FEMA grilled on $4 billion in unspent aid

WASHINGTON -- Lawmakers blasted the heads of the government's Gulf Coast recovery effort Wednesday for delays that have stalled key projects and left billions of dollars in federal aid unspent.

"I'm frankly outraged to hear that there is this much money piled up," said District of Columbia Delegate Eleanor Holmes Norton, head of a House Transportation and Infrastructure subcommittee.

USA TODAY reported this month that more than $3.9 billion of rebuilding aid still has not been spent, leaving thousands of projects across the Gulf Coast incomplete more than three years after the region was devastated by Hurricanes Katrina and Rita in 2005. The aid, part of a massive recovery effort funded by the Federal Emergency Management Agency, was meant to repair or replace public works destroyed by the storms.

Norton and other members of the subcommittee peppered officials with questions about how to speed rebuilding and resolve disputes between federal, state and local leaders that have snarled that work.

"When FEMA fails, everybody loses. The whole country loses," said Rep. Mario Diaz-Balart, R-Fla.

FEMA officials conceded they have faced problems, but defended their approach. Many of the delays are the result of "honest disagreements about what is and what is not eligible" for disaster aid, acting Deputy FEMA Administrator David Garratt said.

Norton drew a link between unspent disaster aid and President Obama's recently enacted $787 billion stimulus plan. "It's unconscionable to allow these projects to wait while at the same time sending new stimulus funds to the states, including Louisiana, while these projects could be putting people to work," she said.

She said Congress might need to order FEMA to find a way to cut the backlog of projects.

Rep. Joseph Cao, R-La., faulted the agency for a "lack of leadership and a lack of transparency" in its efforts, and said employees have told him "the FEMA office has basically lost its focus on rebuilding."

He said his office is investigating "serious problems" within FEMA's New Orleans office, including reports of sexual harassment, discrimination, nepotism and other improprieties by FEMA employees there.