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Investigations into Katrina Waste and Fraud Detailed

January 12, 2006 


A new report sheds light on efforts of Inspectors General to oversee spending for major hurricanes Katrina, Rita, and Wilma.  The report, which was first reported on by the Associated Press yesterday is here.

Titled the "90-Day Progress Report to Congress," the 141-page report details the actions of 21 federal agencies that are overseeing taxpayer dollars and programs awarded after hurricanes Katrina, Rita, and Wilma ravaged the U.S. coastline from Florida to Texas.  More than 4,700 contracts have been awarded, totaling more than $8.1 billion of the $62.3 billion approved by Congress and the President.

The report provides a listing of all final, ongoing, and planned audits and investigations that have been conducted by Homeland Security, Defense, Energy, and Labor among other federal agencies.

Up to this point, the President's Council has released data listing oversight staff, total contracts, total contract awards, government credit card spending, arrests, indictments, and convictions (see

"Some of the audit findings confirm our worst fears -- agencies were ill-prepared to meet the country's contracting needs," said Scott Amey, General Counsel of POGO. "These audits ensure that contractors did not exploit mistakes that may have been made in the chaotic rush following the hurricanes."

The President's Council report highlights the following:

  • FEMA had "obligated $2.7 million more than was estimated by the applicant."
  • VA was performing on an "unexecuted $28.4 million interagency housing agreement."
  • A "contractor improperly altered the delivery and placement of trailers to give preferential treatment to a private business."
  • A food and lodging contractor had received $4.9 million "for work performed before the contract's effective date; the billings included mathematical errors overcharging by more than $3 million."
  • A no-bid "debris monitoring contract estimated at $4 million was found to be noncompliant with federal regulations and subject to non-reimbursement by FEMA unless corrected."
  • A review of "$23 million of purchase card activities."
  • Forthcoming audits will look at nearly $600 million in disaster grant funds and the use of Blackwater Security Consulting to provide armed guard services to protect impacted areas.

DoD audits have investigated ice delivery, debris removal, levee repair, blue roof, and cruise ship contracts, the sole-source contract awarded to the Lipsey Mountain Spring Water Company, and government credit card transactions.

DOJ will review $8.4 million in government purchase card transactions.

DOT is reviewing a $300 million FAA transportation services contract awarded to Landstar Express America and the reasonableness of a $47 million contract for bus service in New Orleans and Baton Rouge.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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