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Congress Scrambles to Deal With Katrina 'Sticker Shock'

Who should keep an eye on the vast amount of money spent to rebuild? At least seven plans are put forth, some of which may harm oversight.

October 09, 2005|T. Christian Miller | Times Staff Writer

WASHINGTON — So much money is at stake in Hurricane Katrina rebuilding that even the watchdogs are at issue in the dogfight over how best to spend the federal largess.

Republicans and Democrats have rushed forward no fewer than seven proposals, each purportedly the best way to scrutinize plans for the $63 billion set aside for recovery efforts -- a sum expected to grow soon.

But in typical Washington fashion, watchdog groups say, some proposals for scrutiny will actually weaken oversight, and competition among them might delay monitoring. Spending now approaches $300 million a day.

"We have so much money going to so many different agencies that I think there is great opportunity for misuse of funds and mismanagement and even, unfortunately, fraud," said Rep. Jim Kolbe (R-Ariz.), who has proposed designating a special inspector general for Katrina spending. "We need to move as quickly as possible."

For The Record
Los Angeles Times Wednesday October 12, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 50 words Type of Material: Correction
Hurricane Katrina -- An article in Sunday's Section A about congressional proposals to increase oversight of spending to rebuild after Hurricane Katrina said Halliburton was among companies that received no-bid contracts for reconstruction. In fact, Halliburton's contracts were competitively bid. Also, the article referred to Halliburton Co. as Halliburton Corp.

The sudden interest by a Congress not known for its commitment to oversight is a reflection of the ballooning cost of hurricane relief, lessons learned from Iraq and growing unease in Republican circles about recent political scandals, according to politicians and analysts.

The oversight proposals -- which include a spending czar or expanding the role of the inspector general overseeing Iraq's reconstruction -- coincide with corruption accusations against high-ranking Republicans.

Rep. Tom DeLay (R-Texas) was indicted recently by a Texas grand jury on felony charges related to campaign financing, forcing him to step down as House majority leader. The Pentagon's inspector general, Joseph E. Schmitz, resigned last month amid accusations that he quashed investigations of powerful political appointees of President Bush. And the Bush administration's top contracting official, David H. Safavian, was indicted Wednesday on charges that he lied to investigators about a 2002 golfing trip with top GOP lobbyist Jack Abramoff, who was indicted in August on unrelated federal fraud charges.

And the bill for Katrina is expected to grow by billions, according to several Hill sources.

"There is sticker shock," said John Hart, a spokesman for Sen. Tom Coburn (R-Okla.), who has proposed creating a chief financial officer responsible for all relief spending. "It comes after Iraq. We have a time of war, rising deficits, Medicare and Social Security" shortfalls.

Watchdog groups said the need for additional oversight for Katrina rebuilding -- one of the largest such government programs in U.S. history -- was unquestionable. Total hurricane damages might top $200 billion.

Already, congressional officials have raised concerns about a deal to pay Carnival Cruise Lines up to $236 million to house hurricane evacuees. Questions also surround no-bid contracts given to politically connected firms such as Halliburton Corp.

Much of the money to rebuild has been approved with no clear plans for how it will be spent.

"The early indicators are not good," said Beth Daley, a spokeswoman for the Project on Government Oversight. "It looks like FEMA is doing a very poor job of spending money wisely."

Several oversight proposals focus on strengthening the roles of inspectors general, the officials assigned to federal agencies to prevent waste, fraud and abuse.

But with legislative delays, "time is wasting on these things," said a U.S. official observing the process. "If we don't get down there soon, all the water will have drained out of New Orleans and so will all the money."

Hurricane legislation already passed has added $15 million to Homeland Security Inspector General Richard L. Skinner's office. Homeland Security has coordinated much of the relief effort.

Skinner told a congressional panel last week that he and counterparts in several agencies were working together, with 300 auditors and investigators committed to the effort.

Skinner signaled that he wanted more money but thought it unnecessary to create additional fraud watchdogs. A proposal by Rep. Kendrick B. Meek (D-Fla.) would give Skinner another $15 million, plus 40 more employees.

"We need to call out some of these contractors that have been abusive," said Meek, the ranking minority member of the Homeland Security oversight subcommittee. "People are very frustrated throughout the country by story after story of contractors taking advantage of the American taxpayer."

But other Republicans and Democrats have said they oppose expanding Skinner's bureaucracy for a temporary event like the hurricane.

In addition, some critics worry Skinner cannot effectively oversee all of the involved agencies, which include the Army Corps of Engineers and the Federal Emergency Management Agency.

Several people have instead proposed expanding the duties of the special inspector general for Iraq, Stuart W. Bowen Jr., who monitors reconstruction efforts there.

That would allow for a quick start-up and oversight across all the agencies, and Bowen's role would end at the completion of hurricane rebuilding, proponents said.

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