Thread: Officials say their efforts to stem FEMA fraud ignored

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Officials say their efforts to stem FEMA fraud ignored
By Megan O'Matz
South Florida Sun-Sentinel

September 19, 2005

In recent years, public officials have sounded the alarm about fraud in federal disaster aid. They were largely ignored.

In Bladen County, N.C., an elected commissioner has tried for months to stop the state from sending money to county residents who had already pocketed millions from the Federal Emergency Management Agency. She's still trying.

In Wilmington, N.C., the head of the public-housing authority alerted federal investigators to false claims from tenants collecting aid for a hurricane that he knew caused no damage. Privacy rules, he was told, prevented him from learning more about the payouts.

And in Mobile, Ala., the county's top emergency-management official warned FEMA that people reportedly were intentionally damaging their homes to feign damage from tornadoes and flooding that never occurred. The checks kept coming.

Delilah Blanks calls it pork-barrel spending.

"It's the power of politics," the Bladen County commissioner said.

Blanks took the unusual step last spring of objecting to a state plan to funnel "crisis housing" assistance to the county for Hurricane Frances. Remnants of the 2004 storm caused horrendous flooding in western North Carolina. But one half of Bladen County received, at most, 4 inches of rain, and the other half less than 1 inch, according to the National Weather Service.

Still, FEMA awarded $2.7 million to 1,220 Bladen County recipients, records show.

Learning at the commission's April 18 meeting that the state wanted to give still more money, Blanks moved to deny the aid. During the discussion, the county emergency-management director "advised that there was no damage in Bladen County due to the storms of 2004," meeting minutes state.

Blanks told her colleagues the state housing funds should go to needy people in the western portion of the state.

Her motion was approved, 7-2.

"There's no damage in this county," Blanks said recently. "I don't know why the state keeps wanting to send the money here. . . . The money ought to go where the damage is."

Another North Carolina official, Benjamin J. Quattlebaum II, raised concerns in 2003 about the misuse of disaster aid.

The head of the Wilmington Housing Authority, Quattlebaum wrote to FEMA's inspector general after Hurricane Isabel that year, expressing concern that tenants were getting money when the authority knew of no damage to its buildings.

"Since we are the landlord for over 1,400 public housing units, we are concerned that 'the system' not be abused and that if our residents did indeed suffer damage, why we are not aware of that damage," he wrote.

Quattlebaum asked for the identities of the tenants who submitted claims, but FEMA denied the request, citing confidentiality rules.

In Alabama, the cry for help went straight to the top.

"Something is wrong in Mobile," came the written alert from an emergency manager to then-FEMA Director Michael Brown.

Though the county got 6 inches of rain on May 18, 2003, damage was minimal, wrote Paulette Williams, then the director of the Mobile County Emergency Management Agency. Ultimately, 16,609 county residents collected $29.5 million from FEMA, records show.

"I know disasters, and Mobile didn't have a disaster of this magnitude," Williams wrote in February 2004, complaining that she had raised concerns repeatedly with state and federal officials and had been waiting several months to "hear of some resolution or at least some action or investigation."

Allegations of fraud, she said in an interview, kept coming into her office of people intentionally defacing their homes, including shaking up Coca-Cola bottles and spraying the contents onto walls.

"We had reports of people removing their furniture from their dwellings and putting old furniture back in," she said.

FEMA eventually sent an inspection team back to Mobile to review a portion of the claims.

Though Williams also alerted the U.S. Attorney's Office in Mobile and a U.S. senator, she knew of no arrests or recouped funds.

"I felt for awhile I was totally being ignored," she told the newspaper. "I just kept pursuing it. My concern was I didn't want to create a big issue. I just wanted the problem solved."

www.orlandosentinel.com

Undue FEMA aid benefits everyone -- but taxpayers
By Megan O'Matz, Sally Kestin, John Maines and Jon Burstein
South Florida Sun-sentinel

September 19, 2005

Assistance designed to help those struck by disaster has become a tool for politicians to bring home prized federal dollars and a windfall to residents in some of the nation's poorest communities.

In between are privately contracted damage inspectors with little incentive to safeguard the public purse.

The system is fueled by an unlimited budget: If the money runs out, the Federal Emergency Management Agency returns to Congress for more.

Everyone benefits, a South Florida Sun-Sentinel investigation found, except taxpayers footing the bill.

In the name of helping disaster victims, FEMA during five years awarded at least $330 million in areas with little or no damage, the newspaper found. Though aid has legitimately flowed to thousands of people who lost their homes or belongings to fires, floods and hurricanes, thousands more have abused the system.

"It's an absolute abomination," said U.S. Rep. Mark Foley, R-Jupiter. "Whether intentional corruption or mismanagement . . . it seems like FEMA is just a money pit."

Outrage about $31 million paid to residents of Miami-Dade last year for a hurricane that missed the county called national attention to fraud and waste in FEMA assistance. But the problem has evolved over years in cities throughout the country, the newspaper found.

It all starts with the federal disaster declaration, the first step to start the money flowing -- a process heavily influenced by politics.

Once disaster strikes, however small, politicians from mayors to governors to members of Congress pressure FEMA for a declaration and then boast about bringing money home.

By law, federal aid is meant for major disasters that overwhelm state and local governments. Officials are supposed to prove a need for help through "damage assessments," the backbone of formal requests from governors to the president.

But the Sun-Sentinel found those assessments are not always done. Even when they are, they're sometimes not an accurate reflection of reality.

Declarations often include areas much broader than the disaster -- "contiguous counties" included only because they are next to a stricken area -- and entire counties for damage confined to a few blocks.

After a tornado in Miami-Dade County in March 2003, some nonprofit agencies and the county's public-housing agency concentrated their assistance in the 1.5-square-mile area affected. But FEMA declared the whole county a disaster and awarded most of the aid, $9 million, to people outside the damage area.

Once a declaration is made, anyone in that area can apply, and FEMA does little to verify the legitimacy of the claims, the newspaper found. In disasters reviewed by the Sun-Sentinel, FEMA officials never consulted meteorologists or local officials most familiar with damage in their communities before approving claims.

"I would have told them there was no damage," said Ed Broomfield of the Los Angeles County Office of Emergency Management.

The county was included in a declaration for wildfires that raged through Southern California in 2003. The fires never burned in the city of Los Angeles or nearby areas, yet FEMA awarded $5.2 million to 5,240 applicants there.

Because FEMA assistance is restricted to those with losses not covered by insurance or with no insurance at all, most of the money winds up in the poorest communities.

From Miami to Baton Rouge to Cleveland, word spreads when FEMA is in town. Some inner-city residents call the assistance "free money" and have learned from disaster to disaster how to file claims even if they suffered no damage, the Sun-Sentinel found.

Katherine Williams and other tenants of Nickerson Gardens, a public-housing development in the Watts section of Los Angeles, said they thought they deserved money for the 2003 wildfires just as much as people in "big houses" in the hills where the blazes burned. Though miles from the fires, they said smoke got into their clothes and furniture, and ash damaged the paint on cars.

"We're a struggling people," said Williams, a 54-year-old nursing assistant. "Whenever we lose something, it's hard to get it back."

Williams said FEMA turned down her claim, but she knew of neighbors collecting money.

The job of deciding whether claims are valid falls to FEMA inspectors assigned to visit applicants' homes. FEMA refers to the inspectors, who work for private companies under contract with the government, as their "first line of accountability" against fraud.

They get paid for each inspection completed, regardless of whether the claim is approved, and have little incentive to safeguard tax dollars.

After last year's hurricanes in Florida, FEMA relied on hundreds of novice inspectors, each with only a few hours of training. Their error rate was more than three times higher than that for experienced inspectors, a U.S. Senate investigation revealed in May.

For years, inspectors have signed off on dubious claims in areas on the fringes of disasters.

Current and former inspectors told the Sun-Sentinel that they are often sent to poorly kept homes and apartments that leak in any hard rain. FEMA isn't supposed to pay for damage that is a result of "deferred maintenance," but the agency has instructed inspectors to take applicants' word when they insist losses were caused by a disaster.

After Hurricane Isabel in 2003, Eddie King, emergency manager in Pender County, N.C., recalled "a lengthy discussion" with a FEMA inspector who argued zealously that a fire that destroyed a woman's mobile home was hurricane-related.

King, who was also the county fire marshal at the time, attributed the blaze to faulty electrical wiring in the kitchen.

"I'm, like, 'Sir, it occurred 24 or 36 hours before any hurricane-force winds ever reached Pender County!' " King said.

Once the inspection is complete, the results are sent by computer to FEMA. If eligible losses are recorded, the applicant gets a check.

Few of the claims are scrutinized. FEMA requires a "quality-control review" of only 3 percent of inspections but has left it largely up to the contracted companies to check their inspectors' work. During the past three years, those reviews revealed errors as high as 90 percent, records obtained by the newspaper show.

A complex system made up of many moving parts, the disaster-assistance program rarely stops once it kicks in, the newspaper found. Officials in several states have gone so far as to write FEMA with concerns of widespread fraud but have been unable to stop the money.

In Miami-Dade, FEMA's own community-relations teams left the county after only two days last fall because they could find no damage from Hurricane Frances, records show. Yet the money continued pouring into the county for months, even after complaints from the public and Congress.

All the while, FEMA officials denied any major problems. A Senate committee investigating the Miami-Dade Frances payments "exposed fraudulent claims, wasteful spending and ineffective government management in FEMA's response to the 2004 Florida hurricanes."

Then-Director Michael Brown responded by thanking senators for their input on FEMA's "successful response and recovery efforts" to the hurricanes.

Last Monday, Brown resigned amid criticism about his agency's slow response to Hurricane Katrina.

Sharlot Edwards, emergency-preparedness director in Louisiana's West Baton Rouge Parish, just wanted FEMA to explain where the alleged damage was after Hurricane Lili in 2002. Parish residents collected $1 million from FEMA.

"I was totally shocked when I saw the figure," Edwards said. "I really was, for the simple fact that we weren't aware that there was much damage in our parish."

FEMA informed Edwards that it could not share any information because of privacy laws.

"I tried to get them to tell me at least the areas that the damage was in so we'd know where to start looking and doing preventive measures," she said. "They informed me they couldn't do that."

Why?

"I don't know," Edwards said. "They said they couldn't tell me."

www.latimes.com

KATRINA'S AFTERMATH
FEMA Battered by Waste, Fraud
After some recent disasters, money poured into areas that suffered little or no damage.
By Sally Kestin
South Florida Sun-Sentinel

September 18, 2005

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 â€â€