Price gougers spot prey in New Orleans

Thousands of signs offering everything from mildew cleaning to removal of destroyed homes litter post-Katrina New Orleans, and residents are learning to beware.

“The vultures are out there for the insurance money,” said Missy Staggs, an insurance adjuster who had one client who was charged $4,000 for the removal of one felled tree.

“At first, I thought a major election was being held,” said Miss Staggs, who says the campaignlike signs proliferate by the hundreds daily. “It’s totally out of control.”

Some of the signs offer legal assistance, which price gougers will need if they’re caught by state and federal investigators.

Louisiana Attorney General Charles Foti Jr. is looking into 2,500 complaints filed with his office, and this week, he pressed charges against an electrical contractor for overcharging an 80-year-old woman thousands of dollars.

“We think this practice has to stop,” Mr. Foti said during a press conference.

Mr. Foti wants the state Legislature, which is meeting in a special session, to give him the authority to issue cease-and-desist orders during states of emergency to companies suspected of fraud.

Nationwide, a team of federal investigators is conducting hundreds of investigations and audits of contracts awarded to rebuild the Gulf Coast.

The Homeland Security Department’s inspector general office has received more than 2,000 complaints and is reviewing more than 3,000 contracts worth more than $5 billion. Two months after Hurricane Katrina, the inspectors have initiated nearly 300 audits and more than 70 investigations.

The inspectors and Mr. Foti are part of the Hurricane Katrina Fraud Task Force, which has arrested 70 persons posing as victims of the storms, including seven American Red Cross volunteers at a call center for victims in Bakersfield, Calif.

To date, the government has spent $835 million through 18 government agencies on the recovery effort, according to the Federal Procurement Data System. Additionally, Federal Emergency Management Agency has made public-assistance grants to three states for a total of $963 million, and contracts to the private companies in the cleanup effort have reached $1.6 billion.

Government watchdog groups are concerned that the reduction of oversight employees coupled with the mammoth amount of spending will burden inspectors and are calling for full public disclosure of all government contracts.

“It will let the public know the government doesn’t have anything to hide. Right now, there are a lot of suspicions that inappropriate things are going on, and making those records public would help dispel some of that,” said Beth Daley, of the Project On Government Oversight (POGO).

POGO and other organizations including OpenTheGovernment.org wrote to President Bush Wednesday, asking that copies of all contracts be posted on the Internet.

“Congress has put $6.3 billion into Hurricane Katrina relief with billions more expected in help for Gulf Coast recovery efforts. With the federal government spending so much so quickly, opportunities for waste and fraud abound,” the letter said.

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