$700 million in Katrina money handed out to homeowners goes missing

Wednesday, April 03, 2013 by: Lance Johnson
Tags: Katrina, money, missing

(NaturalNews) Reports are now in that $700 million taxpayer dollars have gone missing in Louisiana. The money, given to homeowners in the wake of Hurricane Katrina, totaled one billion dollars. Seventy percent of that money has vanished. The new report, released from the inspector general's office, claims that over 24,000 homeowners each pocketed $30,000 of taxpayer bailout money. The money was given out in hopes that homeowners would elevate their homes to prevent future catastrophes.

$700 million may only be part of the fraud

The Louisiana Road Home program allocated $1 billion to this specific relief effort, which was designed to prevent future damage to homes. This program was only one part of a federal government relief package that totaled $29 billion. With that much money being redistributed, more investigation may need to occur. What percent of the other $28 billion has gone to waste?

Indeed, cases of government fraud are piling up from the Gulf Coast region. Federal prosecutors are now pursuing several criminal charges in New Orleans. Once case includes a woman who lied about fixing up her home. She plead guilty to making false statements about how she squandered her cut of government grant money.

A culture expecting government bailouts squanders the value of hard earned taxpayer money

This brings up the question: is handing out money the best way to fix communities torn up in the wake of natural disasters? Are populations of people beginning to expect and even demand federal government bailouts as normal protocol? This norm has been set and the value of the money handed out is easily degraded, destroyed, and squandered by those who don't know how to handle money.

What happened to old fashioned communities banding together in honesty and charity, resurrecting their livelihood without expecting government cash? Why isn't good money handling rewarded and why is irresponsibility enabled?

Are there better ways to reassemble communities and people's lives without taking tax money from one person and giving it away to someone who squanders it elsewhere? Natural disaster bailouts seem to be endorsing thievery and fraud. What lessons can be learned from the loss of $700 million?

As Congress moves to respond to more recent natural disasters like Hurricane Sandy, lessons can be learned. HUD's Montoyo points out, "Clearly, to give money out on the front end right after a disaster, when many of these people lost everything, with a promise to do something down the road, I think is counterproductive to what the program was designed to do."

Montoya says his office will recommend that, for future disaster relief programs, funds are disbursed to individuals only after the project has been completed and inspected by state officials.

Government agencies, designed for good causes, should move in a manner that is productive and not wasteful. For these departments and programs to exist, a special responsibility should be undertaken to ensure that taxpayer money is rewarded to solid, completed, intentional projects. Taxpayer money shouldn't be handed out like parade candy and then consumed like cavity feed.

Louisiana's investigation and push for compliance

Through the failure of this bailout program, the state of Louisiana recognizes that they now must become a police force of sorts, as they venture out, investigate, and track down those who have used the funds for unintended purposes. The state is currently working overtime to recover the money, pushing homeowners to restore their houses. After a year of investigation, the state has thankfully found an honest 5,000 or more people who have fixed their homes. The state is now "Working aggressively with HUD to get the remaining 19,000 homeowners in compliance."

These statements sound strong, but how realistically can they enforce their investigation? Seven-hundred million missing dollars won't be easy to locate. Prosecuting 19,000 homeowners for fraud is a difficult thing to do. Is this the government the United States is asking for? The government is nothing more than a reflection of the people. Where has responsibility gone in the United States?

It can still exist.

Sources for this article include:

http://news.yahoo.com

http://abcnews.go.com

http://m.latintimes.com