CNN, June 14, 2006
WASHINGTON (CNN) — A $200 bottle of champagne from Hooters and $300 worth of “Girls Gone Wild” videos were among items bought with debit cards handed out by FEMA to help hurricane victims, auditors probing $1 billion in potential waste and fraud have found.
The cards — given to people displaced by Hurricanes Katrina and Rita — also bought diamond jewelry and a vacation in the Dominican Republic, according to the Government Accountability Office audit.
The GAO uncovered records showing that $1,000 from a FEMA debit card went to a Houston divorce lawyer; $600 was spent in a strip club and $400 was spent on “adult erotica products,” all of which auditors concluded were “not necessary to satisfy legitimate disaster needs.”
The GAO found that at least $1 billion in disaster relief payments by the Federal Emergency Management Agency were improper and potentially fraudulent because the recipients provided incomplete or incorrect information when they registered for assistance. (GAO report)
The GAO said the scope of the problem may be even larger, because it only looked at the validity of registration information and not at other forms of potential fraud.
FEMA acknowledged its shortcomings late Tuesday.
Spokesman Aaron Walker said FEMA has “revamped the registration process” and has a contract with a company that will verify immediately the identity and address of anyone for assistance.
The GAO concluded that FEMA was hoodwinked to pay for season football tickets, a tropical vacation and a sex change procedure. Prison inmates, a supposed victim who used a New Orleans cemetery for a home address and a person who spent 70 days at a Hawaiian hotel all were able to get taxpayer help, according to evidence that gives a new black eye to the nation’s disaster relief agency.
Rep. Charles Dent, R-Pa., made a brief reference to the sex change procedure, commenting, “I don’t understand how this could happen.”
GAO special agent John Ryan, while not elaborating on the incident, said that once an applicant receives the assistance, there’s no control over how it’s spent.