U.S. Wants $309M in Katrina Hurricane Aid Returned

In the New Orleans neighborhood President George W. Bush visited after Hurricane Katrina, the U.S. government gave $84.5 million to more than 10,000 households. But official figures show fewer than 8,000 homes existed there at the time.

Now the government wants back a lot of the money it gave out across the region.

The Federal Emergency Management Administration has determined nearly 70,000 households improperly received $309.1 million in grants, and officials acknowledge those numbers are likely to rise.

In the chaotic period after two deadly hurricanes, Katrina and Rita, slammed the Gulf Coast in 2005, federal officials scrambled to provide help to hard-hit areas.

But an Associated Press analysis of government data suggests the government might not have been careful enough with its aid as it gave out nearly $5.3 billion to storm victims. The analysis found the government regularly gave money to more homes in some neighborhoods than the number of homes that actually existed.

The pattern was repeated in nearly 100 neighborhoods damaged by the hurricanes. At least 162,750 homes that did not exist before the storms may have received a total of more than $1 billion in improper or illegal payments, the AP found.

The AP analysis discovered the government made more home grants than the number of homes in one of every five neighborhoods in the wake of Katrina. After Rita roared ashore, there were more home grants than homes in one of every 10 neighborhoods.

In one neighborhood, at least one person gave an address as a cemetery.

In St. Bernard Parish, close to where Katrina made landfall south of New Orleans, Martina Wiggins said she was denied aid because someone had already applied using her address.

“They gave away the money too fast,” Wiggins said bitterly. “A lot of people got money who didn’t deserve it.”

“We don’t dispute that more households received expedited assistance in certain zip codes than are listed in the 2000 Census,” said David Garratt, FEMA’s deputy director for recovery. But he called this “not only justifiable, it’s defensible.”

Officials say a large number of those payments – they cannot say precisely how many – were made legitimately to homes where family members were separated after the storm, such as emergency workers who stayed behind as spouses and children fled. In such cases, a single family could qualify for more than one aid package. Garratt said officials were in a no-win position.

“We were faced with a situation where we had individuals who needed assistance, and needed it now,” he said. “If we’d followed the standard procedures, it would have taken weeks.”

The Justice Department so far has prosecuted more than 400 people for storm-related fraud, and $18 million has been returned to FEMA or the American Red Cross, according to a recent report by the department’s Katrina Fraud Task Force.

In some cases, FEMA is still trying to collect refunds from individuals who improperly received more than one grant or who were ineligible for assistance. But for people like Keshian Mitchell, a 17-year-old Katrina refugee living in a dismal apartment complex in west Houston, it is small comfort.

“They ain’t no help now,” said Mitchell, who didn’t find her parents until six months after Katrina laid waste to New Orleans. “Nobody’s getting any more help – they already spent all the money.”

Crystal Dixon, who lives near Mitchell, agreed. Dixon, 25, said she saw people defraud taxpayers while she fought for basic assistance to help feed and clothe her five children, ages 1 to 10.

She met one woman who had moved to Houston two years before the storm but kept her Louisiana driver’s license. The woman, who had no children, got cash assistance before Dixon was helped, Dixon said.

“I try to understand how confused things got,” said Dixon. Her children played outside and chattered excitedly about nearly falling off a roof into flood-swollen streets, being rescued by a Coast Guard helicopter and scrounging for food and water at the overcrowded Superdome. “But I thought everyone should have been treated equally.”

Cedric Miller, a 34-year-old busboy at a New Orleans restaurant, said FEMA officials seemed to be reacting as best they could to the devastation. But Miller also said: “There was a lot of fraud going on. … There was a whole lot of that going on. It was a big ol’ way-drawn-out mess.”

Frank Bass reported this story from Washington, Houston and New Orleans. Michelle Roberts reported from New Orleans.