Video: Hurricane spending fears

updated 9/28/2005 8:24:53 AM ET 2005-09-28T12:24:53

A day after castigating the federal government’s ousted disaster chief, a House panel is hearing pledges from government auditors that they will closely examine millions of dollars in contracts the Bush administration awarded to politically connected companies for Hurricane Katrina relief.

The inspectors general from half a dozen agencies, as well as officials from the Government Accountability Office, on Wednesday were addressing a House subcommittee on the Katrina cleanup and announcing several new audits to combat waste and fraud.

They are pledging strong oversight that includes a review of no-bid contracts and close scrutiny of federal employees who now enjoy a $250,000 — rather than a $2,500 — purchase limit for Katrina-related expenses on their government-issued credit cards.

“When so much money is available, it draws people of less than perfect character,” H. Walker Feaster, inspector general of the Federal Communications Commission, said. “It underscores the need for internal controls of the money going out.”

The joint appearance of government auditors comes amid a flurry of legislation pending in Congress that would create additional layers of oversight to the Katrina contracting and award process.

'Culture of cronyism'
It also comes amid growing charges of favoritism that critics say led to government missteps in the wake of the Katrina disaster. In a House hearing Tuesday, both Republicans and Democrats assailed former Federal Emergency Management Agency Director Michael Brown, who critics say lacked proper experience for the job, for his performance in handling emergency aid.

“The Bush administration’s culture of cronyism comes at the expense of public safety,” House Minority Leader Nancy Pelosi, D-Calif., said. “It is unconscionable and must stop immediately.”

Brown admitted making some mistakes but placed the brunt of the blame on the Louisiana governor, the New Orleans mayor and even the Bush White House that appointed him.

Rep. Christopher Shays, R-Conn., said Wednesday that while Brown made mistakes, so did others. “He can’t be the scapegoat. First responders are local and state, and the governor and mayor did a pathetic job of preparing their people for this horrific storm,” Shays said on NBC’s “Today” show.

At the same time, Shays said, “there was a huge void” and Brown “became a strict constructionist and didn’t want to fill in that void.”

Lucrative contracts
On Wednesday, lawmakers turned their attention to the lucrative Katrina contracts.

In the weeks after the Aug. 29 storm, more than 80 percent of the $1.5 billion in contracts awarded by FEMA for Katrina work were handed out with little or no competition or had open-ended or vague terms that previous audits have cited as being highly prone to abuse.

They included contracts such as a $16 million deal involving Halliburton subsidiary Kellogg, Brown & Root Services Inc. of Arlington, Va., that has been cited for overcharging the government for work in Iraq; and San-Francisco-based Bechtel Corp. Both companies have strong ties to the Bush administration.

Primary oversight falls to the agency IGs and the GAO, the auditing arm of Congress, but critics have said that isn’t enough. The various proposals, including ones from Republican Sen. Susan Collins and Pelosi, the House Democratic leader, call for a specially appointed IG who would oversee all the various agencies’ work.

But in their testimony Wednesday, the inspectors general said additional review was unnecessary. The GAO and Homeland Security Department IG Richard Skinner have said they would look closely at the no-bid contracts that may have been unfairly awarded based on political connections.

Pentagon auditors also announced a broad-scale review of their defense contracts. The measures include sending teams of auditors to the Gulf Coast to monitor reconstruction efforts.

Investigators also will carefully examine whether federal employees have been abusing government-issued credit cards since their purchase limits were hastily raised to $250,000 to help pay for hurricane-related expenses.

Previous government audits have shown that the credit cards, which typically have a purchase limit of $2,500, were improperly used to pay for prostitutes, gambling activity and even breast implants. About 250,000 federal employees have the government credit cards.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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