KAI RYSSDAL: In a way, you have feel a little pity. FEMA got clobbered last year for its slow response to Katrina. So it opened the checkbook and started giving away tens of billions of dollars in assistance. Food and transportation. Housing aid. . . . Carribean vacations. And season tickets to the New Orleans Saints. But I'm getting ahead of myself. Our Washington bureau chief, John Dimsdale, reports now on the questionable charges made to the taxpayers' account.
JOHN DIMSDALE: The Government Accountability Office says FEMA was hoodwinked out of more than a billion dollars from some imaginative people claiming to be victims of Hurricanes Katrina and Rita. Some claimants got both hotel-room reimbursement and multiple rental assistance checks at the same time, using addresses in cemeteries and names of prison inmates.
At a hearing of the House Homeland Security Committee, Pennsylvania Republican Charles Dent said he almost swallowed his toothbrush this morning when he heard on the news that taxpayers had paid for a divorce lawyer and a sex change.
REP. CHARLES DENT: I don't know what you can say about this but it kinda, still, it really irks me. How can somebody pay for a sex change with this. There's got to be some kind of control.
JOHN RYAN: Sir, what happens is when they get these checks they can spend it however they want as long as they cash it.
The GAO's John Ryan says FEMA was disbursing cash no questions asked. Responding to outraged Representatives, the acting deputy FEMA director, Donna Dannels, could only say the bogus payments were but a fraction of FEMA's hurricane response. She added, FEMA is working to improve its verification systems.
DONNA DANNELS: Um, what I would say, and one of the reasons we're not doing debit cards again this year, is that we don't have a program that has enough adequate controls. When we do roll it out, we will block certain purchases so that people simply can't have those things.
Democrats on the committee said fraudulent payments to individuals are only a fraction of FEMA's wasteful spending on contractors. They called for more hearings and investigations.
In Washington, I'm John Dimsdale for Marketplace.