Mel Evans  /  AP
Home appliances damaged by Hurricane Katrina sit in front of homes in New Orleans on Tuesday. Residents are placing damaged items along the streets for pickup.
updated 10/18/2005 5:41:04 PM ET 2005-10-18T21:41:04

Louisiana Gov. Kathleen Blanco pledged Tuesday to have auditors auditing auditors to ensure “transparent and wide open” accountability for billions of dollars in federal aid to rebuild her hurricane-devastated state.

Testifying to two House Transportation Committee panels via teleconference from Baton Rouge, Blanco said she intends to hire a national accounting firm to audit all federal recovery spending in Louisiana, and then hire another such firm to verify the first. She said she also has directed the state recovery authority she created this week to set up an audit committee to oversee all federal spending.

“I expect to account for every single penny of federal money that is received by the state of Louisiana,” she said.

Blanco was responding to concerns raised by some in Congress about sending billions of dollars in federal aid to a state with a history of political corruption. Sen. Larry Craig, R-Idaho, for example, told a home state newspaper last week that fraud was part of the culture of Louisiana.

“The financial affairs of Louisiana will be transparent and wide open as it pertains to this period of recovery, more so than it ever has been before,” Blanco said.

Congress already has provided $62 billion in emergency relief for Louisiana, Mississippi and Alabama, after Katrina roared through in August, followed by Rita in September. Louisiana lawmakers have proposed another $250 billion in federal outlays to help the state recover.

The Bush administration agreed Tuesday to let the Army Corps of Engineers rebuild the New Orleans levees to their pre-Katrina condition without requiring state and local governments to share the costs. The decision does not cover any enhancement of the levees.

Billions needed to improve levees
Corps officials have estimated it will cost $1.6 billion to rebuild the levees to their pre-Katrina condition and $5 billion more to enhance them to protect against a Category 5 hurricane. Louisiana officials are pushing for the enhancement, which Congress has not yet authorized.

Blanco was joined by New Orleans Mayor Ray Nagin and Lt. Gov. Mitch Landrieu in pledging that federal money will be spent wisely and in complaining that Louisiana is being treated differently than other states that have experienced natural or manmade disasters.

“Louisiana does not have a corner on the market in terms of public corruption,” said Landrieu, citing seven governors who have been indicted in the past decade. He also noted that the Justice Department’s public integrity section has prosecuted hundreds of cases in states nationwide.

“Just as no member of Congress would like to have themselves painted by the actions of a few, nor do the people of Louisiana.” Landrieu said.

Rep. Richard Baker, R-La., told the panel that accountability is a primary goal of his proposal for a presidentially appointed Louisiana recovery corporation to oversee the redevelopment. He said the agency would be financed by U.S. debt obligations, rather than congressional appropriations, and could be partially repaid.

Communities to control redevelopment
Once New Orleans’ levees and public utilities have been rebuilt and its environment restored, Baker said the agency would acquire damaged residential and commercial property, restore it to economic viability and package it for resale and development.

He said the redevelopment would be controlled by local communities and would include both mixed use and subsidized housing. Homeowners could either take a cash settlement for their damaged property or reserve their right to rebuild in the same area after cleanup is completed.

“There is great concern ... that bulldozers will run, people’s property will be taken, and they will be dispossessed from their communities and unable to return,” Baker said. “This proposal will not do that.”

The Association of Community Organizations for Reform Now said Tuesday it has signed up 1,600 Katrina evacuees in cities across the country for the ACORN Katrina Survivors Association. The group, which hopes to have more than 100,000 members within a year, plans to lobby state and federal leaders for the right to return to their neighborhoods and for a rebuilding effort that emphasizes helping displaced poor and minority residents of New Orleans.

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