March 18, 2006
In Louisiana, Graft Inquiries Are Increasing
By LESLIE EATON,

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KENNER, La. Long before this suburb west of New Orleans was shaken by Hurricane Katrina, it was notorious for its fierce political infighting, for name-calling and mudslinging, for charges and countercharges of cronyism and corruption.

But accusations about matters like ticket-fixing are one thing, and allegations involving millions of federal dollars for storm recovery are quite another.

In February, federal prosecutors in New Orleans began bringing witnesses before a grand jury looking into possible fraud in Kenner municipal contracts that were awarded immediately before and after the hurricane. The mayor and the entire City Council have been subpoenaed to testify, although the government has not made clear its target.

Growing numbers of subpoenas may soon be issued across Louisiana, where local politics remains a blood sport and corruption has been a bad habit. That combination has become far more volatile with the addition of millions of dollars in aid beginning to flow from Washington and an army of auditors, investigators and prosecutors determined to make sure that the money is properly spent.

So far, the scrutiny has resulted in several major fraud prosecutions around the state. The government has filed charges against a politician in St. Tammany Parish, north of New Orleans, who is accused of seeking hurricane contract kickbacks, and against several federal workers accused of seeking bribes and a contractor who was paid millions of dollars for work the government says he did not perform at a tent camp.

New hurricane fraud investigations are being opened "sometimes by the day," said Jim Letten, the United States attorney in New Orleans, who was the lead prosecutor in the corruption case against former Gov. Edwin W. Edwards, convicted in 2000 of a scheme to extort money from businessmen seeking gambling boat licenses.

"Additional investigations focus on everything from fake charities to identity theft to contractors behaving fraudulently to public corruption cases," Mr. Letten said.

Grand jury investigations normally take place in secret, and Mr. Letten said he could not discuss the focus or the scope of the inquiry in Kenner, a city of 70,000 people that is home to New Orleans's airport.

But some information has become public, in part because the mayor and several City Council members have held news conferences on the investigation. Reporters were waiting in the halls of the Hale Boggs Federal Building on March 9 when a contractor and all seven members of the Council trooped up to the fourth floor to testify. And the contracts in question have been a subject of public acrimony between the mayor and the Council, a circumstance that led to a fistfight between a contractor and the brothers of a councilman at a Mardi Gras ball in February.

"Kenner is the home of hardball politics," said Jeff Crouere, a political commentator who is a former executive director of the Louisiana Republican Party. (Almost all the battling politicians in Kenner are Republicans.) But the grand jury inquiry, coming so soon before hotly contested city elections on April 1, "is just an incredible situation," Mr. Crouere said, "where voters are left scratching their heads."

Dominic O. Weilbaecher, a city councilman and former interim mayor, has raised questions about at least $22 million in city spending on debris removal, trailers and public relations.

The spending was approved by the current mayor, Philip L. Capitano, who is running for re-election. A former ally of his, Mr. Weilbaecher contends that Mr. Capitano is now rewarding campaign contributors, overpaying cronies and generally spending taxpayer money without demonstrating that the city is getting anything in return.

"I've been talking to guys from the F.B.I. for two years, just because of the foolishness I've seen from this administration," Mr. Weilbaecher (pronounced WHILE-backer) said in an interview.

What is new, he said, is that federal money is now involved: the city is seeking reimbursement for storm-related expenses from the Federal Emergency Management Agency.

"My take is, the U.S. attorney wants to send a message that regardless of what's going on with elections or any other thing, you don't mess with the federal government," Mr. Weilbaecher said.

The mayor replied that his efforts after the storm saved the city money, got it up and running quickly, and did not involve any impropriety.

"We did it better, we did it cheaper," he said in an interview. "That's why it's so funny we're being investigated by a grand jury right now, when we were more efficient, cheaper and better than all the surrounding communities."

The mayor later sent along a letter he had received from the University of Chicago Graduate School of Business praising his "bold and intelligent leadership" after the storm.

Randal Perkins, owner of a major debris removal company that worked in Louisiana and Mississippi after the hurricane, said in a phone interview that he believed Kenner was paying less on its cleanup contract than the Army Corps of Engineers was spending on similar work.

"It's politics," Mr. Capitano said of the inquiry. Mr. Weilbaecher and another councilman, Michael McMyne, "are trying to help the guy who ran against me" in the last election.

That guy, Nick Congemi, is the police chief and brother of Mr. Capitano's predecessor as mayor. The chief is among four candidates challenging Mr. Capitano this time.

"I don't think anybody can plot with the U.S. attorney's office," Mr. Congemi said recently. "That accusation is a simple politician's answer to a deep dilemma he's in now."

Whatever is behind the accusations, Mr. Letten, the prosecutor, had no choice but to look into them, said L. Eades Hogue, a former federal prosecutor representing the contractor who has appeared before the grand jury. "It smacks of politics," Mr. Hogue said, "but the U.S. attorney is obligated to investigate allegations such as these."

Even some critics of the mayor do not dispute that this city of about 15 square miles began rebounding from the hurricane faster than many other communities. But they suggest that this had less to do with politicians than with the route of the storm, which struck hardest at points farther east.

"As bad as it was, this city was blessed," said John T. Lavarine III, who like his father before him serves on the City Council. "We were on the western fringes."

Which is not to say that Kenner escaped unscathed. Driving his Crown Victoria through the city recently, Mr. Lavarine headed north and west to Loyola Drive, where white FEMA trailers line the streets like false teeth in front of damaged houses. Across town, a huge apartment complex that housed mostly Hispanic residents sits moldering, roofs torn off and walls tipped in.

Worried about rebuilding their homes and about the next hurricane, Kenner's residents, some politicians among them, seem embarrassed by the investigation and fed up with the political squabbling.

"The fighting and all has not served the city well," said Edmond J. Muniz, a retired businessman and politician known for founding Endymion, one of the biggest Mardi Gras krewes, or parade groups, who decided at the last minute to run for mayor. "I don't know how to put it. I wouldn't want to say we are a laughingstock, because it isn't funny."

A FAILURE OF INITIATIVE: Final Report of the Select Bipartisan Committee to Investigate the Preparation for and Response to Hurrican Katrina

EDITORIAL DESK
Reorganization Redux
(NYTIMES), Published: February 25, 2006

If there's one thing that Hurricane Katrina has taught us, it is that just shuffling the bureaucratic deck does not make us safer.
We tried that experiment in the wake of Sept. 11, cramming a host of agencies into one oversize Homeland Security Department. In its first big test, that goliath tripped and fell, at a terrible cost. Now the Bush administration appears ready to race off half-cocked in the opposite direction. In its newly released report on the Hurricane Katrina debacle, the White House suggests -- you guessed it -- more reorganization.

The report, by President Bush's domestic security adviser, Frances Fragos Townsend, lacks the bite of the select House committee's report of a week earlier, which was unsparing in its criticism of local, state and federal officials. As expected, the White House report sheds little light on President Bush's role in his administration's response to the immediate aftermath of the storm. It focuses instead on calling for a greater role in handling disasters for a host of federal agencies, like Health and Human Services, and Housing and Urban Development, and the big guns at Justice and the Pentagon.

The challenge is to make the Homeland Security Department work, not to siphon away its powers and give them to other agencies, which could then be denounced for a failure to coordinate properly the next time there's a crisis. Failures of leadership would not be corrected by yet another flow chart. What we need now is a steady hand and professionals in charge rather than political lackeys.

Recommending new structural changes is politically expedient because it diverts attention away from the real problem: the failures of Homeland Security under Secretary Michael Chertoff and the Federal Emergency Management Agency under Michael Brown. If Mr. Bush wants to adopt Ms. Townsend's suggestion to set up a disaster response group inside the White House, that's fine. But it won't solve our problems unless the president staffs it with strong, independent advisers.

A plan, unfortunately, is no better than the person following it.

NATIONAL DESK
White House Report Advises Revamping Disaster Response
By ERIC LIPTON, NY TIMES, Published: February 23, 2006

WASHINGTON, Feb. 22 - The nation must revamp the way it responds to major disasters or terrorist attacks, according to a new White House report that calls for more stockpiling of emergency supplies, a better-defined role for the military and a more concerted push to evacuate hospitals and nursing homes.
The report, prepared by Frances Fragos Townsend, President Bush's domestic security adviser, and scheduled to be officially released Thursday, does not advocate removing the Federal Emergency Management Agency from the Department of Homeland Security, which some members of Congress have urged, officials said Wednesday.

But it does call for many other changes in how federal agencies respond to disasters, including asking the Department of Housing and Urban Development to play a more central role in finding temporary housing for victims, according to a preview provided by Ms. Townsend in a speech last week that two senior administration officials said on Wednesday still stands as accurate summary of the recommendations.

The review by the White House is focused more on what changes must be made to prepare for the next catastrophe, rather than on the flawed reaction to Hurricane Katrina.

According to Ms. Townsend's speech and interviews with the two officials, the report will include these recommendations:

The disabled, the sick and the elderly must be included in evacuation plans, and drills must take place to ensure that the plans will work.

FEMA and other government agencies needed larger stockpiles of emergency supplies and the ability to track them.

Active-duty military forces may play a more prominent role in the response to major catastrophes, but the details of this enhanced role must be worked out.

The Department of Health and Human Services must play a more prominent role in provide medical assistance in response to disasters, because the current system, which divides responsibility between the Homeland Security and Health and Human Services Departments, left medical rescue workers confused over who was in charge of the response to Hurricane Katrina.

A second report, by a House committee, was released last week, and the third report, by a Senate committee, is expected in the next month.

THE NATION; Disaster Response: Watch TV, Go Home
By ERIC LIPTON, NY TIMES, Published: February 19, 2006

WASHINGTON - FIVE miles from the White House, inside a nondescript brick building, satellite and video images flash across wall-size computer monitors. Representatives from the C.I.A., F.B.I., Border Patrol, Department of Defense and more than 30 other agencies sit facing those screens, processing reports of potential threats to the nation, whether from Mother Nature or suspected terrorists or industrial accidents.
To the Department of Homeland Security, this gizmo-filled complex -- known as the Homeland Security Operations Center -- embodies all the lessons learned since Sept. 11, 2001. The idea is that by using technology to feed timely information to the right people the government will be able to prevent or rapidly respond to any catastrophe.

The center was tailor-made to manage a disaster like Hurricane Katrina. But details that have emerged in the last week, through Senate testimony and a new report by a House committee, raise questions about how much it accomplished in the face of human error and indecision.

When Hurricane Katrina bore down on the Gulf Coast on Monday, Aug. 29, Brig. Gen. Matthew E. Broderick -- the center's director and a veteran of Vietnam and Somalia -- was on duty.

At the end of each day, his job, based on the information collected by the center's staff, is to file a report to the Homeland Security secretary, Michael Chertoff, on the nation's security status. More important, if he decides a situation is dangerous or dire enough, it is his responsibility to call the secretary and White House staff to make sure they fully understand what is occurring.

The dispatches starting rolling in early Monday morning.

'It is getting bad,' said a 10 a. m. report sent to the center from Louis Dabdoub, a Homeland Security official in New Orleans. 'Major flooding in some parts of the city. People are calling in for rescue saying they are trapped in attics, etc. That means water is 10 feet high there already. Trees are blowing down. Flooding is worsening every minute.'

An e-mail message from Mr. Dabdoub at 10:36 reported that neighboring parishes were under water. Other messages that morning and afternoon from the Transportation Security Administration, Coast Guard and Army Corps of Engineers also warned of breached levees.

At 10:30 p.m., a FEMA staff member had sent a report saying that 'an estimated two-thirds to 75 percent of the city is under water,' adding that 'some homes were seen with water to the first floor and others completely underwater.'

At this point, certain things were obvious to General Broderick. 'Some parts were flooding,' he told Senate investigators earlier this month. 'We expect flooding during hurricanes and we know that.'

But he was not yet ready to conclude that a critical levee failure had occurred. The reports, he said, were too contradictory.

'It is our job at the H.S.O.C. to distill and confirm reports,' General Broderick told investigators. 'We should not help spread rumors or innuendo, nor should we rely on speculation or hype, and we should not react to initial or unconfirmed reports which are almost invariably lacking or incomplete.'

So instead of placing a call to Mr. Chertoff or the White House, General Broderick waited. And then the television report came in.

'In the French Quarter, on television, they were dancing and drinking beer and seemed to be having a party in the French Quarter of New Orleans that evening,' General Broderick told the Senate. 'It led us to believe that the flooding may have been just in isolated incidents. It was being handled and it was being properly addressed.'

With that, he went home for the night.

Everyone knows the ending: Floodwaters rose. Tens of thousands of people needed to be evacuated, but that did not start until early Wednesday morning.

But with a command center that costs about $56 million a year to run, why was a television report a deciding factor?

Looking back, General Broderick may have had some reasons for his hesitation.

Michael D. Brown, FEMA's director, frustrated that his agency was under Homeland Security, unilaterally decided not to work with the department and didn't tell General Broderick directly what FEMA had witnessed on Monday, as the storm hit home.

The FEMA staff member who had confirmed the breach of the 17th Street Canal levee in the 10:30 p.m. report was a public affairs officer, not an engineer. And he had no way of sending in his photographs of the breach. So his shot of the levee did not reach the wall-size screen at the Operations Center Monday night.

But senators on the Homeland Security and Governmental Affairs Committee said none of these excuses was sufficient.

'I hope you're really furious about the fact that your department let you go to bed on Monday night not knowing that the levees were broken,' Senator Joseph I. Lieberman, Democrat of Connecticut, told Mr. Chertoff this past week.

Mr. Chertoff nodded in agreement.

'I've gone over this in quite painful detail with General Broderick,' he told the committee. 'The effort did not proceed the way it should have.'

March 18, 2006
FEMA Will Try to Recoup Millions Distributed for Hurricane Relief
By ERIC LIPTON, NY TIMES

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WASHINGTON, March 17 : Acknowledging that it wrongly distributed tens of millions of dollars in hurricane relief last year, the Federal Emergency Management Agency said Friday that it would try to recoup aid from thousands of individuals or families who fraudulently or otherwise wrongly collected money.

Officials at the agency said it was a routine step taken after any disaster because in the rush to distribute emergency aid, benefits were occasionally paid twice to the same family or to people who were ineligible.

"In every disaster there are just some people who are bad apples who attempt to take advantage of the programs," said Donna Dannels, the acting deputy director of disaster recovery at FEMA.

But auditors examining the $6.8 billion in disaster assistance distributed last year to 1.7 million households after Hurricanes Katrina, Rita and Wilma said FEMA was to blame for much of the abuse because of a woefully inadequate accounting system that left it vulnerable to fraud.

"The right way to do this is to prevent it in the first place," said Gregory D. Kutz, managing director of a unit in the Government Accountability Office that has already found that thousands of people submitted duplicate or invalid Social Security numbers to receive aid. "You will never catch even a fraction of the people who have committed fraud here."

So far, FEMA has sent letters to 1,500 families asking them to return payments, which most frequently came in the form of $2,000 in cash but could legally reach $26,200 per household.

FEMA's requests for repayment came after it conducted its own search for duplicate payments and other irregularities.

The letters that went out this week were just the first wave. FEMA officials said Friday that they would most likely seek the return of aid from 2 percent to 3 percent of approved applicants. They said that they could not estimate how much money they would try to recoup, but that it could be up to $100 million.

In some cases, payments were made to families to cover immediate expenses that have since been reimbursed by private insurance, Ms. Dannels said.

But the inquiry by Mr. Kutz and his staff members, which is still under way, has already shown that thousands and perhaps tens of thousands of inappropriate payments were made because people were able to apply for and collect aid repeatedly.

For example, about 5,000 of the 11,000 victims of Hurricane Katrina who collected FEMA debit cards worth $2,000 that were distributed in Texas also received $2,000 payments in the mail, even though they were eligible for only one so-called expedited assistance payment to buy food, clothing and other emergency supplies.

Separately, investigators found that thousands of payments for cash aid and rental assistance were sent to people who applied with falsified Social Security numbers or numbers that belonged to people who had died.

The problem, the investigators found, was that when people called FEMA's toll-free registration number, the agency did not try to confirm their identities by using government records to match the applicants' names with the submitted Social Security numbers.

"FEMA provided the fraudsters an opportunity that was very appealing to steal money," Mr. Kutz said. In one case, a person used 15 different Social Security numbers to collect $41,000.

The weaknesses in FEMA's emergency aid system are not new: in 2004, after Hurricane Frances in Florida, it gave out $31 million in aid to more than 12,000 residents of the Miami area that auditors later ruled was largely unjustified because hurricane-force winds never hit the area. FEMA ultimately moved to recoup much of this money as well.

Individuals who receive a letter from FEMA will have a month to repay the requested amount before they will be charged interest. Recipients will have a chance to appeal, but if the appeal is not sustained and the payment is not made, the debt will be turned over to the Treasury Department to collect.

Officials from FEMA and the treasury could not say Friday how successful the government had been at recovering excessive or unjustified payments from past disasters.

R. David Paulison, the acting FEMA director, said the agency was moving to correct some of the problems, including establishing a way to verify applicants' identities when they applied for aid over the phone, a system that would be in place for the next hurricane season.

Ultimately, Mr. Paulison said, there will never be a way to stop all fraud and waste.

"For every instance of an incorrect payment, there are thousands who were genuinely in need of the federal government's help," Mr. Paulison said in a statement Friday. "It is our job to ensure there is not delay in receiving that assistance."

For Katrina Evacuee, Getting Help Is a Full-Time Job
By NICHOLAS CONFESSORE (NYT)
Published: March 8, 2006

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Donna Fenton no longer consults the scrap of paper in her pocketbook when she needs the phone number for the Red Cross, or New York City's welfare office, or the Federal Emergency Management Agency.
'I know them all by heart,' said Ms. Fenton, 37, who left Biloxi, Miss., after Hurricane Katrina destroyed her home there. 'I call them every day. That's my job.'

She starts in the morning, calling from the rooms she and her family share at a Ramada hotel near La Guardia Airport, or from the hotel's basement conference room. She knows what numbers will lead to someone helpful and the ones that will plunge her into a thicket of indifference or incomprehension. She keeps going for hours, sometimes until 3 o'clock the next morning.

The days and nights can blur together, a fog of dial tones, beige wallpaper and overly cheerful automated voices. 'Everything they asked for, I sent in,' she said. 'I sent it in the second time, and then I sent it in a third time.'

What she wants, she says, is enough money to move into a new apartment in New York, so she can begin anew the life that Katrina ripped apart. 'It wasn't like we had any luxuries,' she said. 'But we were scraping by.'

About 20 families left homeless by Katrina still live at the Ramada, and, all things considered, Ms. Fenton is among the more fortunate evacuees. Because she went to high school in New York, the city is not wholly foreign to her. She has found a job that pays about as well as the one she held managing two restaurants in Biloxi. Her husband, Matt, has found part-time work at an auto body shop.

Ms. Fenton is polite, organized and determined.

But more than five months after arriving in Queens with a change of clothes and a tapped-out bank account, moving on has been much harder than she thought it would be. Many obstacles she has encountered are familiar to other Katrina evacuees living in New York as they sort out their next moves and deadlines approach, after which the federal government will no longer pay for hotel rooms.

Some obstacles are more rare.

Ms. Fenton, who has lupus, collapsed at a Manhattan welcome center last September after filling out paperwork from half a dozen agencies and charities. Doctors found that days of irregular sleep and roadside food had worsened her condition, producing an enlarged heart and an irregular heartbeat.

'In the South,' she said, 'we eat a lot of vegetables. That's impossible to do in a hotel or on the road.' She spent four days in the hospital.

A Red Cross worker placed Ms. Fenton, her husband, and four of her five children -- Akreem, 16; Ashley, 14; LaTanya, 10; and Danielle, 9 -- at the Ramada, and gave her a debit card with a $1,565 limit. The children were placed in public school, but debit-card money quickly dwindled. 'That doesn't go far for six people,' she said.

So Ms. Fenton began working the phones. A $2,358 check for rent assistance from FEMA arrived in October. But a second check, for what the agency calls 'immediate needs,' never materialized. She also got no response from the Small Business Administration to a loan application she filed almost as soon as she arrived in the city. The FEMA check was soon used up -- on clothes, food, and transportation, and for her family, as well as for her oldest son, William, 21, and his fiancée, Amanda McGee, who also live at the hotel.

Twice, Ms. Fenton said, she found apartments, but was afraid to sign leases because she was not sure FEMA's promised rental assistance would arrive.

Filing paperwork was a constant headache. Faxes to and from agencies seemed to disappear regularly. 'It was like Russian roulette,' she said.

FEMA granted her an extension to stay at the hotel, she said, but then forgot to issue an authorization code for the second of the two rooms her family occupied. That meant more time pleading on the phone.

A FEMA spokeswoman, Nicole Andrews, acknowledged last week that the process could be 'pretty tough for anyone who has been traumatized like these people have.'

There were bright spots. A recreation center in Brooklyn offered free memberships to the Ramada evacuees. At Christmas, a nearby church gave $100 gift cards to the families.

But Ms. Fenton's health was a continuing problem. In October, a hotel maid found her unconscious in her room. More hospital stays followed, six in all, as she battled to control her lupus. Then, in February, her appendix burst, resulting in a two-week hospital stay.

Her son William was told by doctors that he had post-traumatic stress syndrome stemming from the hurricane. More recently, her daughter LaTanya disappeared from the hotel and was found wandering the streets nearby. 'She was saying that she didn't want to go back to the hotel,' Ms. Fenton said.

Two weeks ago, an unlicensed driver slammed into their car, destroying the family's main means of transportation. Her husband has borrowed cars from colleagues at work to take the younger children to school.

A new apartment, however, has remained elusive, and with it a normal life. With all the time she spends on the phone, she said, she cannot start the job waiting for her at a Brooklyn check-cashing business.

In January, a real estate agent helped line up a new apartment in Bushwick, Brooklyn. But without another rental assistance check, Ms. Fenton was afraid to move, despite the apartment building owner's encouragement.

'I know I can't live there for free,' she said. 'I don't want to get us there and then stick this lady with not being able to pay the rent.' She recently learned that the second rent check had been lost in the mail, and a replacement could not be issued until it was found.

'From what I'm hearing, it's a long process,' said Ms. Fenton, still hopeful of moving to the Bushwick apartment.

She pulled on her coat. She needed to go to Manhattan to pick out furniture for the possible new apartment from a Salvation Army warehouse. It was her second trip there: the first time, the table and chairs she had ordered arrived with the legs broken.

'That's the most agitating part,' she said. 'Everything is done over and over. All of this has been done before.'

Katrina Disaster Committee investigation