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Obama, Coburn Hurricane Katrina Oversight Bill Passes Senate Committee Unanimously

Thursday, September 22, 2005

FOR IMMEDIATE RELEASE
Obama Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green, (312) 886-3506
Date: September 22, 2005

Obama, Coburn Hurricane Katrina Oversight Bill Passes Senate Committee Unanimously
Obama Says Unanimous Committee Passage is First Step to Ensuring Financial Accountability

WASHINGTON - Legislation introduced by U.S. Senator Barack Obama (D-IL) and Tom Coburn, M.D. (R-OK) designed to ensure financial integrity in the Hurricane Katrina relief and reconstruction effort passed the Senate Committee on Homeland Security and Governmental Affairs today by unanimous voice-vote. Unanimous committee passage is a crucial first step in ensuring that the Oversight of Vital Emergency Recovery Spending Enhancement and Enforcement Act (OVERSEE) becomes law.

"Recently, Congress approved $62 billion for Gulf Coast relief and rebuilding efforts - most of which will go directly to FEMA," said Obama. "This is twelve times the amount of money FEMA was given last year - more than it has ever been trusted to spend before. If FEMA's track record during the rescue effort and in years before is any indication of how they will perform during the rebuilding that lies ahead, this should concern every taxpayer and every citizen interested in helping the millions of Americans who have been devastated by Hurricane Katrina."

Previous rebuilding efforts involving FEMA and other government agencies have a history of fraud, corruption, and waste when there is no oversight or accountability in how the funds are spent. Following Hurricane Frances in 2004, FEMA awarded $30 million and approved more than 12,000 claims for residents of Miami-Dade County. The storm, however, made landfall 100 miles north and Miami-Dade never even saw hurricane-force winds.

The Coburn-Obama bill would create a Chief Financial Officer (CFO) to oversee all expenditures associated with the Hurricane Katrina relief and reconstruction effort. The Hurricane Katrina CFO would be appointed by the President, confirmed by the Senate, staffed with experts from relevant federal agencies, and would have management and oversight over any agency using federal funds for the recovery. The CFO would issue monthly financial reports to Congress, and the Government Accountability Office would issue quarterly reports to Congress reviewing the work of the CFO and recovery activities.

"As we look towards the massive Gulf Coast rebuilding efforts ahead, we must demand accountability over how the billions of dollars we've given to FEMA are spent," said Obama. "The CFO will also specifically look at whether federal funds are going to people most in need, whether federal funds are going to companies that hire local workers, and the extent to which the federal government is using no-bid and 'cost-plus' contracts. As you'll recall, these contracts are what caused the whole contracting mess in Iraq."

"Even if the levees hadn't burst and New Orleans didn't flood, Hurricane Katrina would still be the largest natural disaster this country has ever faced, and the rebuilding effort will be certainly be the largest and costliest of its kind. This entrusts FEMA with a massive amount of responsibility, and so it's only right that we protect both taxpayers and citizens on the Gulf Coast with strict accountability and oversight about how the money is being spent and whether it's being most efficiently directed to helping people rebuild their lives. I believe the bill's unanimous passage by the Senate Committee on Homeland Security and Governmental Affairs shows our commitment to financial accountability in these rebuilding efforts, and is an important first step in creating a CFO who will help ensure our tax dollars aren't wasted."

SUMMARY OF COBURN-OBAMA "OVERSEE ACT"

  • A Chief Financial Officer (CFO) would be established and would be responsible for the efficient and effective use of federal funds in all activities relating to the recovery from Hurricane Katrina.
  • Unlike an IG which audits money after it has been spent, the CFO would review expenditures before they are approved. This is a better way to protect against waste, fraud, and abuse.
  • The CFO would be appointed by the President, confirmed by the Senate, and located in the Executive Office of the President.
  • The CFO office would be staffed with experts detailed from relevant federal agencies, would have management and oversight of each federal agency involved in the recovery effort, and would work in conjunction with the inspectors general in each of these agencies.
  • Every month, the CFO would issue financial reports to Congress on the use of federal funds. These reports would include information about the extent to which federal funds have been distributed to persons most in need, the extent to which federal funds have been distributed to companies that hire local workers, and the use of no-bid and "cost-plus" contracts.
  • The Government Accountability Office (GAO) would issue quarterly reports reviewing the activities and expenses approved by the CFO. These reports would examine the accuracy of the CFO's reports and include information on the use of no-bid or "cost-plus" contracts, whether federal funds have been used for their intended purposes, and the extent to which federal funds have helped persons most in need and local workers.