Two Years After Katrina, Billions in Relief Funds Are Missing

The federal government has promised more than $116 billion in recovery aid, but residents of the still-devastated Gulf Coast wonder whether the check bounced.

• Washington set aside $16.7 billion for Community Development Block Grants, one of the two biggest sources of rebuilding funds, especially for housing. But as of March 2007, only $1 billion -- just 6 percent -- had been spent, almost all of it in Mississippi. Following bad publicity, HUD spent another $3.8 billion on the program between March and July, leaving 70 percent of the funds still unused.
  
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• The other major source of rebuilding help was supposed to be FEMA's Public Assistance Program. But of the $8.2 billion earmarked, only $3.4 billion was meant for nonemergency projects like fixing up schools and hospitals.
  
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• Louisiana officials recently testified that FEMA has also "low-balled" project costs, underestimating the true expenses by a factor of four or five. For example, for 11 Louisiana rebuilding projects, the lowest bids came to $5.5 million -- but FEMA approved only $1.9 million.
  
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• After the failure of federal levees flooded 80 percent of New Orleans, the U.S. Army Corps of Engineers received $8.4 billion to restore storm defenses. But as of July 2007, less than 20 percent of the funds have been spent, even as the Corps admits that levee repair won't be completed until as late as 2011.
  

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This article is taken from the new report compiled by the Institute for Southern Studies called, "Blueprint for Gulf Renewal," giving a voice to grassroots advocates calling for greater federal accountability in the Gulf Coast rebuilding process. The report is available at: http://www.southernstudies.org/BlueprintShort.pdf.