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Susan Collins

The False Choice Between Waste and Wise Use of Taxpayer Dollars
By Senator Susan Collins
Jun 16, 2006 - 11:42:00 AM

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Senator Susan M. Collins represents the State of Maine in the U.S. Senate.
Three weeks into a new hurricane season, thousands upon thousands of victims of Hurricanes Katrina and Rita are still trying to rebuild their lives, which were shattered by the worst natural disaster in our nation's history. Entire neighborhoods remain in shambles, families are still without their homes, many businesses have not been able to reopen, and debris remains scattered through many areas in the Gulf Coast.

But despite the significant resources--state, local, and federal-- that have been devoted to helping the Gulf Coast region recover and rebuild, there is still a great deal to be done.

That it why it is so disturbing that ten months after Hurricanes Katrina and Rita, we are still learning about blatant cases of waste, fraud, and abuse of taxpayer dollars that are so badly needed for continuing recovery efforts.

The Government Accountability Office (GAO) has released a report that I requested on the misuse and fraud in FEMA's emergency assistance programs. The report builds upon work that the GAO did for the Senate Homeland Security Committee, which I chair, as part of the Hurricane Katrina investigation that was conducted by the Committee.

The findings of this most recent report are extraordinarily troubling and astounding. The GAO estimates that nearly $1 billion was wasted on fraudulent and improper payments. And FEMA lacks even the most basic safeguards to protect taxpayer dollars.

The report found that some individuals who did not suffer losses from hurricanes Katrina or Rita, including some people who did not even live in the affected area, were able to get away with using bogus information, such as phony Social Security numbers and fake addresses, to collect emergency assistance payments of $2,000. More disturbing is that the GAO uncovered many cases where people used the identities of state and federal prisoners to collect payments. In at least one case, a check was actually sent to an inmate in his jail cell who had applied for assistance from within the prison walls. The report estimates that more than $12 million was sent to over 2,000 individuals who either used the identities of prison inmates or were inmates themselves.

Some of these people were able to use the same bogus information to collect further assistance, such as hotel assistance and rental assistance. And unbelievably, some people collected both at the same time. For example, the GAO learned of one individual stayed at an expensive hotel in Honolulu, Hawaii, which also raises additional and obvious questions, at a cost to taxpayers of $8,000, while at the same time collecting rental assistance totaling $2,358. Another person stayed at a resort in Orlando, Florida, to the tune of $12,000 while also collecting $4,386 in rental assistance.

In far too many cases, FEMA also failed to verify the addresses of those who claimed to have been victims of the hurricanes and eligible for assistance. The GAO found :

  • 44 payments totaling $183,562 that were sent to a single apartment.
  • One individual who received 26 payments totaling $139,000 by using 13 different Social Security numbers and never lived in any of the addresses that he claimed were damaged by the Hurricanes.
  • Individuals who used the address of the Greenwood Cemetery in New Orleans to receive $2,358, while another used the address of a different cemetery to receive $2,000.

The FEMA debit card program was also plagued by poor oversight, fraud, and abuse. After Hurricane Katrina, FEMA implemented a program that enabled some hurricane victims to obtain $2,000 emergency assistance payments on a debit card to be used to purchase essential goods such as food and clothing. But FEMA's lack of accountability resulted in the loss of 750 debit cards valued at $1.5 million. Equally disturbing is the manner in which some of these cards were spent on goods and services. For example, GAO found that:

  • $3,700 was spent on diamond jewelry and watches using debit cards.
  • $2,100 was spent on an all-inclusive Caribbean vacation, and
  • $2,000 was used to purchase five New Orleans Saints football season tickets.

Sadly, these egregious examples of misuse and abuse of taxpayer dollars are far too prevalent. When the challenges and needs of hurricane victims are still so great, it is unacceptable that we are still learning of so many cases of inexcusable waste.

It is a false choice to say that FEMA must decide between quickly providing assistance to victims in need and spending taxpayer dollars wisely. With adequate safeguards in place, some as simple as verifying addresses of registrants or cross-checking names to ensure that people are not collecting duplicative payments, FEMA could make a great deal of progress toward ensuring that taxpayer dollars are spent more wisely. The $1 billion that was wasted on fraudulent and improper payments would have gone a long way toward helping to rebuild a devastated region.

The American people are very generous and willing to lend a helping hand to those in need. After Hurricanes Katrina and Rita, Americans did what they always do in times of crisis: they opened their hearts, their wallets, and, in many cases, even their homes. In return, they expect that this assistance will be free of waste, fraud, and abuse.

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