Category 4 fraud

MOVE OVER, RECKLESS CONSUMERS. The Federal Emergency Management Agency has outdone your irresponsible spending by racking up a debit card bill so outrageous it could have been created using Mad Libs. Sex-change operations, vacations to the Dominican Republic and wild nights at strip clubs were all bought on the government’s dime by both con artists and legitimate victims of Hurricane Katrina. But try to keep that knee from jerking -- although FEMA’s oversight was lacking, wasted money is an inevitable byproduct of providing rapid emergency assistance.

The tawdry expenses are listed in a report released Wednesday by the Government Accountability Office. Though the headline makers were select items purchased with debit cards that FEMA gave out immediately after Katrina struck, the centerpiece of the survey was an estimate that about 16% of the agency’s more than $6 billion in overall hurricane relief payments were improper and potentially fraudulent. And that figure is probably on the low side because it only accounts for certain categories of fraud, such as misrepresentation of identity and duplicate payments.

Some misuse of the FEMA-issued debit cards, however, is hardly shocking. The aim of the $2,000 cards was to give individuals immediate aid to be spent according to his or her judgment, rather than earmarking items that the government guessed would be of greatest assistance. For every “Girls Gone Wild” video purchased, thousands of families used their cards for clothing, food and temporary shelter without having to deal with federal red tape. Bad spending decisions are an unfortunate side effect of a clever and responsive policy.

The 16% of improper expenditures is indeed high for a federal aid program -- food stamps and unemployment insurance, by comparison, had respective rates of 5.9% and 10.1% last fiscal year. But these are established programs, not on-the-fly responses that had to process a sudden rush of 2.6 million claims. Unlike a permanent safety net, disaster relief’s top priority is to help as many people as fast as possible, which comes at the price of reduced efficiency.


But just because FEMA faced a daunting task does not mean it should be given a pass for its sloppy oversight. The GAO cited several quick fixes that should be put into effect immediately, most notably simple tests for misrepresentation when citizens register for federal disaster assistance. FEMA’s response thus far -- cutting expedited payments to $500 -- misses the point and will undercut relief efforts in future catastrophes.

It’s easy, and necessary, to criticize FEMA’s across-the-board incompetence in responding to the largest displacement of Americans since the Civil War. But obsessing about the spending habits of refugees comes perilously close to blaming the victim.