Storm Hit Little, but Aid Flowed to Inland City

The New York Times

Storm Hit Little, but Aid Flowed to Inland City
By ERIC LIPTON

JACKSON, Miss., Nov. 19 - When the federal government and the nation's largest disaster relief group reached out a helping hand after Hurricane Katrina blew through here, tens of thousands of people grabbed it.

But in giving out $62 million in aid, the Federal Emergency Management Agency and the American Red Cross overlooked a critical fact: the storm was hardly catastrophic here, 160 miles from the coast. The only damage sustained by most of the nearly 30,000 households receiving aid was spoiled food in the freezer.

The fact that at least some relief money has gone to those perceived as greedy, not needy, has set off recriminations in this poor, historic capital where the payments of up to $2,358 set off spending sprees on jewelry, guns and electronics.

Though a majority of the money appears to have been given out legally, the United States attorney's office is investigating at least 1,000 reports of fraud, including accusations that people lied about claims of damage or where they lived. State and local officials are criticizing FEMA and the Red Cross as doling out money without safeguards, but they also blame their fellow citizens.

"The donors all across this nation thought they were giving money to put food in the mouths of people who had nothing and clothes on the backs of people who had lost everything," said State Representative John R. Reeves, who represents Jackson. "But that is not what happened here. There was a feeding frenzy. Free money was being handed out."

And friends have turned against friends. When word of the Red Cross and federal money got out in Jackson's neighborhoods, many rushed to apply. Huge lines formed at Western Union outlets, discount stores and other places that issued or cashed the relief checks. Erica Thompson, 32, tried unsuccessfully to persuade her friends not to join in.

"People can take a good thing and abuse it," Ms. Thompson said while doing her wash at a coin laundry in Jackson this week. "It's not right."

Some of those who accepted the aid, though, feel no embarrassment. "I needed that money," said Lynn Alexander, 30, whose apartment lost power in the storm, but was not damaged. She collected $900, she said, from the Red Cross. "It helped me put gas in my car, wash my clothes and buy food."

What happened in Jackson and its suburbs - in Hinds, Madison and Rankin Counties - might not be unique. Emergency officials elsewhere in Mississippi and in parts of Louisiana have also questioned how so much federal aid could have been authorized, given the limited damage they documented.

"Someone is going to have to look at that," said Bo Boudreaux, deputy director of homeland security in Iberia Parish, west of New Orleans, where perhaps three mobile homes were damaged, he said, but 404 families, according to FEMA, received $2,000 checks in emergency aid.

FEMA, which is leading the $62 billion Hurricane Katrina relief effort, has been criticized as responding slowly to the disaster and then wasting recovery money. In defending the payments in the Jackson area, the agency and the Red Cross cited the tensions between moving quickly to help the desperate, and moving carefully to avoid aiding the undeserving.

"This is the challenge we perpetually face," said Nicol Andrews, a FEMA spokeswoman. "Do you get assistance into the hands of those who desperately need it as quickly as possible? Or do you slow it down to dot every single I and cross every single T? We chose to err on the side of the victim."

Charles D. Connor, a senior vice president at the Red Cross in Washington, said his group had a similar imperative. People who brought in a form of identification were eligible for aid. Mr. Connor acknowledges that apparently resulted in aid being offered to some who did not need it.

"We did the best we could to help people as quickly as we could knowing that mistakes would be made along the way," he said Friday.

Donald Paxton, executive director of the Central Mississippi Chapter of the Red Cross added: "Unless you drove down every street in Hinds County, there was no way of immediately determining actually what the damage was."

FEMA and the Red Cross have made disaster assistance payments in the past that have drawn criticism. After Hurricane Frances in Florida last year, FEMA distributed $31 million to residents in the Miami-Dade area despite minimal damage.

Senator Susan M. Collins, a Maine Republican whose committee oversees FEMA and the Department of Homeland Security, said in an interview Thursday that the agency had apparently failed to correct problems auditors found in Florida.

"It is frustrating to me that FEMA seems incapable of paying legitimate claims quickly and effectively and yet reimburses fraudulent claims without asking any questions," Ms. Collins said. "It is the worst of all worlds."

Open for Aid

After Hurricane Katrina devastated coastal communities on Aug. 29, it moved steadily inland toward Jackson. Smack in the middle of Mississippi, the capital city has been in slow decline for more than a decade, struggling with high crime, long-simmering racial tensions and poverty.

By the time the hurricane reached this far, its power had diminished. The sustained winds, recorded at 47 m.p.h. at the airport, were far below hurricane speed. But gusts of up to 74 m.p.h. took down trees, knocking out power lines and damaging roofs. Almost all of Jackson lost power. Electricity returned for most customers in a few days. But in some cases, it took up to two weeks.

Still, the region was largely spared. In Jackson and two nearby counties, only 50 to 60 homes were declared uninhabitable, local emergency departments said. About 4,000 sustained damage, they said.

Immediately after Hurricane Katrina made landfall, the Bush administration declared a disaster area along 15 Mississippi coastal counties, as well as 31 parishes in Louisiana. Residents there were eligible for federal emergency grants, housing assistance and money for repairs, medical bills and other costs.

But by Sept. 7, at Mississippi's request, the disaster zone was expanded as far as 220 miles inland, reaching 32 counties, including several that never experienced sustained hurricane-force winds. The zone eventually reached 47 counties. The disaster area in Mississippi - which is led by a Gov. Haley Barbour, a Republican ally of President Bush's - extends 200 miles farther north than that in Louisiana, which is led by Gov. Kathleen Babineaux Blanco, a Democrat who at times criticized the federal storm response.

Lea Stokes, a spokeswoman for the Mississippi Emergency Management Agency, said it was the course of the storm, not politics, that dictated the map. The state urged the Bush administration to include so many counties in the disaster zone after documenting widespread damage. The state encouraged all residents to apply for aid, even if the only cost they incurred was the purchase of a chainsaw or generator.

"Let them tell you whether or not you qualify before you rule yourself out," she said, echoing the advice offered by Mississippi officials.

Ms. Andrews, the FEMA spokeswoman, said the federal government typically deferred to states on disaster declarations. But when that happens, she acknowledged, the door is opened for federal aid.

"Once we effectively turn on a county, anyone in that county can apply," Ms. Andrews said.

A Rush for Checks

Even before Hurricane Katrina landed, the Central Mississippi Chapter of the American Red Cross began preparing. The charity opened a shelter at the Coliseum and Trade Mart in Jackson for evacuees from the coast. Soon after, the Red Cross also began offering cash grants ranging from $360 for a single adult to $1,565 for a family of five.

Ms. Alexander, who is unemployed, remembers phone calls from her cousin, then from her therapist. The Red Cross, she was told, was giving out money to Jackson residents.

Ms. Alexander drove to the Trade Mart, but chose not to wait for her turn because the crowd was so large. Back home, she called the charity's toll-free telephone number dozens of times before finally getting approval for $900 in aid. She had to give her name and address, she said. The only storm damage at her apartment was spoiled food in the fridge. "I was blessed," she said.

Michael Hendrick had also gone to the Trade Mart, broke, homeless and hungry after fleeing the Louisiana coast. He listened as Jackson-area residents plotted the best way to get the biggest grants. "It was really kind of turning my stomach," Mr. Hendrick said.

Before the rush subsided, the Red Cross gave $32 million to area residents, including about 25,400 of the 92,000 households in Hinds County, home to Jackson, according to statistics first published in The Clarion Ledger and confirmed by Mr. Paxton of the local Red Cross chapter.

FEMA received 42,313 applications from Hinds County and 17,352 claims from Madison or Rankin Counties. To date, 16,407 of those applications have been approved, resulting in a payout of $20.3 million in disaster grants, as well as $9 million in rental assistance and other aid, agency records show. Most of the federal money was intended for people whose homes were uninhabitable, but it was distributed before any home inspections were conducted.

The relief checks soon created a crush of customers at local businesses. A clerk at Quik Cash, a check-cashing store, said a line of more than 100 customers stretched down the hallway, out the door and around the corner. So many people showed up that the business ran out of cash.

Lee Montgomery, the manager of Terry Road Pawn Shop in Jackson, said many of those cashing relief checks at his business immediately bought jewelry, firearms, DVD movies and electronics.

Bob Parks, owner of a Hinds County pharmacy and Western Union agency, said he watched in disbelief as hundreds of Jackson-area residents arrived at his store to get relief checks. "Surely the Red Cross has to have a better use of funds," Mr. Parks said. "Unless they just have money that they are trying to get rid of for some reason."

Unexpected Numbers

Local government officials were baffled by the payouts. Weeks after the storm, Larry J. Fisher, director of the Hinds County emergency department, got a call from a regional FEMA representative saying that staff members wanted to know why county officials had reported that so few homes were uninhabitable.

FEMA has sent aid to thousands of county residents who claimed their homes were ruined, including 7,622 checks for $2,000 in emergency financial assistance. But Mr. Fisher counted only about 50 uninhabitable homes and perhaps 4,000 with any damage at all.

To resolve the discrepancy, Mr. Fisher recalled, he was told: "You are going to increase your number." A Baptist deacon and a former city police detective, Mr. Fisher, 67, was going to have none of that. Backed up by digital photographs he had taken of damaged properties, he refused to revise his reports. "I am not going to change my figures up to yours," Mr. Fisher said he told the FEMA official. "You want to start investigating, by all means, do so." When asked about the conversation, FEMA officials said they were not aware of it.

Officials in Mississippi fault both the Red Cross and FEMA for not having clearer - and tougher - standards about what kind of damage merited a claim. In the end, it appeared that simply being a resident when the storm passed through was enough to collect a check.

"The Red Cross is thought of as the premier charity," said Representative Reeves of Jackson. "In my judgment, they dropped the ball."

Mr. Parks, a longtime Red Cross donor, said he would never donate to the charity again.

Mr. Paxton said he realized that there was some abuse, but he could not say for sure just how much took place. If the charity failed to act responsibly, he said, it will move to correct the problems.

Marshand K. Crisler, president of the Jackson City Council, said many aid applicants perhaps honestly believed they deserved help, even if it was simply to replace spoiled food. But clearly there was abuse as well.

"People are taking advantage of a crisis," Mr. Crisler said. "We are saddened that people would stoop to such a level."