Thursday, 27 June 2013

Audit Report on Katrina Debit Cards; Some Recipients Swam In Champagne

A federal audit on the spending proclivities of people who were issued debit cards by FEMA during the Katrina disaster indicates that some of them were swimming in champagne – and good stuff, too.

Among the survival rations that were purchased, we find a $200 bottle of champagne, used as a life-saving device at the hurricane shelter known as Hooters. The establishment, upon hearing of the purchase, has nobly agreed to refund the amount to FEMA.

Other items that emergency cards were used to purchase are the following:

A flotation device of questionable effect, called diamond jewelry.

An escape route from the rising waters to a vacation in the Dominican Republic.

Salvation from a divorce lawyer by paying off a $1,000 legal bill.

Drying out at a strip club, where the recuperative process required $600.

Recuperation with $400 of “adult erotica products.”

The auditors concluded that such purchases were "not necessary to satisfy legitimate disaster needs."

Greg Kutz, a GAO forensic auditor, said one "fraudster" way up in West Virginia received a rental assistance check by using the address of a cemetery in New Orleans.

Another application, employing a vacant lot as an address, found favor in FEMA for a payment of $2,358 in rental assistance.

The relief organization also paid $8,000 and then $5,000 more, in a double-dip into rental assistance, to help a long-suffering recipient survive at a resort hotel in Honolulu.

The GAO also found that FEMA lost track of 750 debit cards, worth a total of $1.5 million.

As a result of the debit-card debacle, FEMA itself has been scheduled to receive federal disaster relief.