Another (Not) Surprise

AP: Report: Katrina Spending Lacked Controls---

WASHINGTON - The government spent nearly $300 million for a private contractor to hire buses, trucks and planes for hurricane relief efforts — apparently with little control or oversight, according to a Transportation Department memo released Monday.

Landstar Express America Inc. competed successfully for a four-year contract with the Federal Aviation Administration in October 2002 to provide emergency transportation services, Transportation Department spokesman Brian Turmail said. The contract had a limit of $100 million a year.

Congress and the Bush administration have pledged to scrutinize spending on private contractors to make sure they aren't profiteering from efforts to help victims of Hurricane Katrina and rebuild the Gulf Coast.

Transportation Department Assistant Inspector General Theodore Alves, in a preliminary assessment, found that the FAA passed along requests for transportation from the Federal Emergency Management Agency to Landstar that totaled about $289 million, according to the memo.

Alves found that Landstar would estimate the cost of a task, such as trucking in water or generators. The FAA would then approve the estimate without issuing written orders or recording the requests in its accounting system.

"We're doing what FAA tells us to do," said Landstar's chief executive, Henry Gerkens.

Alves found that FAA has paid $72 million to Landstar, a subsidiary of Landstar System Inc. of Jacksonville, Fla.

The FAA has apparently still not put on its books an additional $93 million in billings from Landstar, the memo said.

It would be a safe bet to assume this is happening in other areas of government relief spending, as well.

That's why we shouldn't throw government money at disasters/problems. It ends up being wasted. Thanks.