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Report Calls Payments By FEMA Questionable
Investigators Cite $31 Million Disbursed in Florida

By John Mintz
Washington Post Staff Writer
Thursday, May 19, 2005

The Federal Emergency Management Agency made $31 million in questionable payments to residents of Miami-Dade County for damage from Hurricane Frances last September even though the storm caused only minimal damage in that area of Florida, government investigators said yesterday.

More than $8 million of that amount was given to 4,300 people to rent temporary housing even though they had not asked for the money, and in many cases their homes were almost completely undamaged by the storm, according to the inspector general of the Department of Homeland Security. The inspector general's report was made public yesterday at a hearing of the Senate Homeland Security and Governmental Affairs Committee.

FEMA paid to replace thousands of televisions, air conditioners, beds and other furniture, as well as a number of cars, without receipts, or proof of ownership or damage, and based solely on verbal statements by the residents, sometimes made in fleeting encounters at fast-food restaurants, said the committee's chairman, Sen. Susan Collins (R-Maine).

"It was a 'pay first, ask questions later' approach," Collins said. "The inspector general's report identifies a number of significant control weaknesses that create a potential for widespread fraud, erroneous payments and wasteful practices."

Michael Brown, who runs FEMA as DHS's undersecretary for emergency preparedness and response, strenuously defended his agency at yesterday's hearing. He said its actions coping with the four hurricanes hitting Florida in six weeks -- in which 117 people died and property damage amounted to $21 billion -- was "the single largest mobilization of emergency response and recovery resources in history."

He said FEMA mistakenly paid out a handful of undeserving claims and made some other bureaucratic errors. But he said his agency was trying to engage in a difficult balancing act -- practicing judicious oversight while sending payments to needy hurricane victims as fast as possible. "We must never . . . sacrifice that urgency in the pursuit of elusive administrative perfection," Brown said. "Our mission to get help quickly to those who desperately need it must take priority, yet be carefully balanced with our obligation to be stewards of taxpayer dollars. . . . FEMA was never stampeded into making any decisions."

Brown cited Hurricane Andrew in 1992 as a historic failure that still looms over FEMA, which was harshly criticized for failing to deliver aid and distribute funds quickly enough to victims in Miami. That failure has long been blamed as contributing to President George H.W. Bush's defeat that year.

Although Brown said he welcomed DHS acting Inspector General Richard L. Skinner's report and Collins's criticism, he also said it is difficult for people not involved in FEMA's huge response to hurricanes Charley, Frances, Ivan and Jeanne between Aug. 13 and Sept. 26, 2004, to grasp the complexities of its work.

Frances hit Hutchinson Island, Fla., about 100 miles north of Miami-Dade County, on Sept. 5. Miami-Dade officials described the damage there from heavy rain and winds of up to 45 mph as "minimal."

Skinner's office started investigating the matter last year after the Sun-Sentinel newspaper in Fort Lauderdale published articles alleging that FEMA massively overpaid many Miami-Dade residents after Frances. The IG said one case of overpayment involved $10 million that was used to replace household items in Miami-Dade partly because of a nationwide FEMA policy requiring that the replacement cost of a large bedroom suite be paid even though only a bed is damaged.

Homeland Security sources said FEMA's efforts to distribute funds quickly after Frances and three other hurricanes that hit the key political battleground state of Florida in a six-week period last fall were undertaken with a keen awareness of the coming presidential election. They also noted that politics has had a role in disaster relief activities in various administrations.

J. Robert Hunter, director of insurance for the Consumer Federation of America who was a top federal flood-insurance official in the 1970s and 1980s, said that in the vast majority of hurricanes other than those in Florida in 2004, complaints are rife that FEMA vastly underpays hurricane victims. The Frances overpayments "are questionable given the timing of the election and Florida's importance" as a battleground state, said Hunter, who was Texas insurance commissioner in the 1990s under then-Gov. Ann W. Richards (D).

Homeland Security sources said after the hurricanes that Brown and his allies promoted him as a successor to Tom Ridge as Homeland Security secretary because of their contention that he helped deliver Florida to President Bush by efficiently responding to the Florida hurricanes.

FEMA spokesman Natalie Rule said yesterday that there is "no truth" to the assertion that Brown angled to be secretary by citing his hurricane record. She denied that political considerations played a role in FEMA's Florida actions.

Staff researcher Julie Tate contributed to this report.

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