updated 11/13/2007 8:01:14 PM ET 2007-11-14T01:01:14

In what some see as another bureaucratic absurdity after Hurricane Katrina, FEMA is refusing to pick up the cost of restocking New Orleans' aquarium because of how the new fish were obtained: straight from the sea.

FEMA would have been willing to pay more than $600,000 for the fish if they had been bought from commercial suppliers. But the agency is balking because the Audubon Aquarium of the Americas went out and replaced the dead fish the old fashioned way, with hooks and nets. That expedition saved the taxpayers a half-million dollars but did not comply with FEMA regulations.

"You get to the point where the red tape has so overwhelmed the process that there's not a lot you can do to actually be effective," Warren Eller, associate director of the Stephenson Disaster Management Institute at Louisiana State University, said of FEMA's actions.

Katrina knocked out power to the tourist attraction at the edge of the French Quarter in August 2005, and the staff returned days four days later to find sharks, tropical fish, jellyfish and thousands of other creatures dead in their tanks.

Aquarium officials wanted to reopen the place quickly. So even before the $616,000 commitment from the Federal Emergency Management Agency came through, they sent a team on an expedition to the Gulf of Mexico, the Florida Keys and Bahamas, where they caught 1,681 fish for $99,766.

Despite the clear savings, the dispute has dragged on for 17 months.

"FEMA does not consider it reasonable when an applicant takes excursions to collect specimens," FEMA quality control manager Barb Schweda wrote in a 2006 e-mail. "They must be obtained through reputable sources where, again, the item is commercially available."

Facilities cannot be improved upon
FEMA's refusal to reimburse the aquarium is grounded in the Stafford Act, the federal law governing disaster aid that has been criticized as inadequate for Katrina recovery. The Stafford Act says facilities can only be returned to their pre-disaster condition, not improved. Under those rules, the aquarium would have to buy fish of the approximate age and size of the lost specimens.

State experts and others counter that acquiring thousands of duplicates in the marketplace is nearly impossible, and a waste of public money.

"You can go out in the commercial market and buy a clownfish. You can also go out and capture it. And if you're capturing fish to fill an aquarium, it is much more cost-effective. Talk about being good stewards of the taxpayer dollar," said Rick Patterson, a specialist with James Lee Witt Associates, a firm that mediates Louisiana's disputes with FEMA. The firm is led by Witt, FEMA director during the Clinton administration.

Mark Smith, a spokesman with the Governor's Office of Homeland Security and Emergency Preparedness, complained that all too often, FEMA does not reward innovation or cost-saving ways to rebuild.

"It's relatively typical that when Louisiana, or an applicant, finds a unique way to solve a problem that FEMA comes in and throws a flag and says, `No, you can't do that,'" Smith said.

Local officials have complained that FEMA has applied the rules with maddening literal-mindedness, insisting on itemizing smashed buildings down to every last light fixture, doorknob and hinge when awarding rebuilding aid.

Bob Josephson, FEMA's director of external affairs in Louisiana, was alerted to the case by The Associated Press and reviewed it recently. He suggested FEMA may have made a mistake, but did not promise quick resolution.

"There are approximately 35,000 projects in the system and although we work very hard to ensure we get them right the first time around, undoubtedly, some will be misjudged," he said.

Followed FEMA directions
About a dozen aquarium staffers went fishing, snorkeling and scuba diving between January and May 2006, catching tiny highhat fish, yellowtail snapper, jackfish and others. The staffers worked 12-hour days but put in for only eight hours a day, according to invoices.

The catch was placed in a 1,000-gallon tank fitted to a flatbed trailer for the trip to New Orleans. TV crews and a local newspaper reporter tagged along on some trips but paid their own bills.

Most of the fish were caught in Florida waters for one-fifth the price charged by online vendors and specialty stores — suppliers FEMA recommended using.

"That is exactly the most prudent way to do it," Steve Feldman, spokesman for the Association of Zoos and Aquariums, said of the fishing trip.

The aquarium also received donations from other institutions, including stingrays from Sea World in Orlando, Fla.

With the aquarium's 900,000 annual visitors a linchpin of the city's tourism-dependent economy, the state asked FEMA in May 2006 for rebuilding help for the private institution even though the fish had already been caught. It is not unusual for the state to ask for assistance after a project has been completed.

Most of aquarium staff laid off
The fish were put on display in mid-2006 and have proved to be healthy. But the aquarium had to lay off 80 percent of its workers after Katrina and attendance is only 70 percent of what it was before the storm, spokeswoman Melissa Lee said.

"When those numbers drop, the revenue drops," she said. "That's money that could go to feeding animals and increasing staff. That's money we need back from FEMA."

The firm mediating the dispute has pressed on with its effort to secure FEMA help, arguing that salmon hatcheries in Oregon and lab rats in Texas were replaced with FEMA money after disasters hit there in 1994 and 2001.

The New Orleans case has been appealed to FEMA offices in Texas and Washington. The dispute could wind up in federal court.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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