Bush Turned FEMA Into Political Payout Machine

by William Fisher

(IPS) NEW YORK -- As Michael Brown resigned his post as head of the Federal Emergency Management Agency (FEMA) Monday following a relentless beating in the press for his mismanagement of Hurricane Katrina relief and rescue efforts, details on FEMA's past missteps began emerging.

Possibly the most egregious of these largely under-reported fiascos was the revelation that FEMA made $31 million in questionable payments to residents of Florida's Miami-Dade County for damage from Hurricane Frances in September 2004, even though the storm caused only minimal damage in that area.

J. Robert Hunter, director of insurance for the Consumer Federation of America, who was a top federal flood-insurance official in the 1970s and 1980s, said that the Frances overpayments "are questionable given the timing of the election and Florida's importance" as a battleground state. Hunter was Texas insurance commissioner in the 1990s under then-Gov. Ann W. Richards, a Democrat.

Homeland Security sources said after the hurricane that Brown and his allies promoted him as a successor to Tom Ridge as Homeland Security secretary because of their contention that he helped deliver Florida to Bush by efficiently responding to the Florida hurricanes.

According to a report by the Department of Homeland Security's Inspector General (IG), more than eight million dollars was given to 4,300 people to rent temporary housing even though they had not asked for the money, and in many cases their homes were almost completely undamaged by the storm,

The inspector general's report was made public last May at a hearing of the Senate Homeland Security and Governmental Affairs Committee.

The Committee's chairperson, Sen. Susan Collins, a Maine Republican, said "FEMA paid to replace thousands of televisions, air conditioners, beds and other furniture, as well as a number of cars, without receipts, or proof of ownership or damage, and based solely on verbal statements by the residents, sometimes made in fleeting encounters at fast-food restaurants."

"It was a 'pay first, ask questions later' approach," Collins added.

She said, "The inspector general's report identifies a number of significant control weaknesses that create a potential for widespread fraud, erroneous payments and wasteful practices." Miami-Dade officials described the damage there from Hurricane Frances's heavy rain and winds of up to 45 mph as "minimal."

Brown defended his agency at the Senate hearing. He said FEMA mistakenly paid out only a handful of undeserving claims and made some other bureaucratic errors.

A college roommate of FEMA's previous director with little emergency preparedness experience, Brown was replaced last week by a Coast Guard officer to head the agency's role in directing the Katrina relief effort.

Commenting on FEMA's performance during Hurricane Katrina, Beau Grosscup, professor of international relations at California State University at Chico, told IPS, it was "another lesson in the class and political nature of Homeland Insecurity".

The Inspector General said his office started investigating the matter after the Sun-Sentinel newspaper in Fort Lauderdale published articles alleging that FEMA massively overpaid many Miami-Dade residents after Frances.

The IG said one case of overpayment involved $10 million that was used to replace household items in Miami-Dade partly because of a nationwide FEMA policy requiring that the replacement cost of a large bedroom suite be paid even though only a bed is damaged.

Homeland Security sources said at the time that FEMA's efforts to distribute funds quickly after Frances and three other hurricanes that hit the key political battleground state of Florida were undertaken with an eye on the upcoming 2004 presidential election.

The IG report said programme controls for the administration of FEMA funds needed to be tightened and that additional guidelines and criteria were needed to ensure the agency's overall effectiveness.

Some of the IG's other findings include:

• FEMA awarded 10.2 million dollars to repair or replace household room items for Miami-Dade County residents. However, the procedures used by FEMA to award funds for those items did not limit assistance to only disaster-related losses as required by federal law and regulations.
• FEMA awarded 720,403 dollars to 228 applicants for personal property items based upon the applicants' verbal representations of their losses.
• Contract inspectors were not required to validate how damages to automobiles were disaster-related. The amount authorised for automobile replacement, particularly for older vehicles, was generally far in excess of the market replacement costs or an amount needed to acquire comparable transportation.
• FEMA awarded $192,592 for miscellaneous items to applicants in Miami-Dade County based only upon the verification that such items were purchased -- not whether a disaster-related need existed.
• As of February 2005, FEMA awarded 13.1 million dollars to Miami-Dade applicants for rental assistance and home repair and replacement.
• FEMA provided 82,764 dollars in expedited assistance to 114 applicants who were not, or may not have been eligible. Those applicants reportedly had insurance, did not report a need for housing, or reported that their homes were not damaged.

Overall, more timely reviews of inspections might have prevented approximately $24.4 million of ineligible or excessive payments that FEMA has made throughout the United States and its territories from August 2004 to February 2005.

Meanwhile, Rep. Henry Waxman, the top Democrat on the House of Representatives Appropriations Committee, warned against authorising the government to raise the "micro-purchase" threshold from 15,000 to 250,000 dollars for purchases relating to relief and recovery from Hurricane Katrina.

In a letter to the committee chairman, California Republican Jerry Lewis, Waxman said, "Raising this threshold would mean that any federal employee with a government-issued credit card could buy up to a $250,000 in goods or services in a single purchase. There would be no limit to the number of such purchases."

"The federal response to Hurricane Katrina has been woefully inadequate to date. We should not now compound those problems by creating a situation which will inevitably lead to further waste, fraud, and abuse," he wrote.