FacebookTwitterGoogle+RedditEmail

Where Did the Katrina Money Go?

by JEFFREY BUCHANAN And CHRIS KROMM

When pressed on the slow pace of recovery
in the Gulf Coast, President Bush insists the federal government
has fulfilled its promise to rebuild the region. The proof, he
says, is in the big check the federal government signed to underwrite
the recovery — allegedly more than $116 billion. But residents
of the still-devastated Gulf Coast are left wondering whether
the check bounced.

“$116 billion is not a
useful number,” says Stanley Czerwinski of the Government
Accountability Office, Congress’ investigative arm.

For starters, most federal
money — about two-thirds — was quickly spent for short-term
needs like debris removal and Coast Guard rescue. As Czerwinski
explains, “There is a significant difference between responding
to an emergency and rebuilding post-disaster.”

That has left little money
for long-term Gulf Coast recovery projects. Although it’s tricky
to unravel the maze of federal reports, our best estimate of
agency data is that only $35 billion has been appropriated for
long-term rebuilding.

Even worse, less than 42 percent
of the money set aside has even been spent, much less gotten
to those most in need. For example:

Washington set aside $16.7
billion for Community Development Block Grants, one of the two
biggest sources of rebuilding funds, especially for housing.
But as of March 2007, only $1 billion — just 6 percent — had
been spent, almost all of it in Mississippi. Following bad publicity,
HUD spent another $3.8 billion on the program between March and
July, leaving 70 percent of the funds still unused.

The other major source of rebuilding
help was supposed to be FEMA’s Public Assistance Program. But
of the $8.2 billion earmarked, only $3.4 billion was meant for
nonemergency projects like fixing up schools and hospitals.

Louisiana officials recently
testified that FEMA has also “low-balled” project costs,
underestimating the true expenses by a factor of four or five.
For example, for 11 Louisiana rebuilding projects, the lowest
bids came to $5.5 million — but FEMA approved only $1.9 million.

After the failure of federal
levees flooded 80 percent of New Orleans, the U.S. Army Corps
of Engineers received $8.4 billion to restore storm defenses.
But as of July 2007, less than 20 percent of the funds have been
spent, even as the Corps admits that levee repair won’t be completed
until as late as 2011.

The fact that, two years later,
most federal Katrina funds remain bottled up in bureaucracy is
especially shocking considering that the amounts Washington allocated
come nowhere near the anticipated costs of Gulf rebuilding.

For example, the $3.4 billion
FEMA has available to recover local public infrastructure would
only cover about one-eighth of the damage suffered in Louisiana
alone. But this money is spread across five states — Alabama,
Florida, Louisiana, Mississippi, and Texas — and covers damage
from three 2005 hurricanes, Katrina, Rita and Wilma.

Congress has acted on some
of the money holdups, like changing a requirement in the Stafford
Act that mandates local governments pay 10 percent of rebuilding
projects up front before receiving federal aid. The Bush administration
had refused to waive the rule — like it did for New York after
9/11 — grounding countless projects. The effect of the rule
was particularly devastating in the hardest-hit places like Mississippi’s
Hancock County, where communities lost most of their tax base
after the storms.

Many in Washington claim that
state and local governments are to blame: The money’s there,
they say, but the locals just aren’t using it. And it’s true
that there have been problems below the federal level. For example,
Louisiana’s “Road Home” program — created by Congress
but run by the state — has been so poorly managed that 18 months
after the storms only 630 homeowners had received checks. Closings
have sped up since then, but administrators admit many won’t
see money until 2008, if at all — the program is facing a projected
$3 billion shortfall.

But the White House and Congress
have done little to exercise oversight of these federally backed
programs, much less step in to remove red tape and make sure
taxpayer money gets to its intended destination.

This is especially true when
it comes to tax breaks and rebuilding contracts. Included in
the $116 billion figure is $3.5 billion in tax breaks to jump-start
business in Gulf Opportunity Zones — “GO Zones” —
across 91 parishes and counties in Alabama, Louisiana and Mississippi.
But many of the breaks have been of questionable benefit to Katrina
survivors, like a $1 million deal to build 10 luxury condos next
to the University of Alabama football stadium — four hours from
the Gulf Coast.

Federal contracts for rebuilding
and recovery have also been marked by scandal, fraud and abuse.
An August 2006 study by the office of Rep. Henry Waxman, D-Calif.,
identified 19 contracts worth $8.75 billion that experienced
“significant overcharges, wasteful spending or mismanagement.”

For thousands of Gulf residents,
the end result is that federal support for recovery after Katrina’s
devastation has been insufficient, too slow and hasn’t gotten
to those most in need.

“Where did it go?”
says Tanya Harris of ACORN in New Orleans when asked about the
$116 billion. “Tell me. Where did it go?”

Jeffrey Buchanan is communications officer with the
Robert F. Kennedy Memorial
Center for Human Rights
.

Chris Kromm is executive director of the Institute
for Southern Studies
. This report was part of ISS’s “Blue
Print for Gulf Renewal
“.

Weekend Edition
July 29, 2016
Friday - Sunday
Michael Hudson
Obama Said Hillary will Continue His Legacy and Indeed She Will!
Jeffrey St. Clair
She Stoops to Conquer: Notes From the Democratic Convention
Rob Urie
Long Live the Queen of Chaos
Ismael Hossein-Zadeh
Evolution of Capitalism, Escalation of Imperialism
Margot Kidder
My Fellow Americans: We Are Fools
Ralph Nader
Hillary’s Convention Con
Lewis Evans
Executing Children Won’t Save the Tiger or the Rhino
Vijay Prashad
The Iraq War: a Story of Deceit
Chris Odinet
It Wasn’t Just the Baton Rouge Police Who Killed Alton Sterling
Brian Cloughley
Could Trump be Good for Peace?
Patrick Timmons
Racism, Freedom of Expression and the Prohibition of Guns at Universities in Texas
Gary Leupp
The Coming Crisis in U.S.-Turkey Relations
Pepe Escobar
Is War Inevitable in the South China Sea?
Norman Pollack
Clinton Incorruptible: An Ideological Contrivance
Robert Fantina
The Time for Third Parties is Now!
Andre Vltchek
Like Trump, Hitler Also Liked His “Small People”
Serge Halimi
Provoking Russia
David Rovics
The Republicans and Democrats Have Now Switched Places
Andrew Stewart
Countering The Nader Baiter Mythology
Rev. William Alberts
“Law and Order:” Code words for White Lives Matter Most
Ron Jacobs
Something Besides Politics for Summer’s End
David Swanson
It’s Not the Economy, Stupid
Erwan Castel
A Faith that Lifts Barricades: The Ukraine Government Bows and the Ultra-Nationalists are Furious
Steve Horn
Did Industry Ties Lead Democratic Party Platform Committee to Nix Fracking Ban?
Robert Fisk
How to Understand the Beheading of a French Priest
Colin Todhunter
Sugar-Coated Lies: How The Food Lobby Destroys Health In The EU
Franklin Lamb
“Don’t Cry For Us Syria … The Truth is We Shall Never Leave You!”
Caoimhghin Ó Croidheáin
The Artistic Representation of War and Peace, Politics and the Global Crisis
Frederick B. Hudson
Well Fed, Bill?
Harvey Wasserman
NY Times Pushes Nukes While Claiming Renewables Fail to Fight Climate Change
Elliot Sperber
Pseudo-Democracy, Reparations, and Actual Democracy
Uri Avnery
The Orange Man: Trump and the Middle East
Marjorie Cohn
The Content of Trump’s Character
Missy Comley Beattie
Pick Your Poison
Kathleen Wallace
Feel the About Turn
Joseph Grosso
Serving The Grid: Urban Planning in New York
John Repp
Real Cooperation with Nations Is the Best Survival Tactic
Binoy Kampmark
The Scourge of Youth Detention: The Northern Territory, Torture, and Australia’s Detention Disease
Kim Nicolini
Rain the Color Blue with a Little Red In It
Cesar Chelala
Gang Violence Rages Across Central America
Phillip Kim et al.
Open Letter to Bernie Sanders from Former Campaign Staffers
Tom H. Hastings
Africa/America
Robert Koehler
Slavery, War and Presidential Politics
Charles R. Larson
Review: B. George’s “The Death of Rex Ndongo”
July 28, 2016
Paul Street
Politician Speak at the DNC
FacebookTwitterGoogle+RedditEmail