Hurricane "Victims" Live It Up at Taxpayers’ Expense

Government Accountability Office officials are testifying Wednesday before a House committee to reveal shocking and disturbing results of their audit of post-hurricane aid delivered by FEMA. Rep. Michael McCaul, chairman of the subcommittee overseeing the audit, said that the fraudulent expenditures charged by thousands of so-called "victims" of last year’s hurricanes at the expense of the government were "an assault on the American taxpayer."

In the wake of the devastation caused by Hurricanes Katrina and Rita, FEMA handed out nearly 1000 debit cards with millions of dollars to help people get back on their feet. But after handing out the cards, the government apparently did little or nothing to track how those cards were used. In some cases, multiple cards were sent to the same person or to people who weren’t even affected by the hurricanes. "Our forensic audit and investigative work showed that improper and potentially fraudulent payments occurred mainly because FEMA did not validate the identity of the registrant, the physical location of the damaged address, and ownership and occupancy of all registrants at the time of registration," GAO officials said.

The fraudulent activities uncovered by the investigation are outrageous, and they further compound the intense criticism already being directed toward FEMA’s response to the disasters. Some of the most shocking incidents include the agency paying for five season football tickets to New Orleans Saints games, an all-inclusive weeklong Caribbean vacation, Dom Perignon champagne, adult erotica products, "Girls Gone Wild" sex videos, divorces, and even a sex change operation.

The audit found that people lodged in hotels often were paid twice, because FEMA gave them rental assistance directly while they were also paying the hotels. In one case, FEMA paid $8000 to hotels in California to house one person—who also received three rental assistance payments for both disasters. FEMA paid another person $2,358 in rental assistance while also paying about $8,000 for that person to stay in a $100 per night hotel room in Hawaii for 70 nights. Millions of dollars were paid to more than 1,000 people who used names and Social Security numbers belonging to state and federal prison inmates in Louisiana, Texas, Alabama, Mississippi, Georgia, and Florida. One person used 13 different Social Security numbers, including his own, to receive $139,000 in payments, all of which were sent to a single address.

FEMA says that it has identified nearly $17 million in improperly awarded disaster relief money, and has referred more than 1,500 cases of potential fraud to the Homeland Security Department. The GAO, however, says that it is 95% sure the improper payments were much higher—between $600 million and $1.4 billion.

Aaron Walker, a FEMA spokesman, said that during a disaster the agency makes its highest priority "to get help quickly to those in desperate need of our assistance." So in their rush to offer assistance, they apparently just handed out money hand over fist without checking to be sure the recipients actually were in desperate need. Some of the people who received money included a person using a New Orleans cemetery for his home address, and people who provided a post office box as their damaged address, including one person who received $2,748 using an Alabama post office box as the damaged property. In fact, FEMA paid out over $5 million to people who provided a post office box as their damaged residence. Some money was paid out even after FEMA learned that applicants did not live at the addresses they provided.

"Even as we put victims first, we take very seriously our responsibility to be outstanding stewards of taxpayer dollars, and we are careful to make sure that funds are distributed appropriately," Walker said.