Brownback, Roberts Call for Audit on Federal Disaster Assistance Funding

Press Release

U.S. Senators Sam Brownback (R-KS) and Pat Roberts (R-KS) today sent a letter to the Secretary of the U.S. Department of Housing and Urban Development requesting an audit of funds allocated to certain Gulf States following Hurricane Katrina.

Brownback said, "Taxpayers have a right to know where and how federal relief money is being spent. Recent reports indicate that Louisiana planned to spend hundreds of millions of dollars, some it possibly from federal disaster assistance funding, to entice a private company to move to Baton Rouge. This is unfair to other states, like Kansas, which do not have the benefit of using federal money to woo corporations."

Roberts said, "We must know all of the facts to ensure that funds are not being misspent at the expense of our state."

Yesterday, Congressman Todd Tiahrt (R-KS) held a press conference at which he also called for an audit of the expenditure of the disaster assistance funds.

Full text of the senators' letter is below:

The Honorable Shaun Donovan

Secretary of Housing and Urban Development

U.S. Department of Housing and Urban Development

451 7th Street S.W.

Washington, DC 20410

Dear Mr. Secretary:

We write to request an audit of the funds allocated through your department for economic development in the wake of Hurricane Katrina. We are concerned by persistent allegations that such funds are being used to entice companies from other states to relocate to Louisiana in violation of federal laws and regulations and against the intent of the Congress.

Hawker Beechcraft, a Wichita, Kansas-based aircraft manufacturer, recently informed its employees union that it is considering a move to Louisiana after that state offered significant financial incentives. Recent reports indicate Louisiana is prepared to spend $400 million to bring Hawker Beechcraft to Baton Rouge. This is a particularly large sum in the context of reports that Louisiana faces the prospect of a $1.6 billion deficit in next year's budget and is considering deep cuts in state spending.

Congress has provided Louisiana with large sums of federal disaster assistance money in response to Hurricane Katrina, including $14.5 billion in Community Development Block Grant (CDBG) funds through the Department of Housing and Urban Development. On average, Louisiana has received about $3 billion per year in CDBG funding, or a sum roughly equal to ten percent of Louisiana's annual budget. We must ensure that such large amounts of federal assistance do not end up helping one state at the expense of another state. We believe it is possible, however, that Louisiana is leveraging federal money to lure Hawker Beechcraft out of Wichita, Kansas.

Congress, in fact, has taken steps to prevent the threat of what is commonly referred to as "job pirating." Section 588 of Public Law 105-276 prohibits the use of CDBG funds "to assist directly the relocation of any industrial or commercial plant, facility, or operation, from one area to another area, if the relocation is likely to result in a significant loss of employment in the labor market area (LMA) from which the relocation occurs." We therefore request that you audit the use of CDBG funds provided to Louisiana and determine whether there are violations of federal job-pirating statutes.

In addition, we ask that you take steps to ensure that any unobligated balances of CDBG funds for Louisiana disaster relief, as well as any future disaster relief CDBG funds Congress may appropriate, are spent consistent with federal laws, regulations and the intent of Congress.

We appreciate your attention to this matter and your commitment to ensure a level playing field between states.

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