Letter to David M. Walker, Comptroller General of the United States

Letter

Representative Miller Joins Call for Oversight of Hurricane Katrina Relief Funds

Representative Miller wants resources for relief and rebuilding delivered immediately to the Gulf Coast. At the same time, he wants to ensure that those resources are not squandered on wasteful contracts for well-connected lobbyists. That's why Miller today joined House Democratic colleagues in requesting that the General Accountability Office monitor contracts in real time and report waste, fraud, abuse, or mismanagement as they occur -- not after the money has already been spent.

September 13, 2005

The Honorable David M. Walker
Comptroller General of the United States
Government Accountability Office
441 G Street NW
Washington, DC 20548

Dear Mr. Walker:

We are writing with an urgent request. Immediate and intensive GAO oversight is essential to protect the interests of the taxpayer and to ensure that hurricane relief funds actually reach the victims of Hurricane Katrina.

Federal funds will soon be flowing into New Orleans and the Gulf region in enormous sums. To date, Congress has approved over $62 billion in emergency funding for Hurricane Katrina recovery. Ultimately, costs are expected to rise to over $100 billion or more.

We fully support these hurricane relief efforts. The federal government should act quickly and generously to meet the needs of the hurricane victims and their communities. Our concern is that, based on its track record, the Administration may be incapable of spending these federal funds effectively or responsibly.

The history of this Administration's handling of federal contracts is one of persistent and costly mismanagement. Under this Administration, the value of no-bid contracts has skyrocketed. Oversight of federal contracts has been turned over to private companies with blatant conflicts of interest. And when government auditors and whistleblowers do flag abuses, their recommendations are often ignored.

In Iraq, billions have been appropriated for the reconstruction effort, yet oil and electricity production remain below prewar levels. Waste, fraud, and abuse appear to have squandered hundreds of millions of taxpayer dollars. The contracting strategy adopted by the Administration suppressed competition on thousands of reconstruction projects, while favored companies like Halliburton received special treatment and lucrative monopoly contracts.

Domestically, the record is no better. The FBI spent $170 million on a "Virtual Case File" system that does not work. The Department of Homeland Security has spent another $200 million on a border-monitoring system of cameras and sensors that reportedly doesn't work. And the contract to hire federal airport screeners has been plagued by poor management and flagrant abuses.

Already there are danger signs involving the contacts for recovery and rebuilding of the devastated Gulf Coast. Last week, the Administration signed two $100 million contracts with the Shaw Group, a client of former FEMA Director Joe Allbaugh, to assist in recover efforts. Halliburton, which has repeatedly overcharged the taxpayer in Iraq, has already received contracts for repair work at three Navy facilities in Mississippi. And the emergency relief bill passed last week allows federal officials to make purchases worth up to $250,000 per transaction on government-issued credit cards.

Moreover, the first act of contracts relating to Hurricane Katrina was awarded without competition and on a cost-plus basis. This is the same flawed contracting strategy that produced disastrous results in Iraq.

Compounding these problems are contracting weaknesses at FEMA. In March 2004, the Department of Homeland Security Inspector General found that FEMA's "numerous deficiencies in its recording keeping" may have adversely impacted the agency's "ability to adequately account for new contracts awards and other acquisitions. The Inspector General also concluded that "FEMA had inadequate controls to ensure that its acquisition workforce… can function according to federal regulations." In May 2005, the Inspector General testified before Congress about these deficiencies in FEMA's contract oversight procedures.

Aggressive and independent oversight will be essential if the interests of the taxpayer are to be protected. That is why we are supporting the creation of an anti-fraud commission to oversee the federal spending and protect against waste, fraud, and abuse. We are also asking GAO to do its part. We urge you to take the extraordinary step of establishing a team of experienced auditors and investigators to monitor the contracts and spending for the recovery, relief, and reconstruction of the Gulf Coast in real time. We ask that this team be directed to report evidence of wasteful spending, abuse, or poor contract management as it occurs - not after the fact - so that Congress can intervene as needed.

Thank you for your attention to this request.

Henry A. Waxman, Nancy Pelosi, Steny H. Hoyer, James L. Oberstar, Bennie G. Thompson, David R. Obey, John D. Dingell, George Miller

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