FEMA declares they are becoming stronger after realizing how much money was wasted in the hurricane disasters!

Hope Yen at the AP has written an article based on a report by the Inspector General at Homeland Security that $3.6 billion in contracts were awarded to companies with ties to the Republican Party rather than to local companies, impacted by the Katrina/Rita hurricanes.

She quotes Senator Dorgan, who requested the audit, as saying:

"This confirms what we already knew about FEMA — there was a staggering level of incompetence, and the victims of Katrina, as well as taxpayers, are taking it on the chin," Sen. Byron Dorgan (news, bio, voting record), D-N.D., who requested the audit, said Monday.

Dorgan, who chairs the Democratic Policy Committee, said that it was ironic that the new contracts were aimed at helping small businesses in the region get back on their
feet, but instead "some very big interests got some very lucrative contracts."

"There are a lot of things wrong with this, so this report should be a warning signal to Homeland Security and FEMA," he said.

Government investigators already estimate over $1 billion in losses due to waste.

FEMA's response was:

In response, FEMA in the report disagreed that the wide price variations put taxpayers at risk. The agency contended that it was comfortable with bidders' financial viability based in part on past performance. In cases where contract prices appeared unreasonably high, those would be offset with lower payments later on subsequent work orders, FEMA officials said.

FEMA spokesman Aaron Walker said Monday that the agency welcomed the audit's findings and was working hard on improvements to better perform its duties "while being a conscientious steward of taxpayer dollars." He said that FEMA contracting officers did a "remarkable job" given their short time frame.

The audit will assist in making "the new FEMA stronger, more flexible and cost-effective," Walker said in a statement.

Full AP story with links to the Homeland Security report, here.

Both sides can argue, but one thing is apparent, which is we probably could have done a lot more for the victims with the resources we spent!

If mistakes like this ($1 billion and counting) were made at a private organization, do you think the people making them would still be employed?

Probably, not very likely! Perhaps, I could get "the Donald" to comment, but that's not very likely, either.

The political climate on wasted government money is heating up. Recently, I blogged about $2 billion, allegedly wasted by a company (recently sold off by Halliburton) called KBR:

The case of an alleged $2 billion government contract fraud/abuse in Iraq/Afghanistan

In this case, it appears that we could have better served those, who are serving US!

The case of an alleged $2 billion government contract fraud/abuse in Iraq/Afghanistan

A company providing services to our troops in Iraq and Afghanistan has allegedly committed $2 billion in fraud and abuse. Until recently, it was part of Halliburton (spun off after a stock swap)?

Donna Borak, of the AP (courtesy of SignOn San Diego) reports:

U.S. lawmakers on Thursday railed against defense contractor KBR Inc. for a string of fraud and contract abuses on a multibillion-dollar contract that provides food and shelter to U.S. troops in Iraq.

“I think profiteering during wartime is inexcusable,” said Sen. Byron Dorgan, D-N.D., during a Senate Armed Services Committee hearing. “We've got a very serious problem. This is the most significant waste, fraud and abuse we have ever seen in this country.”

Here are more specifics as to what occurred, quoting Senator Levin, chairman of the Senate Armed Services Committee:

Sen. Carl Levin, D-Mich., chairman of the committee, cited several examples of contract abuse, including KBR billing the federal government for millions of meals that were never delivered, overstating labor costs by 51 percent, or $30 million and wasting between $40 million and $113 million by purchasing unnecessary vehicles.

Full story from the AP, here.

The thought of a company being made independent (via a stock swap) and charges of wrongdoing being brought forth, shortly afterwards, bothered me. I decided to look a little further to see what I could find about how this occurred.

I found a site called Halliburton Watch, which did an article entitled, Halliburton bails out of Iraq, KBR and now America. The article (which alleges a lot of other wrongdoing by Halliburton) links to the press release from Halliburton about the KBR spin-off, here.

The stock swap was announced in February. Since it would be hard to skim $2 billion from a $20 billion contract (granted over 5 years) in two months, I decided to see what else I could find.

Going to Senator Levin's site, I found a press release, clearly indicating that the alleged fraudulent activity occurred well before February.

After stating that KBR (formerly Halliburton) should be considered innocent until proven guilty, there seems to be a lot of substance to these charges, researched by government auditors. It will be interesting to see how this plays out, and fraud in time of war (if proven), should be dealt with severely!