A look into labor abuses in the aftermath of Hurricane Katrina

Photo courtesy of Ruffit at Flickr

It never ceases to amaze me that we keep seeing additional allegations of abuse, fraud and waste come to light as a result of the Katrina hurricane, and it's aftermath.

Brian Beutler of the Media Consortium (courtesy of AlterNet) wrote a pretty telling article of the abuses dealt to laborers, who went to New Orleans to assist in the reconstruction/clean-up effort.

Brian reports:

In the two years since the disaster, there have been thousands of testimonials -- issued to both government officials and private advocates -- about a wide taxonomy of abuses.The most frequent complaint workers cite is withheld wages, but almost as numerous are accusations of employee intimidation, toxic and hazardous working conditions, immigrant abuse, trafficking, exploitation and monetary extortion.

Many workers, who went to New Orleans were paid a small percentage of what they were promised:

On December 30, 2005, Wilson received $865 in pay for the 94 hours of work he did from November 20, through Dec 7. For a similar stretch between January 5 and January 18, he was paid only $206.10. In each case, he should have been paid about $1,500.

According to the article, the Bush Administration suspended affirmative action and documentation requirements for immigrant workers. They also removed the requirement to pay "prevailing wages."

The end result of this was that visiting American citizens and local residents were underbid by foreign workers, who probably weren't legal. Of course, no one can say this for sure because it wasn't checked out (very well) at the time. However if this wasn't the case why did Senator Mary Landrieu (Democrat LA)request that ICE agents be dispatched to look into the problem?

This resulted in even more people doing a dirty job not getting paid:

The result was astounding. On payday, subcontractors, faced with undocumented workers seeking cash, often called ICE to report their own operations, causing frightened workers to either scatter or face deportation to their home countries without pay.

Likewise, employee recruiters, dispatched by subcontractors to foreign countries, would offer often-destitute men and women the promise of good work and fair wages at any number of reconstruction jobs in New Orleans.

Congressman Dennis Kucinich held hearings into this to determine, whether or not the Department of Labor (DOL), did their job in controlling some of this abuse.

Many believe, they did not.

For those, who like me continue to be fascinated by the social issues in the Katrina disaster, Brian's full article can be read, here.

My personal opinion is that they need to be studied, carefully. A lot of citizens (and apparently non citizens) suffered, not because of a lack of resources, but because of what appears to be a "few greedy people."

I've written quite a bit about Katrina (in my own personal study of what went wrong). My previous posts can be read, here.

Another great place to learn more about the social issues surrounding Katrina is Margaret Saizan's Beyond Katrina.

Washington Post exposes another reason why Katrina victims are still suffering

The hurricane disasters, and their commentary on social issues, continue to amaze me. To me, the rest of the world can learn a lot by studying the ongoing problems related to the disaster.

The amount of money wasted, or lost to fraud (over a billion and growing) is a sad commentary, when a lot of the victims are still living in the now (infamous) FEMA trailers.

Now a new allegation is being brought forth, which is that $854 million in aid promised by our allies, wasn't even accepted. I find this pretty interesting as people are suffering nearly two years, afterwards?

Even more shameful was that expert search and rescue personnel, were turned down, immediately after the hurricane, when they probably would have been extremely helpful:

And while television sets worldwide showed images of New Orleans residents begging to be rescued from rooftops as floodwaters rose, U.S. officials turned down countless offers of allied troops and search-and-rescue teams. The most common responses: "sent letter of thanks" and "will keep offer on hand," the new documents show.

This fact, given the problems in the initial response, amazes me.

Original Washington Post article, here.

I wonder how our allies, many of who have accepted similar aid from us in the past, felt when we turned their generous offers down?

More recently, the Post is reporting that Congress intends to look into this. The article regarding this can be read, here.

I'm not sure when the story on Katrina will be over. The bottom line is that there are still a lot of hurricane victims, who could use a helping hand. A good place to learn more about this is Margaret Saizan's site (Beyond Katrina), which can be seen, here.

How much of our Social Security money is benefiting former illegal aliens in Mexico?

With predictions that Social Security might be bankrupt before many of us ever receive any benefits, money potentially being given to people not entitled to it, bothers some people.

Dr. Jerome R. Corsi (WorldNetDaily.com) just did a very eye-opening analysis of the problem, where he states:

Amid the U.S. government's acknowledgment of rampant document and benefit fraud, the Federal Reserve is wiring 26,000 Social Security payments every month to Mexicans south of the border.

Officials with the Federal Reserve and Social Security Administration insist payments are not going to illegal aliens but admit they cannot be certain. Meanwhile, the Department of Homeland Security has launched a new task force to address the "growing" problem of benefit fraud, including in the Social Security Administration.

I like the official statement that no payments are going to illegal aliens, but they can't be certain?It seems to me that if they were certain, they might HAVE do SOMETHING about it.

I sometimes like to examine the money trail, which is what anyone wanting to determine fraud should follow, and according to the article:

According to the Federal Reserve, in 2005 the amount of funds transferred to Mexico reached more than $30 billion, up from $16.6 billion in 2004. The remittance market to Mexico has experienced double-digit growth in recent years.

Even scarier, was what is termed a totalization agreement with Mexico, that Social Security refused to release until forced to by an advocate group for senior citizens:

As WND previously reported, after refusing to release the document for three and a half years, the Social Security Administration in January finally made public a totalization agreement that "would allow millions of illegal Mexican workers to draw billions of dollars from the U.S. Social Security Trust Fund."

The disclosure was forced by a Freedom of Information Act request filed by the TREA Senior Citizens League, a non-partisan seniors advocacy group.

This hasn't been signed into effect by President Bush, but it could be done without congressional approval.

Dr. Corsi sums up this analysis using factual data from the GAO:

In September 2003, the U.S. General Accounting Office estimated a Social Security totalization agreement with Mexico would cost $78 million in the first year and would grow to $650 billion (in constant 2002 dollars) in 2050.

The GAO admitted even this estimate was low given that the totalization agreement provides an additional incentive for millions more Mexicans to enter and work in the United States.

Dr. Corsi's highly interesting analysis (I highly recommend reading the entire article), here.

So far as the officials, who aren't certain if fraud is occurring, they might want to consider the amount of benefits fraud, recently uncovered in the Katrina and Rita hurricanes. Initially, officials seemed to be in denial (not certain) about how much of it happened there, also. After the GAO did a little digging, they seemed to find quite a bit of it - and rumor has it - they aren't finished finding all of it.

Benefit fraud is a huge problem, and it costs us all in the form of higher taxes. It also takes away from the funds available to pay honest people, who are entitled to receive them.

Here is another post, I wrote about the scope of this problem in a limited area (Southern California):

Los Angeles Grand Jury Calls Child Care Program an ATM for Thieves

The official ICE press release about the government task force looking into this problem can be seen, here.

Should recent prosecutions for fraud in Katrina remind us of something?

Bruce Alpert, of the Times Picayune did an excellent article about a lot of recent prosecutions for fraud in the aftermath of the hurricane disasters.

One woman, LaWanda Williams collected $267,377.15 in an identity theft scheme using several other people's information.

I wonder if any of the people (who had their information stolen) were denied benefits, as a result of LaWanda's activities?

And LaWanda is just one example of people's greed. FEMA and Army Corps of Engineers officials, Red Cross employees and many others took advantage of the situation.

In fact, fraud was being committed as far away as California, where 71 cases have been documented.

Bruce Alpert's article, here.

Bruce's article points out that this isn't the first time fraud occurred after a disaster. Similar fraudulent claims occurred after 9-11 and the Tsunami disaster.

The money lost to fraud is a symptom of the larger problem, which was a disaster preparedness system that failed. The resulting confusion enabled a lot of fraud to occur, and probably made it too easy to commit.

I doubt any of the people now being prosecuted thought they were going to be caught.

As the old saying goes - "an ounce of prevention is worth a pound of cure." Our focus needs to be towards preventing this from happening again.

If you would like to learn more about the hurricane disaster - and how how people are still being "cured" two years after the fact - Beyond Katrina has a lot of information on the subject.

Blaming FEMA for the fraud in Katrina isn't going to solve the problem

There is no doubt about it - the Katrina and Rita debacle - was NOT a shining moment in our nation's history. Fifteen months later as New Orleans prepares to celebrate "Fat Tuesday" (Mardi Gras), more allegations of fraud and mismanagement are coming to light.

Two reporters (Michelle Roberts and Frank Bass) of the AP wrote an interesting article about how FEMA now wants $300 million back in claims paid for households that didn't exist, according to official pre-hurricane census figures.

Even more interesting is that they did their own analysis using the federal Freedom of Information Act, which deducts that a lot more than $300 million might come out in the wash before all is said and done.

Here is what they said in their article:

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.

Full story (ABC news version), here.

While there is no doubt a big problem exists, we need to put the overall issues in perspective and I'm not sure FEMA is entirely to blame.

David Garratt, FEMA's deputy director is saying that officials were in a "no win" situation. And while, I'm not here to defend FEMA, he probably has a valid point.

When the federal government got involved, fraud artists from all over the world were setting their sights on what they saw as a "lucrative opportunity."

A lot of the fraud that occurred didn't necessarily come from the areas affected by the hurricane.

Couple this, with a lot of pressure to right all the initial blunders in the disaster, which most of us were watching "live," and mistakes were made.

Sadly enough, fraud prevention systems in place, were deemed to cumbersome and disabled. Again, there was a lot of pressure (rightfully so) to take swift action to help a lot of people, who were in harm's way.

We can blame FEMA all we want, but the fact is that fraud is growing at a rapid rate, and the federal government isn't the only one with inadequate fraud prevention systems.

For example, in Southern California (pretty far from Louisiana), there was another interesting article about the taxpayers footing a $1.5 billion a year bill for fraud, here.

And while there seems to be a lot of government fraud, fraud in the private sector is growing by leaps and bounds, also. There is no doubt that identity theft (another growing problem) helped fuel the fraud in the hurricane disasters.

There is a lot of evidence to suggest that much of this fraud is enabled by information that has been data-mined on all of us, which isn't protected very well. Some suggest that technology and the information sector, which make a lot of money selling their wares are the root cause of all of this.

Unfortunately, those committing fraud are too keenly aware of this.

Blaming FEMA is unlikely to correct the overall problem. And if their fraud prevention systems were inadequate, perhaps we should be looking at who sold them the faulty systems?

Perhaps, when history is written, the Katrina disaster is a warning of the looming disaster we all face if we don't stop viewing fraud as a "victimless crime."

Fifteen months later (as Mari Gras approaches), there are still a lot of people suffering from the hurricane disasters.

If you would like to learn more about this, Margaret Saizan's site (Beyond Katrina) is a great resource.

I wonder how much good the money would have done for the true victims if it hadn't been stolen from underneath them?

The Road Home for Katrina Victims is Frustrating

With all the allegations of "poorly spent money" in the hurricane disasters, it's become apparent that a lot of money hasn't reached the people, who need it.

For instance, take the "Road Home Program", which has paid a company called ICF International over $60 million to issue $4 million in checks. The program is intended to assist victims in getting back into "livable housing," and will manage the distribution of $7.5 billion in federal relief money.

ICF International is a "consulting firm" based in Fairfax, Virginia. According to Wikipeida, it's services have been used by the U.S. Environmental Protection Agency, the Department of Homeland Security, the Department of Energy, the United States Postal Service, and Housing and Urban Development.

The program has it's own website, which states:

The Road Home program was created by Governor Blanco, the Louisiana Recovery Authority, and the Office of Community Development. The program is funded by the U.S. Department of Housing and Urban Development.

There has been a lot of criticism that ICF has been slow to fill positions for the project. Interestingly enough, there are a lot of positions (still not filled) advertised on their website.

The Times Picayune did an excellent assessment of the lack of program staffing, here.

The "Road Home" website also states that it dispels a lot of myths about the program, but it appears not everyone is "buying their version" of what is going on.

Because of the allegations of "mismanagement," the Louisiana House and Senate have passed two resolutions to terminate ICF's $756 million contract. They are also calling for an investigation into "possible conflicts of interest."

The Times Picayune reported:

The House and Senate, in separate unanimous votes, also passed House Concurrent Resolution 34 by Rep. Cedric Richmond, D-New Orleans, ordering a special legislative panel of New Orleans lawmakers and the Louisiana Recovery Authority -- the state agency overseeing recovery operation in the state -- to investigate ICF's handling of the contract. It was amended by Rep. Jim Tucker, R-Algiers, to also urge the federal Securities and Exchange Commission to probe ICF's public stock offering, shortly after winning the state contract, for possible conflicts of interest.

The Times Picayune article, here.

Sue Sturgis, who writes for Facing South, has also written some interesting commentary on the program.

Ms. Sturgis points out that ICF initially was involved in a contract to help the state decide how to spend federal grant money, which conceptualized the "Road Home Program." During this time frame, ICF decided to seek the "lucrative program administration project."

When the Louisiana Board of Ethics raised concerns that this contract might be perceived as giving ICF an unfair advantage in getting the larger contract, ICF ended the initial one. The payout for the first contract was $900,000, while the Road Home Program could pay ICF up to $756 million.

She also brings out other concerns the Board had with some of the banking relationships that were being proposed by ICF to administer the funds.

Facing South article, here.

Whether conflicts of interest exist remains to be seen. What can be clearly seen is that taxpayer money intended to help Katrina victims isn't getting to those who need it very quickly.

Red tape and excuses aren't going to be acceptable when there are a lot of people still living in "not very nice" conditions.

And until this matter is rectified, there are going to be "voices" calling for some "accountability."

Some of these voices are getting pretty loud.

This month, federal investigators plan to release audit results on contracts given to "so called" politically connected firms in the Katrina crisis. Speculation has it that these audits are going to reveal additional concerns about how money was squandered in the Katrina aftermath.

More Allegations of Money Wasted in Katrina

Recently, I blogged about - whether or not - we would ever discover how much money was wasted in the Katrina disaster. Unfortunately, this statement is turning out to be more accurate that I would have liked it to have been.

Hope Yen of the AP is reporting:

Federal investigators have already determined the Bush administration squandered $1 billion on fraudulent disaster aid to individuals after the 2005 storm. Now they are shifting their attention to the multimillion dollar contracts to politically connected firms that critics have long said are a prime area for abuse.

In January, investigators will release the first of several audits examining more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.

Government officals (past and present) are now alleging that the dollar amount wasted could exceed $2 billion.

AP story (courtesy of the Washington Post), here.

It will be interesting to see how this plays out and what evidence is brought to light as a result of this.

The sad truth is that there are still a lot of people suffering as a result of this disaster. And it doesn't make sense that they should be when this kind of money was available.

Here is a post, I wrote about the results of a recent GAO (Government Accountability Office) audit:

Will We Ever Discover the True Losses in the Katrina Disaster?

Will We Ever Discover the True Losses in the Katrina Disaster?

The Government Accountability Office (GAO) has issued another report stating that the fraud losses in Katrina and Rita are a lot higher than previously disclosed to the public.

The report states:

• Almost $20 million in double payments was paid to people claiming damage to the same property in both hurricanes (Katrina and Rita).
• Almost $17 million in improper or fraudulent "rental assistance" payments given to people already receiving free housing.
• 500 foreign students received $3 million in aid.
• $156,000 was given to foreign workers on temporary visas.

Sadly enough, the report indicates that FEMA disabled a system (edit check in NEMIS) that would have caught people using duplicate information (social security numbers) to make claims in both hurricanes. In five of the six cases examined, the claimants didn't even have to provide proof that they had conducted repairs after receiving money for the first claim.

I have no personal experience with "edit check in NEMIS," but computers run pretty fast in today's world, and it doesn't make sense to me that an entire system designed to detect fraud was disabled?

Didn't we have enough personnel to do a manual check when duplicate social security numbers were noted? And even if this were so - why didn't FEMA take action (themselves) to identify the issues before the GAO investigated?

The use of other people's social security numbers is nothing new and probably could have been anticipated, fairly easily.

There is also a lot of missing equipment. The report shows that 34 percent of the property purchased to aid efforts has either been lost, or stolen. In the case of 2o flat bottom boats purchased - only two remain missing - however twice the retail price was paid to a vendor, who also failed to pay for 11 of the boats he sold to the government.

Even scarier, the report indicates that FEMA overstated the amount of found property reported in July hearings to Congress. This was based on an e-mail sent by DHS (Department of Homeland Security) on the eve of the hearings.

FEMA's estimate of the monetary impact of fraud in Katrina was $290 million, however if one is to believe the GAO report, the real losses surpass $1 billion.

With the stories that surfaced about prison inmates making claims and stolen information (social security numbers) being used in claims for addresses that were vacant lots - it's entirely possible that there is additional fraud that hasn't, or never will be discovered.

There were also a lot of stories of charities being defrauded and even fake charities being set-up. The GAO report only addresses the fraud losses incurred by the government.

GAO report, here.

Report Fraud, Waste and Abuse to the GAO, here.

FraudNET (Report Fraud, Waste and Abuse)

One might come to the conclusion that we wasted a lot of money on Katrina, but this is far from being true. In fact, a lot of people are still suffering as a result of these disasters, and the truth is that the money could have been used for better purposes.

I plan to explore this more in detail in future posts, but for now, I'll pass on a site that is devoted to the real victims in these disasters:

Beyond Katrina: The Voice of Hurricane & Disaster Recovery

The Hurricane Disasters are a Sad Commentary on Society

During the Katrina and Rita disasters, I blogged frequently about what appeared to massive amounts of fraud going on. Reuters is now reporting that the dollar loss has topped 1 Billion dollars, here.

From government employees to fake charities, it appears a lot of people took advantage of those less fortunate than them in their "time of need."

And not very much of the money seems to have been recovered despite well publicized efforts.

Sadly enough, the public awareness of all the fraud is also likely to make it harder for victims in future disasters. The bottom line is that people - who take advantage of others in their time of need - should suffer severe consequences.

Perhaps, a lack of consequences (common in fraud schemes) is the reason this occurred? To prevent this from happening in the future, we need to make sure there are severe consequences for those committing the fraud, as well as, those who enable it by a lack of oversight.

After all, we were in a state of emergency, when these disasters occurred.

I'm afraid the amount of fraud we've seen come out of these disasters - which affected a lot of innocent people - is a sad commentary on our society as a whole.

Let's hope we do a little better next time.

To read my previous posts on this matter, link here.