Hurricane Katrina funds attract bogus claims

By Rupert Cornwell

WASHINGTON - The money was supposed to go to victims of two of the most devastating storms of recent times.

In fact well over $1bn ($1.6bn) of government relief for hurricanes Katrina and Rita went for scams of every hue, paying for anything from luxury holidays and pricey sports tickets to divorce lawyers and a sex-change operation.

The catalogue of fraud was unveiled yesterday by the watchdog Government Accountability Office , in a report that is another damning indictment of Fema, the federal agency that handles disaster relief operations.

Fema's botched initial response to Katrina, which struck the Gulf coast in August 2005, was a low point of the Bush presidency.

It forced the resignation of its former director Michael Brown, previously praised by Mr Bush with the now immortal words: "Brownie, you're doing a heck of a job." The new report adds insult to injury.

In one instance, a man was put up for two months, courtesy of Fema, at a $100-a-night hotel in Hawaii, even though he never lived in the home that he claimed was hit by the storm, and was already claiming $2,300 in government rent assistance.

One ingenious fraudster secured an all-inclusive week-long holiday at a plush resort in the Dominican Republic, while another had the government pay for five season tickets to the New Orleans Saints of the NFL.

Among the most enterprising appear to have been prison inmates. More than 1,000 convicts used ­ or rather abused ­ the system to get money from Fema. One even had $20,000 paid into a PO box number. Another secured help by giving his home address as a New Orleans cemetery.

The swindles, the GAO said, arose mostly because the relief agency did not properly check the identity of applicants and the addresses submitted for properties which were said to be damaged. Of the missing $1bn, only $16m has been recovered.

Fema has answered such complaints by saying that its priority after disasters like Katrina was to make sure victims received help as fast as possible, and that under these circumstances some money inevitably would go astray. But the scale of the misspending has stunned everyone.

Michael McCaul, the Republican chairman of the House subcommittee looking into post-hurricane assistance, said the figures far exceeded his worst expectations.

"It's shocking and appalling, and an insult to the American taxpayer."

- INDEPENDENT

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