WASHINGTON – United States Senator Mary L. Landrieu, D-La., today warned against rushing to judgment in the evaluation of potentially improper disaster assistance payments. The Federal Emergency Management Agency (FEMA) has initiated efforts to recoup $643.3 million in improper disaster assistance payments to 168,000 individuals and households. The recoupment initiative comes in response to a Department of Homeland Security Inspector General report from December 2010. Landrieu, a member of the Homeland Security and Governmental Affairs Committee (HSGAC), spoke at a hearing held by HSGAC’s Subcommittee on
Disaster Recovery and Intergovernmental Affairs.
“We have a serious responsibility to curb government waste, fraud, and abuse, reduce the federal deficit, and reign in the national debt. Recoupment of improper payments is an important part of that effort,” Sen. Landrieu said at today’s hearing. “It’s important, however, that we not rush to judgment in condemning our fellow citizens who have experienced tragedy and loss as a result of disasters. Where fraud has been committed, we will target and prosecute it. There is a dangerous tendency among some lawmakers and members of the press to assume that an ‘improper payment’ is the same thing as fraud. Neither FEMA nor the Inspector General has been able to provide me with an estimate of how many of these 160,000 cases represent fraud. But we do know that thousands of the payments described as “improper” by the Department of Homeland Security Inspector General, went to people who were seriously affected by the disaster and used for urgent and legitimate needs.”
FEMA is seeking to recover approximately $621 million paid out in response to Hurricanes Katrina and Rita, which represents 97percent of the total money FEMA aims to recoup. A total of $7 billion was distributed to victims of those storms through the Individual Assistance program.
Sen. Landrieu joined Sen. Jeff Sessions, R-Ala., in cosponsoring the Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 2007 (P.L. 110-179), which increased the maximum prison sentence for disaster fraud from 5 to 30 years and authorized fines up to $1 million. As of September 2010, the Department of Justice Hurricane Katrina Fraud Task Force had convicted 1,096 people of disaster fraud associated with Hurricanes Katrina, Rita or Wilma in 2005; 264 others were either acquitted or the charges against them were dismissed.
“Many of the families facing recoupment are honest disaster survivors, facing incredible challenges, who never intended to misuse funds or accept money to which they were not entitled,” said Sen. Landrieu. “It’s noteworthy that $18 million of the funds in question were reported to FEMA by the disaster survivors themselves after they received duplicative insurance payments. There is also a blanket assumption that recoupment of improper payments will save the federal government money. I am not entirely convinced that is true in this instance, and here’s why.
“Neither FEMA nor the Inspector General seem to have any data available on the relative benefits and costs of previous recoupment efforts. Nor have they indicated whether they plan to measure the cost-effectiveness of recoupment going forward. I look forward to learning about the steps FEMA has taken to prevent future improper payments, and the potential impact of House-passed spending cuts on the IT systems that protect against fraud.”