As long as there are disasters, there will be scam artists who prey upon the vulnerable. In New Orleans, that amounts to about 217,000 potential scams in the residential sector alone.
Uncle Sam has YOU Footing the Bill
But what about federally awarded contracts that affect taxpayers across the board?
After Katrina, the Bush administration relied upon no-bid private contracts worth billions in the recovery efforts. In September of 2005, Henry Waxman and Nancy Pelosi introduced the “Hurricane Katrina Accountability and Clean Contracting Act” (H.R. 3838), stating: “We cannot allow greed, mismanagement, and cronyism to squander billions of taxpayer dollars.”
Bush rejected the oversight bill promising, “We’ll make sure your money is being spent wisely. And we’re going to make sure that the money is spent honestly.” And so the taxpayer once again fell victim to the “Lucy Van Pelt” syndrome.
As of June 30, 2006, over $10.6 billion had been awarded to private contractors for Gulf Coast recovery. $10.1 billion of that amount was awarded in 1,237 contracts valued at $500,000 or more. Only 30% of these contracts were awarded with full and open competition.
One example of the misuse of federal subcontractors involved the “blue roof” program. Anyone who has been through a hurricane is familiar with the blue plastic tarps that provide temporary protection from rain damage. In the days immediately after Hurricane Katrina, FEMA and the Army Corps of Engineers entered into contracts with three large contractors, the Shaw Group, Simon Roofing, and LJC Construction, to cover damaged roofs with blue tarps. Because so many layers of contractors took a cut of the funds, the fees charged to taxpayers were vastly inflated. According to one published account, the costs to the taxpayer under the tiered contracts were sometimes 1,700% higher than the job’s actual cost. A second account reported that the taxpayer paid an average of $2,480 per roof for a job that should cost under $300.17. (Source: http://oversight.house.gov/documents/20060824110705-30132.pdf)
In addition, FEMA’s own website published what amounts to a “How-To” guide for fraudulent contractors stalking federal contracts. How To Market To FEMA (http://www.fema.gov/business/market.shtm) offers 25 tips for increasing success in the quest for government bids. Tip number 22 advises the contractor with a shaky consumer rating to “Clean up your performance rating -- Get copies of how agencies evaluated you. Clear up any inaccuracies, and try to counteract negative information with positive ratings from other jobs. List best references first in your proposals.”
In other words, pad the resume and when that fails, lie.
Tip number 17 suggests the contractor: “Accept the government credit card -- and mention it in all of your literature. The government buys more than $5 billion in goods and services annually with the purchase card. Most COs will choose the purchase card over the paperwork to make a buy.”
This tip is especially interesting after reviewing the House Report on waste and fraud after Katrina. The report specifically cites the government credit card program as a source of abuse. In 1994, Congress passed legislation allowing federal employees to use credit cards to buy small amounts of goods or services directly from vendors. These charge card programs were designed to make routine purchases easy while avoiding the requirements of contracting regulations.
According the House Report: “Examples of credit card abuse at FEMA include the unnecessary purchase of 2,000 sets of canine booties at a cost of more than $68,000, the expenditure of $8,000 for a 63” plasma screen television, and the purchase of 20 flat-bottomed boats — only eight of which FEMA has in its records — at twice the retail price. According to auditors, “There were procedure violations in 83% of these transactions.”
And so it goes.
Psychologist Erich Fromm, writing on love and freedom, noted that the human situation requires some sense of control over one’s destiny. We are born against our will, die the same way, and live our lives helpless “before the forces of nature and society.” Unity and trust with other human beings is the only way out of this prison of doubt and uncertainty—and the aftermath of Katrina certainly exposed the seedy underbelly of society as a flood of opportunists in the form of scam artists washed over Louisiana, some with the blessing of FEMA and the Bush administration.
Louisiana Citizens:The Louisiana Attorney General’s Consumer Protection Hotline can be reached at (800) 351-4889.
The Louisiana State Licensing Board for Contractors can be reached at 225-765-2301
