New Orleans cemetery for a home address and a person who spent 70 days at a Hawaiian hotel all were able to get taxpayer help, according to evidence that gives a new black eye to
the nation's disaster relief agency.
"I do Katrina victims all the time," Lipkin, the divorce
attorney, told The Associated Press. "I didn't know anybody did
that with me. I don't think it's right, obviously."
Government Accountability Office officials were testifying
before a House committee Wednesday on their findings.
Donna Dannels, acting deputy director of recovery for the
Federal Emergency Management Agency, told a House hearing the
congressional conclusions "represent a fraction of the overall
assistance provided."
Rep. Michael McCaul, R-Texas, chairman of the subcommittee
overseeing an investigation of post-hurricane aid, called the bogus
spending "an assault on the American taxpayer."
"Prosecutors from the federal level down should be looking at
prosecuting these crimes and putting the criminals who committed
them in jail for a long time," he said.
FEMA also could not establish that 750 debit cards worth $1.5
million even went to Katrina victims, the auditors said.
Among the items purchased with the cards:
• An all-inclusive, one-week Caribbean vacation in the Punta Cana
resort in the Dominican Republic.
• Five season tickets to New Orleans Saints professional football
games.
• Adult erotica products in Houston and "Girls Gone Wild"
videos in Santa Monica, Calif.
• Dom Perignon champagne and other alcoholic beverages in San
Antonio.
To dramatize the problem, investigators provided lawmakers with
a copy of a $2,358 U.S. Treasury check for rental assistance that
an undercover agent received using a bogus address. The money was
paid even after FEMA learned from its inspector that the undercover
applicant did not live at the address.
FEMA spokesman Aaron Walker said Tuesday that the agency,
already criticized for a poor response to Katrina, makes its
highest priority during a disaster "to get help quickly to those
in desperate need of our assistance."
"Even as we put victims first, we take very seriously our
responsibility to be outstanding stewards of taxpayer dollars, and
we are careful to make sure that funds are distributed
appropriately," Walker said.
FEMA said it has identified more than 1,500 cases of potential
fraud after Katrina and Rita and has referred those cases to the
Homeland Security Department's inspector general. The agency said
it has identified $16.8 million in improperly awarded disaster
relief money and has started efforts to collect the money.
The GAO said it was 95 percent confident that improper and
potentially fraudulent payments were much higher -- between $600
million and $1.4 billion.
The investigative agency said it found people lodged in hotels
often were paid twice, since FEMA gave them individual rental
assistance and paid hotels directly. FEMA paid California hotels
$8,000 to house one individual -- the same person who received three
rental assistance payments for both disasters.
In another instance, FEMA paid an individual $2,358 in rental
assistance, while at the same time paying about $8,000 for the same
person to stay 70 nights at more than $100 per night in a Hawaii
hotel.
"Our forensic audit and investigative work showed that improper
and potentially fraudulent payments occurred mainly because FEMA
did not validate the identity of the registrant, the physical
location of the damaged address, and ownership and occupancy of all
registrants at the time of registration," GAO officials said.
FEMA paid millions of dollars to more than 1,000 registrants who
used names and Social Security numbers belonging to state and
federal prisoners for expedited housing assistance. The inmates
were in Louisiana, Texas, Alabama, Mississippi, Georgia and
Florida.
FEMA made about $5.3 million in payments to registrants who
provided a post office box as their damaged residence, including
one who got $2,748 for listing an Alabama post office box as the
damaged property.
The GAO told of an individual who used 13 different Social
Security numbers -- including the person's own -- to receive $139,000
in payments on 13 separate registrations for aid. All the payments
were sent to a single address.