Katrina Fraud Likely to Balloon Past $1B [View All]

[deminks]

http://biz.yahoo.com/ap/061225/katrina_contracts.html?.v=1

WASHINGTON (AP) -- Already at $1 billion, the tally for Hurricane Katrina waste will balloon next year as investigators shift their attention from fraudulent aid to the lucrative government contracts awarded with little competition.

Several of the contracts were hastily given to politically connected firms in the aftermath of the 2005 storm and were extended without warning months later. Critics say the arrangements promote waste and unfairly hurt small companies.

In January, federal investigators will release the first of several audits examining abuse in more than $12 billion in Katrina contracts. The charges range from political favoritism to limited opportunities for small and minority-owned firms, which initially got only 1.5 percent of the total work.

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"It's a combination of laziness, ineptitude and it may well be nefarious," Ervin said.

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Merry Christmas to the Gulf Coast from Santy "W" Claws.