- The Washington Times - Monday, December 25, 2006

ASSOCIATED PRESS

Already at $1 billion, the tally for Hurricane Katrina waste will balloon next year as investigators shift their attention from fraudulent aid to the lucrative government contracts awarded with little competition.

Several of the contracts were hastily given to politically connected firms in the aftermath of the 2005 storm and were extended without notice months later. Critics say the arrangements promote waste and unfairly hurt small companies.

Next month, federal investigators will release the first of several audits examining abuse in 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 work.

Currently, half of the government’s contracts valued at $500,000 or greater are no-bid.

“Based on their track record, it wouldn’t surprise me if we saw another billion more in waste,” said Clark Kent Ervin, the Homeland Security Department’s inspector general from 2003 to ‘04. “I don’t think sufficient progress has been made.”

He called it inexcusable that the Bush administration would still have so many no-bid contracts, noting that auditors and Federal Emergency Management Agency Director R. David Paulison himself have said they are prime areas for waste.

“It’s a combination of laziness, ineptitude, and it may well be nefarious,” Mr. Ervin said.

FEMA spokesman James McIntyre said the agency was working to fix its mistakes by awarding contracts for future disasters through competitive bidding. Mr. Paulison has said he welcomes additional oversight but cautioned against investigations that aren’t based on “new evidence and allegations.”

“As always, FEMA will work with Congress in all aspects to ensure that we are carrying out the agency’s responsibilities,” Mr. McIntyre said.

Katrina swept ashore Aug. 29, 2005, in southern Louisiana, Mississippi and Alabama, leveling homes and businesses along the Gulf Coast. Its storm surge breached levees in New Orleans, unleashing a flood that inundated the city. The hurricane left more than 1,300 people dead, hundreds of thousands homeless and tens of billions of dollars worth of damage.

A series of government investigations in the storm’s wake faulted the Bush administration for underestimating the threat and failing to prepare by pre-negotiating contracts for basic supplies in what has become the nation’s costliest disaster.

Earlier this month, the Government Accountability Office said its initial estimate of $1 billion in disaster aid waste was “likely understated,” citing continuing problems in which FEMA doled out tens of millions of dollars in fraudulent housing assistance.

Democrats in Congress called for more accountability. When they take over next month, at least seven committees plan hearings or other oversight on how the $88 billion approved for Katrina relief is being spent.

A study earlier this year by Rep. Henry A. Waxman, California Democrat, estimates that hundreds of millions of dollars were likely wasted on contracting, citing instances of double-billing and thousands of trailers meant as emergency housing sitting empty in Arkansas.

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