Widespread fraud marred Katrina relief efforts, audit says

RAW STORY
Published: February 13, 2006

Waste and fraud marked the federal government's assistance programs for Hurricane Katrina victims, with 10,000 mobile homes going unused and scattered cases of evacuees spending emergency funds on nude dancing in Houston, tattoos, casino gambling and a diamond engagement ring, according to an audit released Monday, the HOUSTON CHRONICLE will report. Excerpts:

About 5,000 of the 11,000 people who got $2,000 debit cards from the Federal Emergency Management Agency, at Reliant Center and the George R. Brown Convention Center in Houston and two other shelters in Texas, incorrectly got additional $2,000 credits after applying by telephone or the internet, according to government findings.

But losses from misspent debit funds _ the list of purchases also included alcoholic beverages, so-called adult erotica, condoms and a $1,300 pistol _ were peanuts compared to the amount of money FEMA wasted on contracts and housing payments, according to a report by the Department of Homeland Security's inspector general, Richard Skinner.

FEMA signed contracts worth more than $9.2 billion for hurricane relief, and experts who testified at a Senate hearing Monday said it was impossible at this time to estimate how much had been wasted or stolen.

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