"Dedicated to exposing the lies and impeachable offenses of George W. Bush"

Katrina: Gov't Failure, Private Fraud
February 14, 2006

(CBS/AP) As a congressional report blamed government-wide ineptitude for mishandling the Hurricane Katrina relief effort, a government accounting report called out misspending on hurricane efforts and the Justice Department announced widespread hurricane-related fraud.

The 600-page report by a special Republican-dominated House inquiry into one of the worst natural disasters in U.S. history concluded that "Katrina was a national failure, an abdication of the most solemn obligation to provide for the common welfare. At every level – individual, corporate, philanthropic, and governmental – we failed to meet the challenge that was Katrina."

Excerpts from a draft of the report, which is due for release Wednesday, obtained by CBS News said "a blinding lack of situational awareness and disjointed decision making needlessly compounded and prolonged Katrina's horror."

CBS News correspondent Bob Fuss reports that the draft report said President Bush's Homeland Security team didn't analyze or act effectively on the information it had after Katrina hit, that Homeland Security Secretary Michael Chertoff failed to do what he was supposed to and that the federal government "stumbled" into its response for the first several days after Katrina came ashore.

The report is being released as Chertoff announced wide-ranging changes to the nation's embattled Federal Emergency Management Agency.

The former FEMA chief likely will get a grilling from the Senate Homeland Security and Governmental Affairs Committee, which was going to hold a hearing on the subject on Tuesday. Late Monday, that hearing was postponed; a new date for the hearing has yet to be announced.

Sen. Susan Collins, R-Maine, will be leading the questioning of Chertoff. Does she see Chertoff keeping his job?

"That's not my call," Collins said. "That's the president's call."

One question Senators are hoping to get answered, reports CBS News correspondent Sharyl Attkisson, is why Chertoff was a full day late in knowing about New Orleans' levee breaks.

The changes against FEMA in the report range from creation of a full-time response force of 1,500 new employees to establishing a more reliable system to report on disasters as they unfold.

They are the first steps to overhauling FEMA, which was overwhelmed by the Aug. 29 Gulf Coast storm.

Monday, federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes. Forty people have pleaded guilty so far, according to the latest report by the Hurricane Katrina Fraud Task Force. Many defendants were accused of trying to obtain emergency aid, typically a $2,000 debit card, issued to hurricane victims by FEMA and the American Red Cross.

Chertoff – who has been the target of much of the criticism of the federal response to the hurricane – rejected criticism that his agency is preoccupied with terror threats, at the expense of preparing for natural disasters like Katrina.

"I want to tell you I unequivocally and strongly reject this attempt to drive a wedge between our concerns about terrorism and our concerns about natural disasters," Chertoff said.

His strong defense of his agency came in response to criticism by ex-FEMA chief Michael Brown and others.

Chertoff spoke at a gathering (RAW video) of state emergency management directors meeting in suburban Alexandria, Va. He responded to what he said were "people taking the position that DHS sees itself as a terrorism-focused agency" and that there's a "huge difference" between man-made and natural disasters.

Brown, who resigned under pressure as FEMA head, told a Senate committee last week he told the White House and Homeland Security officials on Aug. 29, the day Katrina hit, that major flooding was under way and a levee had been breached.

But both President Bush and Chertoff said previously that they were unaware of the levee breach until the next day, Aug. 30.

The failure of the levee system led to the catastrophic flooding of the city of 500,000 people.

"I want to be clear, as the secretary of homeland security I am accountable and accept responsibility to the performance of the entire department, good and bad," Chertoff said.

"I also have the responsibility to fix what went wrong," he added.

Chertoff suggested that time was of the essence, noting that June 1 looms as the start of another hurricane season.

He pledged "a hard, honest look at what we can do to improve our response capability."

Democrats on the House Homeland Security Committee issued their own recommendations Sunday for changing FEMA, including having the agency's director report directly to the president during major disasters. They also said the director should be an experienced emergency manager.

White House homeland security adviser Frances Fragos Townsend also was expected to discuss parts of her upcoming review about the federal response to Katrina.

In its rush to provide Katrina disaster aid, the Federal Emergency Management Agency wasted millions of dollars and overpaid for hotel rooms, including $438-a-day lodging in New York City, government investigators said Monday.

Meanwhile, two other reports released by the Government Accountability Office and the Homeland Security Department's office of inspector general detail a series of accounting flaws, fraud or mismanagement in their initial review of how $85 billion in federal aid is being spent.

The two audits found that up to 900,000 of the 2.5 million applicants who received aid under FEMA's emergency cash assistance program — which included the $2,000 debit cards given to evacuees — were based on duplicate or invalid Social Security numbers, or false addresses and names.

Thousands of additional dollars appear to have been squandered on hotel rooms for evacuees that were paid at retail rather than the contractor's lower estimated cost. They included $438 rooms in New York City and beachfront condominiums in Panama City, Fla., at $375 a night, according to the audits.

The two audits were released by the Senate Homeland Security Committee as the panel wrapped up its investigation into the federal government's preparation and response to the disaster.

The FEMA changes follow the results of a House inquiry that found unheeded warnings, poor planning and apathy in recognizing the scope of Katrina's destruction led to the slow emergency response from the White House down to local parishes.

The House GOP report said the federal government's response to Katrina was marked by "fecklessness, flailing and organizational paralysis."

The House findings mark the first of two congressional inquiries and a White House review of the storm response expected over the next six weeks.

Among the planned changes at FEMA:

# Tracking trucks carrying food, water, ice, blankets and other emergency supplies by satellite to ensure they arrive at disaster sites quickly and with enough equipment.

# Sending FEMA employees to emergency shelters and other temporary housing venues to register victims for aid, instead of relying on victims to register by phone or the Internet.

# Creating a database of already-approved private contracting firms from disaster regions to remove debris and provide services faster.

# Creating "reconnaissance teams" to report disaster conditions to Homeland Security and FEMA operation centers within hours, and improving communication channels to ensure the information quickly gets to the president and Cabinet-level officials.

# Hiring up to 1,500 new full-time employees as year-round coordinators.