Hurricane Katrina Fraud And Waste To Reach 1 Billion

It is being said that already one billion USD has gone to waste. That figure is expected to go higher as more attention is put toward contracts awarded with little to no competition. Contracts were given to politically connected firms and extended. It is that that is what promotes waste. Currently half of the governments contracts at USD 500,000 or greater are no bid. Some are saying progress has not been made to stop the waste.



I know government waste has been around for a long time. I also know that every now and then someone comes along who actually cares enough to actually try to do something about it. I doubt this set of circumstances will be much different then any other. Some might be stopped but there are plenty of greedy people and crooks with there hands in the til and the politicians in there pocket. I do hope when the fraud is found that criminal charges will also follow.

Related News Links:
sev.prnewswire.com
www.sctonline.net
www.clarionledger.com
www.clarionledger.com

The overall waste is astronomical and I have no doubt the large corporations played a significant part in the entire debacle. However; as a resident of the region familiar with events during and after both Katrina and Rita, I tend to give some creditability to the GAO report (pdf.) from earlier this month.

Fraud by individuals and families represent a major portion of the estimated “wasted” funds. Our local new services still report weekly examples of this fraudulent activity. Some of the items and cases listed in the afore mentioned report given as examples are just as ridiculous as they are sickening.

Beyond the larger corporations and individual fraud…add in the factor FEMA can not track or locate large percentages of their purchases and/or assign items to purchase amounts…well…a potential two billion dollar waste estimate, imo, will continue to grow beyond if not double.


mg

Missed gear,
Thanks for letting us know your take on this issue. It is good to find out what some one thinks who is in the reagon.
It also brings me to ask, with all the money going out in waste do you see any of the familys that had to move comeing back at all? I saw that the state lost some 220,000 people per the census.

I see Bechtel is on the list. No surprise there.

The one time I worked with Bechtel, we were given pricing of approx. $700,000. They went over budget in one month on a 4 month project and continued to rack up hours and expenses without notification, in complete contradiction to our contract.

While auditing the bills and expenses I found numerous instances of double-billing hours and erroneous charges. We were billed for corkscrews, gum, new laptops and hard drives, passport photos and passports. Part of the contract stipulated that they had housing expenses of $155 per day, which included their laundry, and meal allowances of $50 per day. It was more like $50 per meal, they expensed us for laundry, and charged us $225 per day for hotels. To cut expenses, I had rented several apartments for some of them and was most annoyed when I received a bill from the property manager for towels that were stolen, furniture damaged and long-distance bills that hadn't been paid.

We were also billed for Canadian taxes that weren't applicable and that Bechtel didn't have registered tax numbers for. So glad we paid for that 15 hours they billed us for their tax 'experts' to do the requisite work.

Long story short - A $700,000 job turned into a $1.4 million job within 3 months and it wasn't anywhere near completed. We gave notice that we wanted to terminate the agreement for non-performance, Bechtel threatened to sue our butts into the ground because that would have made them ineligible for US government contracts and after $50,000 in lawyers fees, we parted ways 'by mutual agreement' (sorry US taxpayers). Bechtel got $765,000 from us and we got a incomplete and useless report that wasn't anything close to what they had been paid to produce. Not to mention our totally screwed up timeline.

I can only imagine what kind of crap they would pull on contracts of this magnitude. :shk:



[edit on 26-12-2006 by Duzey]

Duzey,
Thanks for your post. There is a lot of good information there. I would just like to clarafy. You formerly did work for Bechtel? That is how you got this information?
If that is the case then you do know who was clling the shots for all the double billing and and taking all the extra money that was not actually being used for what it was intendef for, yes?

I never worked for Bechtel. I worked for a company had agreed to pay them to prepare a quote/price for a wrap-up contract for project management. It's a lot of work to prepare one of those on a large project and Bechtel doesn't provide them for free.

After paying the first few bills, my boss wanted to know why they were so much higher than they were supposed to be. The bills had absolutely no detail, just a total amount and where to send payment. I requested a detailed billing and hard copies of all of the back up and went through over 1000 pages of timesheets, expense reports and receipts.

They bill you for everything. You get billed for the time they spent working on making an agreement to give a price. Then you get billed for someone to review the agreement. By the time you actually make an agreement to contract them to make a quote, you owe them money. Then they take twice as long to do the work using twice as many people and don’t bother to mention it until it's too late.

You also end up paying the living expenses for everyone who is working away from the office on the project and these guys expense everything and it gets approved. The gum was amusing to me as a Canadian because we had a government scandal a few years back and the headlines kept going on about this one politician expensing Dentyne. Why does everyone expense gum? It's a dollar, you cheap buggers!

The accounting and billing was also really sloppy. They don't seem to audit their billings at all and they are a bloody mess. I spent two weeks, full-time auditing 3 invoices. That only represents 3 months worth of work on a much smaller project than something like Katrina or Iraq. I can't even imagine how many man hours it would take the govt to do a complete audit on a project like that.

I did meet some really great people, however. Bechtel employees aren't inherently evil.


[edit on 26-12-2006 by Duzey]

Great thread RedGolem.

Excellent info Duzey.

But why did you pay them anything? Why not sue for breach of contract?

[I know, I know... BUT!]

Sue Bechtel? That sounds pretty nice, but would be a little bit like assaulting an insane asylum with a banana. It'd just be a waste of money considering the influence that company has in the federal government.

[edit on 12/27/2006 by cyberdude78]

Duzey,
Soficrow had it about right. From what you said it sounds like there must be a law broken some where. I was not thinking of sueing them but fileing a criminal charge might make them stop steeling from people.

Sue Bechtel?

It's pretty hard to raise finaincing when people know you are trying to sue Bechtel. The legal bills will cripple your cash flow and it would take years. It wouldn't make for an attractive investment. Best to cut your losses early and move on.

Even worse, you don't want to end up being sued in retaliation.

I understand the idea of suing Bechtel is about the principle of it, but from a business perspective it didn't make sense.

It would be worse if you were building a project in the US. Bechtel's influence could make government approval processes difficult. If anyone is going to sue them successfully, it would probably be a government.

RedGolem, I don't want to imply that they broke any laws and to my knowledge, they didn't.

Originally posted by Duzey

RedGolem, I don't want to imply that they broke any laws and to my knowledge, they didn't.

After paying the first few bills, my boss wanted to know why they were so much higher than they were supposed to be.

Duzey,
It just sounded like from that statment that there must have been a law broken some where. I will hope that some one some where will find some way get the government to crack down on them.

Originally posted by RedGolem
It also brings me to ask, with all the money going out in waste do you see any of the familys that had to move comeing back at all? I saw that the state lost some 220,000 people per the census.

For the sake of clarity, I predominately reside on the south eastern coast of Texas and work in the region(s) affected.

I am sure a portion of the "wasted money" is being skimmed off the top by the state government and the Greeks. Louisiana is a very, very corrupt state.

As to people moving away…I would have to rely on the recognized numbers…as I don’t really know the true answer. In the south western and central coast area of Louisiana hit by Rita, imo opinion they didn’t loose very many people to “out of state”. The communities I have seen really came together and helped each one another. That said, I’ve made countless trips to N.O. and there are huge areas of the city that do not appear as ‘they’ have even begun the clean-up from Katrina…even to this day.

On a side note, and perhaps pertaining to your question, there are now taco stands all over the place. Five years ago one would not have seen but a few, if any. So, imo, what they have lost in past residents N.O. has gained in a newer type of resident, primarily (and ironically) migrating to the recovery area for work and great money….

mg