Fraudulent use of Katrina aid was so widespread no one knows how big it is

This is an excellent story from Sharon Cohen of the Associated Press.  Excellent, but depressing, because the numbers in the story indicate both that no one has any idea of how much Katrina aid was used fraudulently, and that the fraud is sure to intensify as more aid money is spent.  The number $1 billion is used as a possible figure for the amount of fraud so far, but if you read the story closely, that is only a guess, and the worst fraud is yet to come as more expensive rebuilding projects get under way and contractors institute larger fraud schemes.

Remember also that one number from the story about the amount of Katrina aid — $5.3 billion — appears to refer only to emergency payments to victims themselves, because the true amount of money appropriated for Katrina aid was well more than $100 billion.  The amount of fraudulent aid recovered is pitiful — 1 percent, according to the Cohen story — and from the sounds of it, Katrina fraud investigators will have a guaranteed job for the next eight to 10 years.  This all puts some perspective on this New York Times story discussing how red tape interferes with doling out the Katrina money. Instead, it sounds to me like there wasn’t enough red tape. 


Filed under Industry Developments

2 Responses to Fraudulent use of Katrina aid was so widespread no one knows how big it is

  1. And if included what it cost to bring all of us National Guard down there as “aid”…wooh.

  2. Or the amounts spent on sending various politicians in to get in the way of the rescue and clean-up.