Analysis: Officials question FEMA storm payouts

MIAMI, Dec. 23 (UPI) -- Politicians in Florida and elsewhere are calling for a change in the way disaster aid is awarded by the Federal Emergency Management Agency.

It started in Florida with the revelations that $29.2 million went to residents of Miami-Dade County for Hurricane Frances. The problem with that is that the storm hit 100 miles north of the county on Labor Day weekend and almost no damage was reported in the media.

Dan Craig, FEMA's head of recovery operations, defended his agency.

He said Thursday there is a long list of procedures to be completed before payouts are made, and then they are checked later to find any mistakes.

"First and foremost, every person must sign a form that the damage was caused by a disaster," he said.

He said everybody who applies for assistance undergoes an inspection.

He said there are also restrictions on payments. Home replacement is limited to $10,200, and the maximum for total damages is $25,600.

He also said they have inspectors looking at each others' work, and payments to independent inspectors can vary as much as 10 percent up or down. Computers are also checked for glitches.

Craig said the agency works hand in hand with the inspector general of the parent Homeland Security Department.

He also said reports that the agency paid for a funeral, but nobody died, are wrong.

"There has been a death. It was certified. Those cases are hand checked," he said.

He said because of the privacy act, the deceased cannot be identified publicly.

"They're talking about fraud without actually knowing what happened," he said.

Four hurricanes -- Charley, Frances, Ivan and Jeanne -- hit Florida over a six-week period in August and September. Insurable damage is estimated at $42 billion, and the remainder is what FEMA is paying.

The problem is that Miami-Dade County is somewhat hurricane savvy because of Hurricane Andrew, a monster storm that hit south of Miami and caused $20 million in insurable damage on its own.

Officials believe that many saw an open door they could use to make money.

"I think it's time to go and put this problem on the table and deal with it -- past time," said Sen. Jeff Sessions, R-Ala.

FEMA has awarded disaster aid to areas not hit by disasters, such as Mobile, Ala., for storms last summer, and Miami for hurricanes this fall, an investigation by the South Florida Sun-Sentinel has found.

Rep. Brad Miller, D-N.C., said residents of three counties in his state collected $6.7 million for Hurricane Frances, a storm that local emergency managers said did not cause any significant damage.

Miller told the Fort Lauderdale newspaper it looks like "there's pretty serious fraud going on." Those suspicions are afoot in Miami-Dade County also.

"What the Sun-Sentinel investigation shows is that not only has there been widespread fraud in Florida, but the entire FEMA payment process is infested with fraudulent payments," said Rep. Robert Wexler, D-Fla.

The Department of Homeland Security's inspector general has started an investigation of fraudulent FEMA claims in the Miami-Dade area.

Rep. Tom Foley, R-Fla., whose district was devastated by the hurricane when it hit Palm Beach, Martin and St. Lucie Counties, said that was a good move.

"Too many people in Florida have lost their homes and had their lives altered forever for us to allow crooks to siphon money away," Foley said. "It's an outrage that in Florida's time of greatest need, frauders and con artists would use it as an opportunity to line their own pockets."

Richard Skinner, deputy inspector general of Homeland Security, said he expects indictments soon.

"I am pleased to see the Department of Homeland Security's inspector general taking up the investigation and hope we see results," Foley said.

"For months, I have called on FEMA to account for the millions of dollars in aid we worked so hard to secure and which was so drastically needed throughout Florida," he said.

FEMA said it had dispatched seven investigators to Florida and more may be assigned. The Justice Department and the Florida Department of Law Enforcement are also involved.

But some officials believe that the barn door is being closed after the horse is gone.

"Are you going to go get the TVs back?" asked Tom Gallagher, Florida's chief financial officer.

"I guarantee you that money's not around anymore. Are you going to put them all in jail?" asked Gallagher, who is in charge of insurance regulation.

There were about 13,000 claims in Miami-Dade County after Frances hit 100 miles north of there.

Those that were successful resulted in new cars, wardrobes and thousands of televisions and appliances.

Skinner said his investigators have found some legitimate damage in the county, some of it to roofs.

The problem is not believed to be confined to Miami-Dade County, and it's already become apparent it's not confined to Florida.

In Mobile, Ala., Emergency Management Director Paulette Williams said the problem is national in scope.

FEMA sent Mobile residents $29.5 million for flooding in 2003, despite several letters and phone calls from Williams telling officials there was no flood damage in Mobile County.

In North Carolina's Bladen County, residents collected $2.5 million for a storm that emergency management officials said caused no damage.

In Detroit there were payouts of $33.9 million for storms in May and June that officials barely remember.

Rep. Alcee Hastings, D-Fla., said he plans to introduce a bill to modify procedures used in approving disaster claims.

Alabama's Sessions wants oversight by an independent entity.

He said that could eliminate any conflict of interest and provide the tighter controls that are needed.

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