Transcripts

FEMA's Plan to Ferret Out Fraud

GHARIB: Good evening everyone. New Orleans took two giant steps in getting back to business today. Its airport re-opened to commercial flights and its port received the first cargo shipment since hurricane Katrina devastated the Big Easy. The slow signs of recovery came amid promises from the White House and FEMA to learn from their mistakes and intensify their efforts to help the victims. As we continue our ongoing series, "Recovering from Katrina," Washington Bureau Chief Darren Gersh says the government is already on the lookout for fraud.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Homeland security chief Michael Chertoff sounded like a man trying to strike the right balance between chasing down fraud and helping out victims of hurricane Katrina.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: The message has gone out very clearly to everybody that we are going to be efficient. We're going to cut through red tape, but we're not going to cut through the laws and the rules that govern ethics.

GERSH: Congress has already given the FEMA Inspector General's Office an extra $15 million to be a watchdog over disaster assistance spending. So far, the record is mixed at best. In Florida, after hurricane Frances hit last year, investigators found FEMA may have given out $30 million dollars to individuals who suffered little or no damage. The federal government's performance now will largely depend on the private sector, since FEMA hires contractors to evaluate and process claims for individual losses.

BILL JENKINS, GOVERNMENT ACCOUNTABILITY OFFICE: So FEMA's role is not actually doing the inspections themselves, but the oversight and quality assurance of that program. But it doesn't actually go out and make the inspections and make the decisions about what people actually ought to get.

GERSH: In cleaning up after Katrina, the potential for waste, fraud and abuse is enormous. FEMA will easily spend ten times as much money than on any previous disaster. And in many cases the neediest victims may not have a driver’s license or other critical documents normally required to verify eligibility for government benefits.

GREGORY SHAW, INSTITUTE FOR CRISIS, DISASTER & RISK MANAGEMENT, GEORGE WASHINGTON UNIVERSITY: I think we're going to err on the side of getting the money to the people who need it, and with some level of dignity. And we'll worry about the consequences after the fact. But I also think that we will develop some real processes at all levels of the organization for making sure that the waste, fraud, and abuse are minimized in the future.

GERSH: Some experts in emergency management say the amount of fraud uncovered after previous natural disasters has been small compared with the scale of the devastation. Even so, every dollar stolen or wasted is a dollar not available to help real victims. Darren Gersh, Nightly Business Report, Washington.