Hearing of U.S. Senate Committee on Banking, Housing, and Urban Affairs "Rebuilding Needs in Katrina-Impacted Areas"
Statement of Richard Shelby
Before we turn our attention to discussing the rebuilding needs of areas
impacted by Hurricane Katrina, I would like to highlight how troubled I am by the reports of the
massive amounts of fraud and waste associated with disaster assistance to hurricane victims.
While recognizing the dilemma of acting quickly, I believe we must do more to minimize the
opportunity for fraud.
That said, I think these troubling events also underscore the fact that disasters often bring out the
best and worst of human behavior. While in the face of tragedy, many people rose to the
challenge and performed countless acts of sacrifice and assistance, others chose a lessor path, and
took advantage of the victims and those trying to assist them.
Unfortunately, we have seen that such greed and mismanagement did not end in the immediate
aftermath of the hurricane. We are still hearing that there some preying on the victims of Katrina
through rent gouging and construction scams. Additionally, many still fall through the cracks of
an often too uncaring and unresponsive bureaucracy.
At this point, the fraud, waste and abuse compound the difficulties of those who have survived
this tragedy by making it harder for them to repair and move on. Going forward, we need to take
a measured approach to ensure that we do best to prevent any further fraud so that we can meet
the commitments we have made to help the victims recover.
Out first priority in this effort is to determine what steps have been taken to this point, as well as
to assess the nature of the region's remaining needs.
Beyond the particular facts associated with the Gulf Coast, today's hearing also offers the
Committee an opportunity to examine the respective roles of state, local and federal government,
as well as the principles of disaster assistance and recovery.
Perhaps the most important lesson from the overall initial response to Hurricane Katrina was a
lack of clear lines of responsibility. Without such clear responsibility it is all to easy to simply
point fingers. I believe it is vital we not make the same mistake in rebuilding the Gulf region.
In the process of rebuilding, it is also critical to not lose sight of what cannot be rebuilt.
Hurricane Katrina claimed over a thousand lives. We can, and must, assure that rebuilding does
not continue to encourage families to live in harm's way. Thus, to simply rebuild the Gulf region
as it was, where lives remain at risk, would be a tremendous mistake.
As this Committee moves forward in evaluating the programs under its jurisdiction, I hope to
establish on the record a clear accounting of where and how existing funding is being spent.
To this end, the Committee continues to examine the National Flood Insurance Program. Over
$23 billion in flood insurance pay-outs will go to rebuilding homes in the Gulf states. In
addition, $11.5 billion in Community Development Block Grant funds has been appropriated to
assist in rebuilding. I believe it is the responsibility of this Committee to closely examine how
those funds are being used and assure that they are reaching the intended recipients effectively.
While this Committee retains primary jurisdiction over housing and community redevelopment, a
variety of programs outside this Committee's jurisdiction will play significant roles in rebuilding
the Gulf. Included in these are the over $1 billion in Low Income Housing Tax Credits recently
allocated to the Gulf states. In addition, SBA's home disaster loan program is an important tool
for helping families rebuild their homes. Rather than reacting in a piecemeal fashion, I believe
this Committee must look at the various tools for rebuilding in a holistic manner.
Guiding these decisions should be the individual choices of families displaced by Hurricane
Katrina. Federal assistance to rebuild must be focused upon helping those who cannot help
themselves. Federal assistance should also support the functioning of the private market. I
believe efforts to superimpose a one-size-fits-all centralized solution would do more harm than
good. We must bear in mind that the policy choices we make today will have real long term
consequences, not only for the Gulf States, but also for future disaster recovery efforts.
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