Last month I let you know that the Federal Emergency Management Agency gave out far too much money in disaster assistance for Hurricanes Katrina and Rita, mainly because of people defrauding the system. Now FEMA is lowering the boom. It’s sending letters to everyone who got too much money, telling them they now have to pay back the amount of assistance they were overpaid.
“During a disaster, FEMA’s highest priority is helping the people who need it most as quickly as possible,” said acting FEMA director David “Duct Tape” Paulison. “Even as funds are quickly distributed to meet the needs of disaster victims, FEMA takes very seriously our responsibilities to taxpayer dollars, and is careful to make sure funds are distributed appropriately.”
No, it’s more like the Government Accountability Office caught FEMA with their pants down. Completely unprepared for the size and scope of the disaster, and my sources say completely unprepared for the size and scope of even a typical hurricane, FEMA handed out debit cards and checks like candy to anyone who wanted one, with very little verification. Only now is it trying to get the money back.
People who receive one of these letters (PDF) from FEMA will have the ability to appeal FEMA’s decision, but even if they do appeal, they’ll have to pay FEMA immediately to avoid being subject to interest and penalties. If their appeal is successful, then they’ll have the payments they make returned to them.
Those who received a check from the U.S. Treasury can return it uncashed, or people can repay using check, money order, MasterCard or VISA. Anyone who doesn’t appeal and doesn’t pay will have their debts turned over to the Treasury Department for collection, and they will do that by withholding any payment any other part of the federal government might have sent you, such as an income tax refund. And if that’s still not enough, they’ll put a black mark on your credit report, and turn it over to the Department of Justice for prosecution.