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Katrina Relief Funds: What happened to the money?

By Jesse Muhammad
Staff Writer | Last updated: Jan 25, 2007 - 9:58:00 PM

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A sign for a relief center set up for victims of hurricane Katrina at the Church of God in Vancleave, Mississippi, Sept. 8, 2005. The U.S. House of Representatives approved $51.8 billion in Hurricane Katrina emergency funding, even as lawmakers began to fret loudly over the staggering costs of the relief effort. The aid bill, approved by 410-11, is the second tranche of Katrina emergency funds passed. But with estimates of the costs of Katrina now approaching $200 billion, Republicans and Democrats expressed reservations about the runaway spending, and called for the appointment of an official to oversee and manage Katrina-related federal aid. NICHOLAS KAMM/AFP/Getty Images

NEW ORLEANS (FinalCall.com) - In the aftermath of Hurricane Katrina, a big question that still lingers is, “What happened to the money?” Music entertainers, movie stars, prominent leaders, elite organizations and foreign nations, all contributed billions of dollars in Katrina aid to federal agencies such as the Federal Emergency Management Agency (FEMA). But with survivors of one of the world’s greatest natural disaster still being evicted, facing constant deadlines, struggling to find jobs, filing complex paperwork and slowly returning to their storm-torn cities, many have not received what was promised to them in order to rebuild their homes and their lives.

Over the last year, FEMA has became a four letter word often used by survivors when venting out frustrations, and now Louisiana state officials are taking on the weight of the heightened tension by residents, city leaders, and parish leaders who have voiced complaints about the crawling pace of the storm recovery. Much of the growing tension between state and local officials in Louisiana stems from delays in federal programs that were established to reimburse local officials for a number of infrastructure projects, including road repairs, public building construction and debris removal.

FEMA has paid the state of Louisiana roughly $5.1 billion to reimburse local officials for infrastructure projects following Katrina, but only about $2 billion of that money has reached communities nearly 18 months after the storm that had 80 percent of the city of New Orleans under water. Other towns were wiped off of the map entirely.

Where is the rest of money?

“Most of the complaints I get from my staff now have to do with holdups at the state level,” said Aaron Broussard, President of Jefferson Parish. His parish is waiting for the state to release the $20 million in relief funds that his parish is owed out of the $50 million that FEMA approved for this type of rebuilding public assistance projects.

Governor Kathleen Blanco’s Road Home Program has been the target of unceasing criticism since its inception, from politicians, community leaders, weary residents and homeowners. They complain that what was presented as a solution to the problem, has become another headache.

The Road Home Program is designed to help residents of Louisiana affected by Hurricanes Katrina or Rita, get back into their homes as quickly and fairly as possible. Being the largest single housing recovery program in U.S. history does not impress the citizens who have staged several marches and rallies on the steps of the State Capital to demand that they “pick up the pace.” Nearly 96,000 people in Louisiana have applied for the Road Home federal grants of up to $150,000, but the money has only reached about 100 applicants so far. In November of last year, 10,000 Road Home award letters were mailed out to Louisiana families informing applicants of the amount and type of funding for which they were eligible.

“There are still thousands of homeowners who have applied to the program and are awaiting their awards,” said Michael Taylor in a Road Home press release. He serves as director of the Disaster Recovery Unit in the Office of Community Development. “We will not rest until all Road Home applicants have their awards in hand.”

Road Home program grants are administered separately from FEMA’s public assistance payment, but both programs have received complaints of slow funding, long bureaucratic processes, lack of communication, and empathy towards the urgent needs of the people. Local leaders have to decipher and file large amounts of paperwork before FEMA agreement to pay, and the Governor’s Office of Homeland Security and Emergency Preparedness conducts a final independent review of each project’s proposed expenditure before the money is released.

Col. Jeff Smith, head of the Gov.’s Homeland Security Office, stated on www.nola.com that his office is exploring ways to speed up the reimbursement process. But the state, he stressed, can’t release the money without performing its own checks on the projects.

The state’s audits haven’t uncovered any fraud, but have identified “numerous cases where prices charged were not supported by market value,” Mr. Smith said. “I think we’re doing a pretty doggone good job, despite what you’re hearing,” He also suggested that FEMA may be deflecting blame for funding delays.

“I don’t think anybody wins here,” he said, “but at some point we’ve got to speak out.”

The finger pointing between the federal, state and local officials continues. New Orleans officials briefed reporters recently, documenting their complaints about FEMA. One document that was distributed was a chart called, the “circle of futility” to send a message that city recovery is not the focal point of FEMA and is, “out of the loop” of important matters.

“We’re basically running out of money,” said Mrs. Cynthia Sylvain-Lear, Mayor Nagin’s deputy chief administrative officer. “We’ve got to get the reimbursements in.”

FEMA: The outpouring of funds?

In its 69th week’ Hurricane Katrina Mississippi Recovery Update released on December 21st, FEMA officials reported that in partnership with Mississippi Emergency Management Agency (MEMA), they have obligated more than $9.4 billion in disaster aid to Mississippi. Approximately $1.1 billion has been approved for public assistance (PA) programs such as emergency protective measures; repairing public buildings, restore public utilities and repair roads and bridges.

To date, a small amount in the form of $918 million has been disbursed to PA applicants by MEMA. More than 200,000 individuals and families have been approved for housing assistance totaling more than $848 million, and 134,000 Mississippi Hurricane Katrina survivors have been approved for more than $412 million, in other needs assistance.More than $1.3 billion has been approved for debris removal including nearly $222 million for marine debris and $790 million for land-based debris. In addition, more than $2.6 billion in U.S. Small Business Administration loans have been approved for Mississippians.

“That word ‘approved’ is deceiving because it makes many people to think that we have received those funds, but it’s only an illusion,” stated Mark Hudson, a native of New Orleans who now resides in Houston, Texas. “They can approve a trillion dollars, but if it never reaches the people then it’s all just a lie!”

What about the large influx of foreign aid? As the flood disaster of August 2005 left its mark on American history, nations from abroad showed their concern by pouring in hundreds of millions of unspent donations meant to assist the U.S. federal government get survivors back on their feet.

China chipped in $5 million, Brunei gave $1 million, Bangladesh sent $1 million, Rwanda wired $100,000, and Afghanistan pitched in $99,800. The United Arab Emirates was the biggest donor, contributing more than $99 million. By the end of 2005, the U.S. State Department had received $126 million from 36 countries and international organizations. Countries such as Canada, Kuwait, India, Turkey and others chose to send donations directly to the American Red Cross or the Bush-Clinton Hurricane Katrina Fund. A similar stance was also taken by music artist such as Jay-Z, Kanye West and Ludacris who spoke out against FEMA, opting to give their money directly to organizations who they felt were truly servicing the displaced and heartbroken people.

Out of the $126 million received by the State Department, $66 million was granted to the United Methodist Committee on Relief (UMCOR), a nonprofit program born out of the United Methodist Church. With the funds, UMCOR established Katrina Aid Today, a partnership of nine national aid agencies dedicated to case-management work for Katrina evacuees. Katrina Aid Today case managers assisted nearly 28,800 families as of Oct. 31, 2005 (roughly 75,000 people), according to a recently released fourth quarter report. The agency said affiliates working on long-term recovery with survivors of Hurricane Katrina virtually doubled the number of families helped since its last report in July, and continues to open about 1,000 new cases each week or 200 cases per day. To date $13 million has been disbursed and allocated almost exclusively to salaries and training for caseworkers, not to evacuees. Part of the Katrina Today Grassroots Alliance is A.C.T.I.O.N. CDC based in Houston which to date the CDC has disseminated nearly $300,000 in assistance to help make families from New Orleans whole again.

“The Honorable Minister Louis Farrakhan stated that the Millions More Movement would make the Gulf Coast area the centerpiece of the Movement itself,” stated N.O.I. Southwest Regional Minister Robert Muhammad, founder of A.C.T.I.O.N. “We will continue to make our word bond and everyone who has received funds to assist our people must be held accountable. That includes all levels of government and all organizations. We must service the people.”