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Widespread fraud, waste in Katrina disaster aid

Tens of millions of dollars in Katrina relief funds were squandered on everything from tattoos to trips to casinos and strip joints to thousands of trailers now sitting ruined in a muddy field.

The staggering array of fraud and mismanagement was catalogued Monday in government reports as Homeland Security chief Michael Chertoff announced reforms for the beleaguered agency.

But Chertoff ignored reports about the massive waste in the stampede to help Katrina victims after the government was embarrassed by the disaster.

The Government Accountability Office said that of the 2.5 million emergency relief debit cards that were issued, 900,000 went to people with phony addresses, fake Social Security numbers or with duplicate numbers.

Some recipients spent the $2,000 on the cards for guns, jewelry, tattoos and a bail bondsman. Others used the cash to party at strip clubs or gamble at casinos. One person went on a shopping spree for "adult erotica products at Condoms-to-Go."

And the GAO said scammers got as many as 15 cards using phony addresses.

Most of the $24 million cash doled out to Gulf Coast residents in the days following the catastrophe will never be accounted for, thanks to lax oversight by FEMA, auditors said.

"The bottom line ... is that weak or non-existent controls leave the government vulnerable to substantial fraud and abuse," GAO investigator Gregory Kutz told the Senate Homeland Security Committee.

Those figures are marginal compared with the nearly $1 billion FEMA squandered on 24,000 mobile homes, said the Homeland Security Department's inspector general. Only 1,200 of those trailers were used, Richard Skinner said.

The rest are "sinking in the mud and their frames are bending from sitting on trailers with no support," Skinner said. "They may have to be disposed of."

Worse, if another hurricane wallops the Gulf Coast, FEMA isn't prepared to handle it.

"If a disaster occurred today, I think we would be no better prepared than we were after Katrina," he said. "Maybe even less prepared because we have so many people deployed."

Chertoff, who oversees FEMA, said in a speech, "I am accountable and accept responsibility for the entire department, good and bad."

He announced a shake-up of FEMA that includes creating a full-time response force of 1,500 new employees and establishing a more reliable system to report on disasters as they unfold.

Chertoff and homeland security adviser Frances Townsend also rejected suggestions Monday that President Bush was out of touch as the Katrina disaster unfolded.

"As you know, President Bush was highly engaged in the preparation and response effort, beginning when Katrina was a tropical storm off the coast of Florida," Townsend said.

Taken from New York Daily News

See earlier postings:

New Orleans - Spin and blame game
New Orleans - hurricane, hubris and hazard
New Orleans - media exaggeration
New Orleans -  Dutch help sought