FEMA Battered by Waste, Fraud

The national disaster response agency that mishandled the Hurricane Katrina catastrophe has for years been fraught with waste and fraud.

In five years, the Federal Emergency Management Agency poured at least $330 million into communities that were spared the devastating effects of fires, hurricanes, floods and tornadoes, an investigation by the South Florida Sun-Sentinel has found.

Taxpayers’ money meant to help victims recover from catastrophes has instead gone to people in communities that suffered little or no damage, including:

* $5.2 million to Los Angeles-area residents more than 25 miles from the 2003 wildfires for which help was designated.

* $168.5 million to Detroit residents for a 2000 rainstorm that the then-mayor doesn’t even remember.

* $21.6 million to Cleveland residents for clothing losses after a 2003 storm that brought less than 1 1/2 inches of rain.

Last year, the newspaper reported fraud and waste in federal disaster aid in Florida, when FEMA distributed $31 million in Hurricane Frances relief to Miami-Dade County residents who experienced no hurricane conditions.

U.S. senators and federal auditors, reacting to those reports, feared similar problems had occurred in FEMA-declared disasters throughout the United States.

The newspaper examined 20 of the 313 disasters declared by FEMA from 1999 through 2004, selecting cities where the agency’s inspectors said they had encountered large-scale fraud. Of the $1.2 billion FEMA paid in those disasters, 27% went to areas where official reports showed minor damage or none, the Sun-Sentinel found.

“It’s so disturbing because we have urgent needs to help individuals who truly are the victims of disasters,” Sen. Susan Collins (R-Maine) said. “I think it erodes public support for disaster assistance when there is a pattern of wasteful and abusive spending.”

As chairwoman of the Senate Homeland Security and Governmental Affairs Committee, Collins investigated FEMA’s Miami-Dade payments and is leading a congressional inquiry into the federal response to Katrina.

“Disaster assistance is provided at the specific request of a governor and we are constantly evaluating our programs,” FEMA spokeswoman Nicol D. Andrews said in an e-mail to the paper. “While always mindful of the generosity of the nation’s taxpayers, FEMA’s first priority remains the health and safety of disaster victims.”

In impoverished neighborhoods from California to the Carolinas, the newspaper found the same patterns. Residents call FEMA assistance “free money,” “easy money” and “mobility money.”

Scamming FEMA is widely known and openly discussed.

In Los Angeles after the 2003 wildfires in surrounding areas, smoke was the key. Tell FEMA that smoke ruined your TV, got in your clothes or spoiled the paint job on your car, residents said.

“All you’ve got to do is say something was damaged,” said Tasha Williams, a 26-year-old mother of three and tenant of Imperial Courts, a public housing development in Watts. “It’s free money.”

FEMA gave out checks, some for almost $9,000, to Los Angeles-area residents.

“If it had been our program and the same thing had occurred, I would have started an investigation, because clearly something went haywire,” said Dallas Jones, former director of the California Governor’s Office of Emergency Services. Now a consultant, Jones served as California’s coordinator for the wildfires, working with FEMA. He said he had expected less than $200,000 in FEMA claims in Los Angeles, not $5.2 million.

In Long Beach, many residents of a low-rent apartment building got money after one discovered the government would pay for furniture soiled by soot when windows were left open.

“The whole thing is a surprise to me,” said Mayor Beverly O’Neill of Long Beach, where 1,922 residents received $1.7 million from FEMA for the wildfires. “There were no fires in Long Beach.... Nobody said anything about this.”

In Cleveland’s recreation centers, barbershops and day-care centers, residents said people hauled old clothes and furniture into their basements and told FEMA the items were damaged by flooding from the 2003 storm. City officials documented 73 homes with minor damage, yet the federal government gave 28,500 Cleveland-area residents $41.4 million.

“We didn’t have much flooding in the city,” said Tom Marsalis, deputy commissioner of Cleveland’s Division of Water Pollution Control. “Basically, that was a normal storm for us.”

Julie Cobb, 37, whose southeast Cleveland neighborhood received $6.6 million from FEMA, said “everybody was talking about it on the bus.”

“All you had to do was tell FEMA stuff was ruined and they’d send you a check,” Cobb said. “If you had a little water in the basement, you could throw some stuff down there and get some money for it.”

In Baton Rouge, La., FEMA was a familiar and welcome sight long before the Louisiana capital was inundated with Katrina evacuees. In 2002, Hurricane Lili damaged small towns on the bayous but spared Baton Rouge, about 70 miles inland.

Yet FEMA gave $15.4 million to 13,714 parish residents in the Baton Rouge area.

On front porches and in grocery stores, word spread of a government handout that came without hassles.

“Oh, man, it’s easy,” Elias Chaney, 49, of Baton Rouge said neighbors told him. “Get you a new TV. Get your own sofa set. Ain’t no red tape.”

Baton Rouge residents told the Sun-Sentinel of neighbors ripping siding off their homes to fake storm damage and then repairing it after FEMA inspectors left. Chaney said he knew of people passing broken televisions from one applicant to another, each claiming the TV and telling the government it had been ruined by the storm.

In Michigan, a September 2000 storm flooded thousands of homes in the suburbs south of Detroit. State records in support of a presidential disaster declaration do not mention any problems within Detroit city limits, and local water officials reported no surge in complaints for flooding or sewer backups.

Then-Mayor Dennis Archer and other Detroit officials have trouble even remembering the storm. “Detroit sustained very little damage,” City Councilman Ken Cockrel said.

FEMA’s response -- $168.5 million to 87,624 Detroit residents -- turned into one of the “largest individual assistance declarations in U.S. history,” a Michigan state report noted.

After Hurricane Frances went through Florida last year, the storm pounded the mountains and foothills of western North Carolina with up to 17 inches of rain, washing out roads and bridges, wrecking homes and triggering mudslides.

Yet residents in six counties in the southeastern part of the state known as the Coastal Plain region -- 200 miles away -- received more than half of the $21 million FEMA awarded statewide.

“There was a lot of fraud,” said David L. Carter, emergency management director in Robeson County in southeastern North Carolina. “I’ll tell you, there was a lot of fraud.”

In Baton Rouge, Shawanda Williams called her $600 FEMA check for Lili “mobility money.”

“I went and got ... another house” to rent, said the 22-year-old personal care assistant.

FEMA aid covers only uninsured losses and tends to be most heavily concentrated in poorer communities, where it is often a windfall. Unlike other government programs such as food stamps, in which recipients get debit cards that can be used only for approved items, FEMA has traditionally handed out checks for up to $25,600.

FEMA determines the amount based on losses reported by applicants and approved by inspectors. Recipients are told to repair or replace items lost, but FEMA rarely follows up to see how the money was spent.

Chaney, of Baton Rouge, described FEMA as a blessing to poor people who struggle daily to buy food and pay their bills. “I guess some people saw an opportunity,” he said.

That opportunity has been known to FEMA for at least four years.

In testimony before Congress after he took over FEMA in 2001, Joe Allbaugh cautioned that federal disaster assistance had evolved into “an oversized entitlement program.”

Allbaugh’s successor, former FEMA director Michael D. Brown, denied any widespread problems, even after the U.S. Senate committee and federal auditors blasted his agency’s Hurricane Frances payments in Miami-Dade and 16 residents there were charged with fraud.

“It’s a pretty darn good track record,” Brown told CNN in July.

Under a barrage of criticism for his agency’s failings in its Katrina relief efforts, Brown resigned his post, having been relieved of his hurricane-related duties and sent back to Washington.

In response to demands by U.S. senators to fix problems uncovered in the Frances payments in Miami-Dade, FEMA announced changes in August to its aid program in a document called “Building on Success.”

Federal auditors are now in North Carolina investigating the Frances payments there.

Megan O’Matz, John Maines and Jon Burstein of the SunSentinel staff contributed to this report.