FEMA reduces initial disaster aid after fraud

Posted 7/24/2006 11:00 PM ET

By Mimi Hall, USA TODAY

WASHINGTON — Future disaster victims will get only $500 in immediate emergency aid from the government, which is imposing tighter rules to safeguard against the kind of rampant fraud that followed Hurricane Katrina, FEMA announced Monday.

Families received up to $2,000 after Katrina. Federal Emergency Management Agency Director David Paulison said the amount will be cut to limit temptation to spend relief money on anything but emergency needs.

"If you put $2,000 in someone's hands, that's a lot of money," Paulison said. He said the agency will also check the identities and addresses of victims before it doles out cash. "This is still going to be a compassionate organization," he said. "But we have to put checks and balances in place."

Congressional investigators have reported that FEMA lacked basic safeguards in various aid programs and lost as much as $1.4 billion to con artists and errors after Katrina hit the Gulf Coast on Aug. 29, 2005.

The new measures will ensure FEMA helps victims "in a more organized and disciplined way," Homeland Security Secretary Michael Chertoff said.

After Katrina, investigators reported that the agency handed out $2,000 debit cards without verifying the identities and addresses of those who received the cards. Investigators found that some people used the money on pornography, diamonds and vacations.

Among the changes:

•Victims will no longer be given debit cards. Instead, the $500-per-household allotment will be deposited into bank accounts or given out as checks.

•FEMA has hired a company to verify the identities of those applying for emergency aid. Paulison said the company will check names and addresses and make sure that two people from the same address haven't applied for the same aid.

•Victims will have to register with FEMA before moving into government-paid hotel rooms.

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