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Saturday, October 22, 2005 - Page updated at 12:00 AM

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Fast outlay of FEMA aid draws scrutiny

South Florida Sun-Sentinel

With hundreds of thousands forced from homes battered by Hurricane Katrina, the federal government cut red tape to rush $2,000 checks and debit cards to help victims pay for clothes, food, transportation and a place to live.

The Federal Emergency Management Agency intended the aid for displaced Gulf Coast families and limited it to one payment per household.

But in three Louisiana parishes, FEMA issued more checks than there are households, at a cost to taxpayers of at least $70 million, a South Florida Sun-Sentinel investigation has found.

And in 36 parishes and counties in Louisiana, Mississippi and Alabama, FEMA awarded $102 million to at least 51,000 more applicants than local officials said were displaced by the storm.

The newspaper's findings are based on a review of $1.46 billion in FEMA claims paid through Sept. 22 and interviews with local officials from 54 counties and parishes.

Some of the same patterns of waste and fraud found after Florida's four hurricanes last year are occurring in the Gulf Coast states despite assurances by federal officials that steps have been taken to curb abuses.

Coaching for claims

In Mobile, Ala., residents coached each other on the right words to use when calling FEMA to get the $2,000. Many who received the money never had to leave their homes. Mobile Police Lt. Christon Dorsey, a member of a hurricane fraud task force, estimated fewer than 300 Mobile County residents were displaced and in need of emergency aid, not the 17,050 who collected $34.1 million.

In Pike County, Miss., Katrina displaced 25 families, yet 2,494 collected nearly $5 million and "made a ton of money," said Civil Defense Director Richard Coghlan.

"I'll tell you, it was Christmas," Coghlan said. "We're talking plasma TVs. We're talking stereos. We're talking bicycles."

In Louisiana's Iberville Parish, 70 miles from Katrina's landfall in New Orleans, the storm knocked down trees and power lines but caused no major damage, said emergency manager Laurie Doiron. Still, 819 parish residents received $1.6 million from the federal government.

"I can't possibly fathom 819 people needing $2,000 in immediate assistance," she said. "What do I attribute that to? FEMA being free with the money, too free with the money."

The Department of Homeland Security, which oversees FEMA, has established an Office for Hurricane Katrina Oversight and dispatched teams of auditors and investigators to "ensure disaster assistance funds are being spent wisely." So far, 14 people have been charged with fraud in connection with the $2,000 aid payments, according to the department. "We expect many more," said inspector general Richard Skinner.

FEMA began the $2,000 "expedited assistance" a week after Katrina devastated coastal Louisiana and Mississippi, and as the government faced criticism for its slow response.

"We are committed to cutting red tape and getting help to people who need it," said Homeland Security Secretary Michael Chertoff. "We are getting real assistance in record time."

FEMA waived its usual procedure of sending an inspector to an applicant's home to first verify damage. Instead, it approved payments based on a phone call or online application, which the agency said took 20 minutes.

Every four hours, FEMA sent information on those approved to the U.S. Department of Treasury, which then issued checks or deposited the money directly into the applicant's bank account. For two days, FEMA issued the $2,000 through debit cards to evacuees at Texas shelters.

"Severely impacted"

The aid was intended for those "severely impacted" by the storm who did not "have the usual means of identifying damage to their property or are unable to provide the immediate documentation necessary," a Sept. 7 FEMA news release said.

"Nearly $690 million in assistance helping ... families displaced by Katrina," the government announced three days later.

As the money flowed, local officials encountered confusion and anger by residents over why some got $2,000 and others didn't. FEMA did not answer the newspaper's questions about its criteria for awarding the money. One rule the government made clear: One payment per household.

Yet in Orleans Parish, ground zero for Katrina, FEMA gave $458 million to 224,008 applicants. That's 41,888 more than the estimate of households in the parish as of 2004, according to Claritas, a leading U.S. demographics research firm. The difference translates to $83.8 million.

In St. Bernard Parish, FEMA issued 3,929 more expedited payments than households — $7.9 million — and in Plaquemines Parish the difference was 1,876 payments, or $3.8 million.

Even after adding all those living in college dorms, nursing homes, military quarters and institutions, the number of recipients still exceeds possible applicants in the three parishes by nearly 35,000 — for a total of $69.9 million.

FEMA did not explain the discrepancy but in a statement said, "While the system may not have been perfect, if any have taken advantage of it by lying to FEMA in order to make an easy buck, we will work with the Hurricane Katrina Fraud Task Force to seek full prosecution." Throughout the Gulf Coast, emergency managers contacted by the newspaper said they believed many people took advantage of the money.

"My people suffered almost nothing," said Travis Prewitt, emergency manager in East Feliciana Parish, just north of Baton Rouge. "I didn't have a single structure, as far as I know, in the whole parish destroyed."

But 520 East Feliciana residents collected $1 million in expedited FEMA aid.

"It appears as though I've got about 520 cases of fraud," Prewitt said. "I did not have 520 individuals up here that suffered any losses."

FEMA issued $658,000 to 329 applicants in Scott County, Miss., where "we probably should have gotten about half that many," said Alvin Seaney, county civil defense director.

At least two farmers received money after they told FEMA that Katrina damaged their chicken coops. One planned to return the money.

"He got a check for $2,000 that said 'for temporary housing,' " Seaney said. "He didn't need a house for himself; he needed a house for the chickens."

Money went to undeserving applicants in Copiah County, Miss., including a friend of the emergency management director, Donald Weathersby.

She lost $36 worth of insulin when power went out, and collected $2,000 from FEMA, he said.

"We'll give her $36 for her medicine, and $50 for gas to go pick it up, but $2,000 is ridiculous," Weathersby said. "She doesn't even live in the house. She rents it. And the house had no damage."

At most, Katrina displaced 150 families in Hinds County, Miss., not the 5,756 who received $11.5 million in emergency assistance, said Emergency Management Director Larry Fisher.

Raising an alarm

He said he warned a FEMA official briefing the Jackson City Council in mid September about residents exaggerating claims.

"I told him, 'I don't know what your criteria is, but we do not have that many people drastically impacted or not able to stay in their homes by any means,' " Fisher said. "He told me ... these claims had been filed and would be verified. My concern was I had not been called, nor any of my staff, to verify any damage."

All Harold Miller Jr. had to do to collect the $2,000 was tell FEMA he lived in Baton Rouge in a home damaged by the storm, federal prosecutors say. Miller actually lived and worked in Portland, Ore., where he has been charged with fraud. The U.S. Attorney's Office in Portland is investigating others there who may have fraudulently obtained expedited aid from FEMA.

FEMA made "no effort before disbursing the money to verify anything," said Lance Caldwell, the federal prosecutor in Miller's case. "As far as I'm concerned, there may have been considerable losses to the government because of this type of fraud."

Across the country, authorities have arrested people who collected FEMA payments using false addresses, including a north Florida couple who claimed they lost homes in Slidell, La., and then spent some of their $4,000 on cocaine, according to the U.S. Attorney's Office in western Louisiana.

Two inmates at the Avoyelles Women's Correctional Center in Cottonport, La., are under investigation for claiming to be Katrina victims in applications to FEMA.

Jailhouse workers intercepted their FEMA checks.

Some local officials said FEMA may have been motivated to counter earlier criticism. In the days immediately after the storm, the government was repeatedly accused of abandoning victims and waiting too long to send in troops and supplies.

"I suspect after the bad publicity that they just started throwing money out," said Ronnie Hughes, president of Ascension, La. Parish, where 1,552 residents collected $3.1 million. "We did not have 1,500 families displaced in Ascension Parish, I can tell you that."

Copyright © 2005 The Seattle Times Company

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