$700 Mil in Hurricane Recovery Funds Gone With the Wind

In yet another example of how the Obama administration blows the nation’s tax dollars, hundreds of millions earmarked for a failed housing program have vanished and the feds aren’t terribly worried about recovering the lost cash.

The missing loot is part of a highly questionable Housing and Urban Development (HUD) program that liberally doled out cash to Louisiana homeowners so they could elevate and protect their houses from storms. The feds came up with this brilliant idea after Hurricane Katrina slammed the region in 2005 because the area, especially New Orleans, got flooded.

Uncle Sam gave Louisiana officials tens of billions of dollars to help residents prepare for future hurricanes and $940.5 million went to a special Road Home Elevation Incentive program that liberally distributed cash to anyone who said they would “elevate” their home. The idea, apparently, was to protect houses from floods though the water level was so high after the storm that no home could have been sufficiently elevated.

Perhaps recipients knew this and figured “why bother?” More than 24,000 homeowners that received up to $30,000 each to elevate their homes pocketed the money instead of making the seemingly useless improvements. That means American taxpayers have been fleeced $700 million, according to an enraging HUD Inspector General report issued this week. No one really knows what happened to the money in fact HUD IG David Montoya admits “your guess is as good as mine.”

What we do know for certain is that the multi-million-dollar home elevation program was a complete failure that did nothing to protect against future hurricanes. This is hardly surprising considering the funds were so easily distributed with virtually no scrutiny. Local residents simply had to promise that they would “elevate and reoccupy” a home and use it as a primary residence within three years. The goal was to assist homeowners with the costs of repairing properties damaged by hurricanes Katrina and Rita.

Here is a brilliant idea from the HUD watchdog that apparently hasn’t occurred to the agency’s officials; try to recover some of the money by enforcing remedies for noncompliance in grant agreements. The state has detailed information on more than 15,000 homeowners who received elevation money that was never used to make the improvements. That translates into $437.3 million, the IG points out.

It’s unlikely this creates any sort of dilemma for a bloated agency like HUD that’s been plagued by mismanagement and a number of scandals—under both Democrat and Republican administrations—over the years. Under Ronald Reagan in the 1980s an influence-peddling scheme led to the conviction of 16 people, including top aides to then HUD Secretary Samuel Pierce.

In the 1990s Bill Clinton’s housing secretary, Henry Cisneros, was embroiled in a major scandal over hush money to a mistress. He eventually pleaded guilty to lying to the FBI about payments to the woman. In the new millennium George W. Bush’s housing secretary, Alphonso Jackson, was ousted and federally investigated for enriching himself and his friends by giving them lucrative government contracts.

More recently HUD has come under fire for wasting taxpayer money on things like a housing discrimination application for mobile devices. The goal, according to HUD, is to provide the public with a quick and easy way to learn about housing rights and to facilitate the process of filing housing discrimination complaints. It also aims to remind the housing industry about its “responsibilities” under the Fair Housing Act, the 1968 law enacted to promote integrated housing—by combatting housing segregation—during the civil rights movement.