Katrina Contractors Cheated Taxpayers
It now appears that a number of contractors who were paid billions of dollars for post-Hurricane Katrina cleanup have cheated the federal government out of large sums of money. Many of these contractors actually double-billed the government for debris removal, overstated mileage claims to get extra fees, and inflated prices by improperly mixing debris. Representative Henry Waxman, ranking Democrat on the House Government Reform Committee, compiled a telling report that was released last month. In the report, the U.S. Corps of Engineers was cited for lax oversight of contractors. The report said contractors sometimes billed twice for removing the same debris. In other cases, they took advantage of extra payments of $2 per cubic yard for debris carried more than 15 miles. Auditors found mileage was overstated in more than 50% of the 303 trips they examined. All of this should be criminal - if it's not - under the current laws in place. According to the report, contractors fraudulently mixed green waste with construction and demolition debris to inflate their billings by $2.84 per cubic yard.
Other instances of fraud found by auditors included double billing for housing trailers and abuse of government-issued credit cards. In blaming the Corps, the report said the Army's officials "regularly credited contractors with hauling more debris to dumps than they actually carried." The Corps also was blamed for allowing inflated charges in more than $300 million in contracts for temporary roof repairs using blue plastic sheeting. Interestingly, the government has indicted several contractors on fraud charges. It will be interesting to see how that goes.
While Congress has approved more than $63 billion for disaster relief, recovery expenses may ultimately top $200 billion. Thus far, many of the contracts have been awarded without taking competitive bids. Government officials at a hearing before the committee claimed that these contracts are being replaced with competitive awards. One committee member says that the sole-source contracts allowed an "unprecedented opportunity for fraud and mismanagement." It is bad enough to have all of the misery and loss - of both life and property - without having contractors cheating the government agencies involved in the clean-up. This is difficult to even comprehend and must be dealt with harshly. If you are aware of any such misconduct by contractors, contact us at Lumpkin & Reeves.
Source: Associated Press
