- The Washington Times - Wednesday, September 28, 2005


Lawmakers who approved billions of dollars to help rebuild the Gulf Coast after Hurricane Katrina said yesterday there are worrisome signs of wasteful spending.

Citing no-bid contracts and relaxation of government spending rules to speed the flow of money to the Gulf Coast, House members said government auditors need to be aggressive in their oversight.

“I fear that the days are soon upon us where we will see daily reports of exotic, unnecessary and grossly overpriced purchases of goods and services under the guise of providing hurricane relief and recovery,” said Rep. Jay Inslee, Washington Democrat.

“It does not appear that a single inspector general is in full charge of seeing that these monies are wisely spent.”

Congress has approved more than $62 billion in Katrina aid. Inspectors general from the Homeland Security Department, Pentagon and other agencies appeared before the House Energy and Commerce oversight and investigations subcommittee to describe their efforts to ensure the money is spent wisely.

They announced several audits intended to stem fraud, including aggressive review of no-bid contracts and government credit card spending. The limit on credit card purchases for Katrina-related items was raised from $2,500 to $250,000.

“I think the office of inspector general is well-equipped to deal with oversight,” said Richard Skinner, inspector general at the Homeland Security Department, which is coordinating auditing efforts among the various agencies.

Several lawmakers were skeptical, repeatedly asking Mr. Skinner whether he could handle the task of coordinating the work of all the agency inspectors general.

They pointed to the early approval of large contracts for emergency housing, including a $236 million deal with Carnival Cruise Lines for ships that are sitting half-empty. They also questioned the Bush administration’s recommendation of the higher purchase limit for credit cards.

“Who approved these? Who’s in charge here?” asked Rep. Bart Stupak, Michigan Democrat, expressing concerns that a review of contracts after the fact might not recover money already lost.

“I just think we’re throwing a lot of money out there,” he said. “We need someone in charge and accountable.”

A flurry of legislation pending in Congress would create additional layers of oversight to the Katrina contracting and award process.

Sens. Tom Coburn, Oklahoma Republican, and Barack Obama, Illinois Democrat, proposed a bill that would create a chief financial officer to oversee and approve all Katrina-related spending.

That task is designated now to the contracting officers at the respective agencies, which are subject to review by the inspectors general.

In the weeks after the hurricane, more than 80 percent of the $1.5 billion in contracts awarded by the Federal Emergency Management Agency for Katrina work were handed out with little or no competition or had open-ended or vague terms that previous audits have cited as at risk of abuse.

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