FEMA Wants Over $300M in Katrina Aid Back

Martina Wiggins with her grandsons Joshua Porrazzo, 8, left, and Jarred Porrazzo, 7, talks to The Associated Press about FEMA fraud in Violet, La., Thursday, Oct. 26, 2006. In St. Bernard Parish, close to where Katrina made landfall south of New Orleans last August, the floodwaters rose above 20 feet, and white FEMA trailers are still parked outside almost every house. Residents there, like Wiggins told the same story: she said 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." (AP Photo/Alex Brandon) (Alex Brandon - AP)

NEW ORLEANS -- In the neighborhood President Bush visited right after Hurricane Katrina, the U.S. government gave $84.5 million to more than 10,000 households. But Census figures show fewer than 8,000 homes existed there at the time.

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

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

In the chaotic period after two deadly hurricanes, Katrina and Rita, slammed the Gulf Coast in 2005 _ Katrina making landfall in late August, followed by Rita in late September _ federal officials scrambled to provide help in hard-hit areas such as submerged neighborhoods near the French Quarter.

But an Associated Press analysis of government data obtained under the federal Freedom of Information Act suggests the government might not have been careful enough with its checkbook as it gave out nearly $5.3 billion in aid 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 didn't 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.

"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 substantial 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."

Garratt acknowledged FEMA wasn't prepared to verify the identities and homes for everyone who needed help. He said the agency had multiple safeguards to ensure proper payments were made to people who applied online. But a new system designed to keep a tight rein on payments to people who telephoned their applications to FEMA was only partially finished when the storms hit, he said.

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. The bulk of prosecutions have occurred in Louisiana (115), California (79), Texas (50) and Mississippi (46). The amount recovered so far, however, is slight compared with estimates of widespread fraud.