Disaster Relief Needs Oversight to Stop Waste & Fraud

Associated Press photo of Harvey Flooding Port Arthur, TX
Associated Press photo of Harvey Flooding Port Arthur, TX.

Aggregated by AuxBeacon News Staff

[Editor’s Note: Abuse and reprisal problems within Civil Air Patrol lead to it often being in need of money. Nick Schwellenbach, Director of Investigations at POGO, has written a piece that multiple AuxBeacon readers would like to have echoed to the membership. ]

by Nick Schwellenbach | POGO

“Despite an outpouring of community support and neighborly charity, large natural disasters require billions of dollars in aid from the federal government for short-term and long-term needs such as housing, cleanup, and infrastructure rebuilding. The aid is spent directly by federal agencies like the Federal Emergency Management Agency (FEMA), funneled to state and local governments, and outsourced to contractors.

The potential for waste and fraud is great. In an annual report issued in 2012, the Justice Department’s Disaster Fraud Task Force stated that

“In cases related to Hurricanes Katrina, Rita and Wilma alone, the task force through FY 2011 prosecuted 1,439 individuals in 47 federal districts throughout the country. These prosecutions involved a wide variety of fraudulent activity, including charity scams, government and private-sector benefit fraud, identity theft, contract and procurement fraud, and public corruption.”

Despite his lack of experience, Charles Henderson held himself out to GSA and FEMA as the owner of an ambulance company, i.e., (CHCI) and able to provide properly equipped ambulances and qualified staff to operate them. According to the government, after winning the FEMA contract Henderson and his company quickly cobbled together relationships with subcontractors who were able to provide some ambulances and personnel, but not enough of either. However, CHCI proceeded to bill FEMA for ambulances it never provided. On September 4, 2005—six days after Katrina struck New Orleans—CHCI billed for 19 ambulances when it actually provided 11. On September 10, CHCI charged FEMA for 66 ambulances but only provided 27.

FEMA took them at their word and overpaid, according to the lawsuit. The government accused CHCI of bilking taxpayers of nearly $2 million.

Charles Henderson settled the lawsuit in 2011 by agreeing to pay the government nearly $3 million.

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