Investigations have revealed the Bush Administration wasted more than $2 billion of the money allocated for Katrina, the Associated Press reports toda
December 24, 2006

Investigations have revealed the Bush Administration wasted more than $2 billion of the money allocated for Katrina, the Associated Press reports today. Much of this waste is the result of lucrative contracts awarded with little or no competition. Hope Yen of the AP writes,

Federal investigators have already determined the Bush administration squandered $1 billion on fraudulent disaster aid to individuals after the 2005 storm. Now they are shifting their attention to the multimillion dollar contracts to politically connected firms that critics have long said are a prime area for abuse.
In January, investigators will release the first of several audits examining more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.

Democrats in Congress are vowing closer oversight of the Katrina reconstruction debacle. Let's hope.

However, today's news isn't exactly news. Last August the House Committee on Government Reform Minority Office (that means Democrats) released a report titled “Waste, Fraud, and Abuse in Hurricane Katrina Contracts.” Here are key findings from a press release:

* Full and Open Competition is the Exception, Not the Rule. As of June 30, 2006, over $10.6 billion has been awarded to private contractors for Gulf Coast recovery and reconstruction. Nearly all of this amount ($10.1 billion) was awarded in 1,237 contracts valued at $500,000 or more. Only 30% of these contracts were awarded with full and open competition.

* Contract Mismanagement Is Widespread. Hurricane Katrina contracts have been accompanied by pervasive mismanagement. Mistakes were made in virtually every step of the contracting process: from pre-contract planning through contract award and oversight. Compounding this problem, there were not enough trained contract officials to oversee contract spending in the Gulf Coast.

* The Costs to the Taxpayer Are Enormous. This report identifies 19 Katrina contracts collectively worth $8.75 billion that have been plagued by waste, fraud, abuse, or mismanagement. In the case of each of these 19 contracts, reports from the Government Accountability Office, Pentagon auditors, agency inspectors general, or other government investigators have linked the contracts to major problems in administration or performance.

On those rare occasions President Bush speaks publicly about Katrina cleanup, he makes noises about "partnerships" between state and local government and how he wants "local folks" to decide how the work should be done. But the truth is that the feds began handing out big no-bid contracts while floodwater still covered the streets of New Orleans, and "local folks" weren't asked to provide input. And time and time again, local and minority-owned companies were passed over in favor of bigger, far-away firms with connections to Republicans in Washington.

Last month, a federal judge found that the Bush Administration unconstitutionally denied aid to tens of thousands of Gulf Coast residents displaced by hurricanes Katrina and Rita. FEMA was ordered to resume payments immediately. Says something about priorities, don't you think?


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