by bvernia | September 2nd, 2009
The Legal Times blog has an interview with Greg Bingham of the Kenrich Group, a consulting firm, about lessons learned about government contracting fraud four years after Katrina.
Although I’m not in a position to disagree with Mr. Bingham’s statement that “[f]or emergency-related contracting it wasn’t that bad,” Katrina presents an interesting example of the various factors that can play out in fraud investigations.
First, there is the integrity of the procurement process itself. I was not in New Orleans in the immediate aftermath of Katrina, but I did visit there a few months after the storm, at a time when the city was a shadow of its former self, but was crawling with armed men with dubious credentials and contractors. Based on my conversations with people on the ground then, the contracting process struck me as essentially lacking in normal government oversight. It may be that an emergency calls for some contracting procedures to be loosened, but the Bush Administration seemed to suspend most of the rules in Louisiana and Southern Mississippi. Neither the US nor private relators can use fraud investigations to enforce rules that were not written into emergency contracts.
Second, the publicly-announced investigations arising from Katrina recovery efforts seem to bear fruit primarily in “retail” cases – small-dollar false claims by purported homeowners or residents seeking disaster relief. The Katrina-related investigation sections of OIG-DHS’s semiannual reports to Congress consist largely of such cases. Just this past week, federal indictments were unsealed against 18 people, mostly for this level of crime. I’m all in favor of prosecuting individual violations, but there seems to be a deficit of results higher up the pecking order.
Although I am not in a position to disagree with Greg Bingham’s assessment, I think that there are many lessons to be learned from Katrina about emergency fraud that we’re years away from uncovering.
